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Cuomo Backs Plan to Ease Array of Tax Burdens and Faces a Fight

Gov. Andrew M. Cuomo, center, appeared Tuesday at the State University of New York College at Old Westbury to discuss recommendations from his tax-cutting commission, led by former State Comptroller H. Carl McCall, left, and former Gov. George E. Pataki.Credit...Michael Nagle for The New York Times

Gov. Andrew M. Cuomo on Tuesday embraced a package of proposals to reduce the effects of property, estate and business taxes, setting the stage for a battle over revenue collection that is expected to dominate the New York State legislative session that begins next month.

Mr. Cuomo, a Democrat, has said that cutting taxes will be his top priority next year — when he and all state lawmakers will be up for re-election — and his comments on Tuesday were an early preview of how he might seek to accomplish that.

But the contours of a debate also immediately emerged, with questions about the proposals from some of the governor’s allies. A leading business official who has championed Mr. Cuomo’s agenda questioned whether the new plan was fair to New York City taxpayers; labor unions said provisions unfairly favored the rich; and the powerful speaker of the State Assembly said the government’s priority should be providing money for public education.

Mr. Cuomo has tried to grapple with the state’s high-tax burden several times since he took office in 2011; that year, he persuaded the Legislature to limit annual increases in property taxes, and then called lawmakers back to Albany to cut taxes for middle-class earners while creating a new tax bracket for high-income earners. Earlier this year, he won approval of a $350 family tax rebate; the first checks will be sent to homeowners shortly before the fall 2014 election.

Mr. Cuomo on Tuesday traveled to Old Westbury, in highly taxed Nassau County, to unveil and praise a set of tax-cutting recommendations from a panel led by former Gov. George E. Pataki, a Republican, and former State Comptroller H. Carl McCall, a Democrat.

“People are still struggling,” Mr. Cuomo told reporters, “and to the extent we can cut taxes and help them and their households, that’s exactly what government should be doing.”

The most striking of the recommendations are two meant to mitigate the effect of high property taxes.

The commission suggested a so-called property tax circuit-breaker — a tax credit for households in which property taxes exceed a certain portion of family income. The proposal drew praise from liberals, who said it would provide help to households that needed it most, but drew criticism from business groups, which said it amounted to shifting the tax burden, not reducing it.

More unusual was a proposal for the state to create a program that would effectively wipe out any increases in local property taxes for two years for homeowners outside of New York City. The state would provide a tax rebate equal to the amount by which the individual homeowner’s tax bill increased.

Only homeowners in localities that stay under the state’s annual cap on property tax increases would be eligible for the rebate. It would not apply to New York City homeowners, because the tax cap does not apply to the city.

The commission proposed raising the exemption from the state’s estate tax to $5.25 million, from $1 million, and lowering the estate tax rate. Several other proposals would cut taxes paid by businesses; one would trim the corporate income tax, and another would change the way banks are taxed.

While legislative leaders and business groups offered praise for some of the commission’s proposals, many recommendations are controversial, and legislators, whose approval is needed for tax law changes, are divided. The panel said its proposals would cost $2 billion annually, including $1 billion that would go to property tax relief for homeowners.

Mr. Cuomo’s aides said by limiting spending in next year’s budget, the state would have a surplus that could be used for tax cuts.

State Senator Dean G. Skelos of Long Island, the leader of the Senate Republicans, who have advocated tax cuts, said, “The plan must go further.” Republicans control the Senate in coalition with a small group of breakaway Democrats.

But the Assembly speaker, Sheldon Silver, a Manhattan Democrat, suggested a reluctance to set tax-cutting as a priority, saying it was “important that we have the resources necessary to fund vital programs,” like public schools. And, hinting at concern about whether the tax package would be unfair to New York City, he said that any package “should be premised on a principle of fairness to all New Yorkers — city residents, suburbanites and rural residents alike.”

Kathryn S. Wylde, a past supporter of the governor’s agenda who is the president of the Partnership for New York City, a leading business group, also questioned whether the city would get its “fair share.”

“New York City is the primary source of surplus state revenues,” Ms. Wylde said, “but New York City residents do not directly benefit from the commission’s proposed use of $1 billion of this surplus for property tax reductions for suburban and upstate New Yorkers.”

The commission’s estate tax recommendation, which would raise New York’s estate tax exemption to match the federal exemption, also immediately drew opposition, as well as praise.

Dean Norton, the president of the New York Farm Bureau, welcomed the proposal, which he said would serve to “preserve a lot of our farms in the future as we pass them on to the next generation.”

“It doesn’t take very long for a farmer on Long Island to get to the million dollars,” he said of the current threshold, “and then they have to sell off parcels in order to pay the estate tax.”

But labor unions and liberal advocacy groups were upset.

Ron Deutsch, the executive director of New Yorkers for Fiscal Fairness, a liberal advocacy group, said, “We can ill afford tax giveaways to the Wall Street banks and the wealthiest families in this state when so many are struggling.” He added, “So few have so much in our state — and so many have so little — that you can’t possibly justify these recommendations.”

Mario Cilento, the president of the New York State A.F.L.-C.I.O., described the commission as a “missed opportunity,” saying its recommendations were “out of touch” and favored corporations and wealthy individuals.

Mr. Cuomo appointed the Pataki-McCall commission in October. It was his second panel set up to review taxes in New York; the other, led by the investment banker Peter J. Solomon and Mr. McCall, was formed to recommend ways to simplify the state’s tax code and make it fairer.

The Solomon-McCall commission, which released its report last month, suggested modernizing the sales tax, in part by taxing digital products like e-books and Netflix subscriptions. The commission also questioned the effectiveness of the state’s business tax incentives, including one for film and television production that Mr. Cuomo has promoted.

A version of this article appears in print on  , Section A, Page 23 of the New York edition with the headline: Cuomo Backs Plan to Ease Array of Tax Burdens and Faces a Fight. Order Reprints | Today’s Paper | Subscribe

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