For New Yorkers earning more than $150,000 a year, the new year will bring a major tax reprieve: the expiration of a temporary surcharge on the state’s top income brackets.

State lawmakers imposed the tax hike in 2003 in an attempt to close a $12 billion budget shortfall that developed after the terrorist attacks of September 11, 2001. The law enacting the hikes, which increased taxes on both the state and city levels, provided for the surcharge to “sunset” at the end of 2005. Despite calls by some city Democrats to extend the surcharge, state lawmakers allowed the law to expire as scheduled.

A spokesman for the state Senate majority leader, Joseph Bruno, said lawmakers in Albany had no intention of prolonging the surcharge.

“We kept the commitment, and there was never any consideration for extending any portion of it,” the spokesman, Mark Hansen, said.

The 2003 bill created a new top tier income bracket for New Yorkers earning more than $500,000 a year, instituting a tax rate of 7.7%. Those taxpayers had previously paid a rate of 6.85% for earning more than $150,000 annually. The surcharge also applied to New Yorkers making between $150,000 and $500,000.Their rate increased to about 7.38% and has decreased each year since, culminating in a return to the 6.85% rate on Sunday.

Lawmakers in 2003 also raised city taxes for earners in the top brackets, to 4.45% for New Yorkers making more than $500,000. The Independent Budget Office estimates that about 28,000 city taxpayers will earn more than $500,000 this year.

In all, the tax reduction will save state residents nearly $1 billion, according to the majority leader’s office.

The added income tax became an issue in this year’s race for mayor, as Democratic candidates proposed extending it to pay for programs or other tax cuts. And the City Council in June passed a resolution supporting the extension of the higher taxes to fund smaller class sizes in schools.

The chairman of the council’s Finance Committee, David Weprin, said that although an extension had broad support in the chamber, he supported the expiration of the surcharge.

“If legislators say that a tax is temporary, then they should keep to their word and keep it temporary,” Mr. Weprin said. Although the tax surcharges expire on Sunday, there’s a chance they could return retroactively when state lawmakers craft next year’s budget this spring, a senior fellow at the Manhattan Institute, E.J. McMahon, said.

“We’re not safe yet,” Mr. McMahon said. “Unfortunately, there is ample precedent for extending surcharges retroactively months after their expiration.”

Mr. McMahon released a report yesterday that concludes the city could also benefit from a reduction in property taxes, which increased during the fiscal crisis of 2002. The study, relying on a new economic computing model, found that a rollback of the 18.5% property tax rate could result in a net gain of nearly 16,000 jobs. The study concluded that large federal tax cuts have produced more jobs, but that the total boost could have been greater if local income and property levies were not increased at nearly the same time.