ALBANY—Governor Andrew Cuomo is proposing a new tax credit that would give money to individuals whose property taxes exceed 6 percent of their income, he announced Wednesday.

Cuomo and his aides said the program would cost roughly $1.66 billion a year, and would be open to homeowners who reported income of $250,000 or less. The credit would be capped at $2,000, and would be meted out on a sliding scale based on income.

A state official said the taxes from any school or municipal district whose proposed budget feel within the state’s tax cap would be combined and measured against income. The credit will be phase in over the next four years, the official said, and would be paid for using future surpluses, which the state’s budget division projects will be $2 billion by 2016.

That estimate, though, is based on what critics say is a dubious assumption that the state will hold its overall spending growth to two percent. Cuomo has so-far adhered to that self-imposed cap, but the major budget drivers—spending on education and health care—are each projected to increase by four percent a year.

To make the surpluses real, then, officials would have to cut an unspecified $7.7 billion from other program areas. The Cuomo administration will unveil its 2015-16 budget proposal on Jan. 21.

Bob Megna, the head of Cuomo’s budget division, said there would be a parallel credit for renters, capped at $750 “downstate” and $500 in “upstate” areas. It would work in the same way, based on the portion of rent—which the state sets at 13.75 percent, based on various studies—attributed to property taxes.

Megna and the governor, a Democrat beginning his second term, said the benefits would be focused in downstate suburbs on Long Island and Westchester County that have the highest absolute property tax rates in the state.

In a press release, officials estimated 1.3 million homeowners would see an average credit of $956, and Megna said “over a million renters” would see an average benefit of $400.

Cuomo said the new proposal, which he will unveil in his budget presentation next week, was the latest step in his efforts to provide property tax relief for homeowners.

In 2011, the state imposed a 2 percent cap on increases by municipalities and school districts; residents would only be eligible for the new credit, Megna said, if they lived in a municipality whose proposed budget fell underneath the cap. It’s unclear how this will be judged, given the layers of government—town or city, county, school district—that exist in New York.

In 2014 Cuomo and legislators passed a “freeze” program that provided election year checks to homeowners whose municipalities stayed within the tax cap, essentially giving them a cash rebate for any increase. On Long Island, some homeowners are still waiting.

“You can’t just keep going to the taxpayer like a piggy bank,” Cuomo said during an event at Long Island’s Hofstra University. “We’re going from a cap to a freeze to an actual tax cut.”

Reaction to the proposal was mixed. Democratic legislators rushed to note that they havelong championed similar “circuit-breaker” proposals. Unions and ideological liberals have long turned to these plans because state money is primarily derived from income taxes—which are progressive, in that higher-income earners pay at higher rates—as opposed to property taxes, which are regressive because they remain the same regardless of income.

Ron Deutsch, executive director of the labor-backed New Yorkers for Fiscal Fairness, called Cuomo’s proposal a “step in the right direction.”

Fiscal conservatives including E.J. McMahon, head of the Empire Center, an Albany-based think tank, said the proposal was simply a “subsidy, not a solution” to high property tax rates and offers an “illusion of cost control without actually reducing costs.”

The proposal is different than previous Cuomo tax proposals, which have been reviled by the left and praised by the right. This year, Cuomo is hoping to renew or make permanent his property tax cap; it’s possible that the new credit program could sweeten that maneuver for recalcitrant Democrats.

A spokeswoman for Assembly Speaker Sheldon Silver, whose Democrats dominate that chamber, said in a statement that he supports “tax relief that is fair and equitable for all New Yorkers.” In a statement, Senate Republican Leader Dean Skelos said he “look[ed] forward to discussing the specifics” of Cuomo’s proposal, but that “it is essential that any enacted property tax relief plan ensures all middle-income families in every region of the state receive property tax relief.”

© 2015 Capital New York