ALBANY – With an eye toward the White House, Governor Pataki is expected to use his 12th and final State of the State address to cast himself as a fiscal conservative who curbed taxes and crime and sought to fix a broken system of government.

This will be an easier argument to make in today’s speech after the announcement of a surplus of at least $2 billion for the current fiscal year, largely due to soaring Wall Street profits and revenue from real estate taxes. The surplus could increase hundreds of millions of dollars in coming months. The amount is about twice what the governor predicted it to be less than three months ago. A year ago, he projected a $4 billion deficit.

Moments after the surplus was announced yesterday, Republican and Democratic leaders pounced on the money, offering competing plans for what to do with it.

The Assembly speaker, Sheldon Silver, a Democrat of Manhattan, said yesterday that he wants the state to devote the surplus toward complying with the increases in funding to New York City public schools that were ordered by a judge in the Campaign for Fiscal Equity lawsuit, which the governor is appealing.

The judge in the case ordered the state to send an additional $1.41 billion in operating funds, and $1.84 billion in capital funds, to city schools by the end of the current fiscal year and a total of more than $23 billion by 2010. Mr. Silver said the surplus could help pay for the first installment of the bill. He said he would be opposed to using the money to fund tax cuts.

Foreshadowing a budget battle, the Senate majority leader, Joseph Bruno, a Republican, signaled that the surplus ought to be used to help reduce property taxes through almost $2 billion of direct rebate checks. A spokesman for Mr. Bruno, John McArdle, criticized Mr. Silver’s surplus plan, calling the amount of money that courts have ordered the state to give to city schools “not realistic.”

“It will be a slug-fest in terms of how it gets spent,” Blair Horner, legislative director for the New York Public Interest Research Group in Albany, said of the surplus.

Mr. Pataki told the Associated Press that he and lawmakers ought to “be very cautious and make sure we don’t just go out and spend it. We have to look at ’07 and ’08 and beyond and look at the long-term needs of the people of the state.”

Mr. Pataki, the first confirmed lame duck New York governor to deliver a state of the state speech in more than five decades, is likely to devote less of his speech than usual to introducing a laundry list of new initiatives and setting out long-range goals and more to defining his legacy. The governor usually fills in the specifics of his plans in his budget presentation later in the month.

In fact, an early draft of Mr. Pataki’s speech links him to one of the most famous examples of presidential oratory.

“When JFK urged us to consider what we as Americans could contribute to our nation rather than what we could expect from it, that resonated with me as I’m sure it did with many of you,” the draft of the text says.

Political observers predict that shaping his remarks before the full Legislature will be a goal of trying to appeal to Republican voters beyond New York, a task that could pull him to the right. Today’s speech is one Mr. Pataki’s final opportunities to shape impressions of his record in office before he steps down at the end of the year.

“I wouldn’t be surprised if he sounds more conservative in light of his presidential ambitions,” a senior fellow at the Center for Civic Innovation at the Manhattan Institute, E.J. McMahon, said.

Mr. Pataki is also likely to mention an agreement he reached with Mr. Silver and Mr. Bruno to add three areas – Manhattan’s Chinatown, and Nassau and Livingston counties – to the roster of the so-called Empire Zones, which are given tax breaks to create more jobs. Mr. Silver, who represents Chinatown in Lower Manhattan, bemoaned the state of the area’s garment industry and said Chinatown was one of the neighborhoods hardest hit by the September 11, 2001, attacks.

In previous state of the state speeches, Mr. Pataki set the tone for the coming legislative term. His 2003 speech, in which he signaled a fiscal belt tightening, augured the budget clashes with lawmakers that led lawmakers to override 120 of his vetoes. His speech is likely to last well over an hour and will be followed by a reply by Mr. Silver.

Some of his older pronouncements have faded from political memory. Early in his tenure in 1995, Mr. Pataki, a three-term governor, called for term limits for statewide officials. In 1996, he said, “We can, we must, and we will design a health care system that ensures that our people continue to receive the highest quality health care, and at lower cost.” Today, New York spends more on Medicaid expenses than California and Texas combined.