As expected, Governor Paterson has sent the state Legislature yet another version of his proposal to cap local property taxes.

Replicating the language he submitted as part of the 2010-11 Executive Budget, the governor’s latest program bill also hews closely to his original 2008 proposal to cap school district tax levies, which in turn was based on the recommendations of the Suozzi Commission.   (More background on the cap issue can be found here.)

Tax levy growth under the governor’s bill would be limited to 4 percent a year or 1.2 times inflation, whichever is less.  Exceptions would be allowed only for property taxes on new construction and for capital expenditures previously approved by voters.   Otherwise, school boards could not override the levy cap without the approval of district voters, with the required approval percentage ranging up to 60 percent in cases where state aid to the district is projected to increase by 5 percent or more.  District voters could also petition for a referendum on whether “underride” the cap in any given year–setting a lower limit than the law would require.

Paterson’s bill also resurrects a provision to extend the property tax cap to all local governments, including special-purpose districts, outside New York City.  Unlike school districts, however, the cap on local government and special district taxes could be overridden without voter approval, via a two-thirds vote by their governing bodies.

The property tax cap apparently is destined for a vote in the Senate, where an earlier version passed in August 2008.  However, it is not expected to see action in the Assembly.

Attorney General Andrew Cuomo, the Democratic candidate for governor, is calling for a 2 percent annual cap on property tax levies by all school districts and local governments, allowing override by voters only.    Former U.S. Rep. Rick Lazio, who has the official Republican Party endorsement in the governor’s race, has endorsed a 2.5 percent annual cap on property tax levy growth.  Carl Paladino, challenging Lazio in the GOP primary,  has called for tax cuts without specifically advocating a property tax cap.