ALBANY – Negotiations between Governor Pataki and legislative leaders over tuition tax credits are hinging on one specific word: tuition.

While Mr. Pataki has insisted that the state adopt a plan to offer tax credits of up to $500 to parents of schoolchildren to help defray the cost of private school tuition or tutoring, lawmakers in both chambers have come out with proposals for smaller tax credits that would not target the tax breaks for education.

While both sides have yet to reach a compromise on the issue, Senate Republicans are looking for a plan that would placate the governor without outraging the teachers unions, which are strongly opposed to tuition tax credits. The key to such a plan is the wording, or more specifically, the omission of the word “tuition.”

Responding for the first time to the tax credit proposals by the Assembly and the Senate, Mr. Pataki in a statement yesterday said lawmakers were “letting down” taxpayers, parents, and children by not supporting an “educational tax credit that will actually encourage parents to invest in their children’s education.”

“The big elephant in the room seems to be that word, ‘tuition,’ ” said Martin Golden, a Republican senator from Brooklyn and one of the strongest supporters of tuition tax credits in the Senate. “That’s the no-starter for the union and the Assembly.”

The two major teachers unions, the United Federation of Teachers and New York State United Teachers, fear that any tax credit plan targeted at private school tuition would open the door to similar programs, like tuition vouchers, and would reduce funding for the public school system. The state teachers union has fought aggressively against the governor’s plan, spending hundreds of thousands of dollars in television and newspaper ads attacking tuition tax credits and threatening to withhold contributions from lawmakers who back the governor’s plan.

School choice proponents – including Jewish, Catholic, Latino and African-American communities – fear that a broadly focused tax credit program that does not target tuition, like the ones the Assembly and the Senate have proposed, would not have any impact on the quality of education in the state. It’s expected that only a tiny fraction of the money would go to paying for private school tuition if the state does not stipulate any specific usage.

Facing pressure from the governor, the Senate is considering backing a more targeted tax credit plan than the one it originally proposed, one that would require that parents use the tax reductions on “educational expenses.”

It’s unclear whether the approved expenses under such a compromise plan would be spelled out in any way, but the wording would exclude tuition as one of the expenses or would specify that the credits may not be used for tuition. Instead, the credits would be applied to other educational expenses, like tutoring, textbooks, and fees.

At least one other state, Minnesota, has adopted an education tax credit program that prohibits the credits from being used to pay for private school tuition.The state offers taxpayers instead tax deductions for tuition expenses.