Homeowners on Long Island and upstate will get a property tax rebate check this year if they live in a municipality and school district that abides by the state’s two-percent property tax cap, Governor Andrew Cuomo said Saturday.

An agreed-upon budget would devote $1.5 billion to this “freeze” program, which was modified in several ways from Cuomo’s original proposal.

Homeowners’ checks will not be tied to actual spending decreases in future years, as the Democratic governor had originally proposed, but counties and educational BOCES would be required to develop and submit a plan for reducing their spending by three percent through consolidation of services.

These plans could include past actions that have saved money, Cuomo said. There is no set window for the look-back, but Cuomo-appointed budget director Bob Megna—who would determine what was acceptable—would only allow for “reasonable” proposals, the governor said.

Renters as well as co-op and condo owners in New York City would receive a rent rebate based on their income—known as a “circuit breaker.”

Checks could arrive later this year—an election year—if a school district outside New York City hews to a two-percent cap on property tax growth. State leaders are already sending middle-class families a $350 check this autumnif they have a child between 2 and 18 years old.

“The homeowners would get the [new] credit in year two if their local governments have provided an efficiency plan that demonstrates savings of at least 1 percent per year for the following three years, and that plan is approved by the division of the budget,” Cuomo explained on a conference call with reporters. “I do believe that will create a pressure on the local governments to find efficiencies. And that was the issue: local governments didn’t want that pressure.”

Cuomo has argued that the proliferation of local governments was responsible for the increase in costs, but localities counter that it is state-mandated programming—like Medicaid and early childhood special education—that drives up their spending. E.J. McMahon, president of the fiscally-conservative Empire Center, called the move a “dubious election-year gimmick to support a false narrative.” Ron Deutsch, who leads the labor-backed New Yorkers for Fiscal Fairness, said the plan would exacerbate inequality because wealthy homeowners in wealthy areas would get more relief and be better able to meet the demands of the cap.

Officials, rounded up by advocates on both sides, offered different reactions.

“New York has gone from a government divided and defined by gridlock to one in which all sides work together with a focus on efficiency and effectiveness,” said Albany County Executive Dan McCoy, who appeared with Cuomo earlier this month to push for the freeze plan.

The county’s independently elected comptroller, Mike Conners, disagreed: “The tax freeze proposal is an election ploy that ignores the relationship of unfunded state mandated spending on local governments. They mandate we pay for their mandated services and then hamstring how we’ll pay for them. The hypocrisy is staggering, even for the Capitol.”

Cuomo made a slew of proposals to other taxes, some of which were modified. The governor’s proposal to merge New York’s dedicated bank tax into the corporate tax wasaccepted, as was an attached proposal to lower the overall rate from 7.1 percent to 6.5 percent. The maneuver won Cuomo praise from business groups like the Partnership for New York City, but consternation from labor-backed groups who see it as a giveaway to Wall Street. Bronx Sen. Jeff Klein, leader of the Independent Democratic Conference, hadpromised to beat back the changes.

A plan to roll back New York’s estate tax was modified from what Cuomo proposed, keeping the tax rate at 16 percent but increasing the amount that is exempted from $1 million to an eventual $5.25 million. That number will rise automatically, and will lag a bit behind the federal exemption threshold. The change was made after a push by Assembly Democrats.

The adopted budget would also expand a manufacturing tax credit that was originally targeted to upstate areas statewide. The change was made after a push by Republicans in the state Senate, many of whom come from Long Island.

© 2014 Capital New York