A new report published by a major business group in New York claims that a property tax-cutting program favored by Senate Republicans in Albany has failed to stop the growth in local levies and may have contributed to the rapid rise in school taxes in recent years. The report by the Business Council of New York State, which used data supplied by the state comptroller’s office, says property taxes increased by an average of 7.1% between 2000 and 2005 — more than double the rate of inflation.

The increase occurred even while Albany spent billions of dollars on a program called School Tax Relief, or STAR, which originated during the Pataki administration and has grown over the years to become one of the most expensive items in the budget.

The most passionate advocates of STAR have been the Senate Republicans, who are demanding that Governor Spitzer further increase the size of the program.

New York now spends about $5 billion a year on STAR. The bulk of the program exists as property tax exemptions for homeowners outside New York City. The state pays for the exemptions through subsidies to local school districts. About a quarter of the program consists of rebate checks that the state sends directly to homeowners.

Initially a proponent of the program, Mr. Spitzer has begun questioning its effectiveness and expressing support for imposing a cap on school taxes, an alternative favored by the Business Council but sharply opposed by labor unions.

Last month, the governor formed a commission, led by Nassau County Executive Thomas Suozzi, to study the idea of a cap.

The report by the council said STAR has “provided cover for a sharp increase in the rate of spending growth (and tax levies) by school districts.”

Between 1998 and 2005, school tax levies outside the city grew by 54%, the report said. Taxes also increased at a faster pace than the STAR subsidies, so that even when the savings from the state are taken into account, tax bills increased by 24% over the period.

Senate Republicans, who have responded coolly to Mr. Spitzer’s push for a cap on local school taxes, said they have no intention of dropping the STAR program from their agenda.

“New York taxpayers are desperate for additional relief from skyrocketing property taxes and only the Senate has advanced a plan that would expand the STAR property tax rebate program,” a spokesman for the conference, Mark Hansen, said in a statement.