ALBANY The New York State Senate approved legislation Friday urged by Gov. David Paterson that would place a cap on the annual growth of school property taxes at four percent or 120 percent of the Consumer Price Index (CPI), whichever is less. In addition, the Senate approved a comprehensive plan to help school districts control spending growth by severely limiting the imposition of unfunded state mandates, providing relief from increasing pension costs and creating new incentives for greater collaboration between school districts to improve efficiency. Both measures require approval of the state Assembly before they are enacted. Little said she was hopeful that could happen. My hope is that what we are doing today will lay the groundwork for a productive legislative session when both houses return to the State Capitol later this month, she said. Our state faces two critical problems. High property taxes are driving families and businesses away and the states current fiscal crisis limits our ability to provide immediate relief. Controlling spending on the state and local level has to come first. She said that local school districts shouldnt shoulder the cutbacks on their own, and that the mandate relief component was critically important. I will continue to fight to ensure our local schools receive the funding they need to provide a strong education for our children, she said. Little said the governors bill approved by the Senate would allow voters to approve a tax levy that exceeds the cap if 55 percent of district voters approve. That percentage would increase to 60 percent if the district received a state aid increase of over five percent. Voters would also have an option to adopt a stricter tax cap, called an underride proposal. School districts that propose a tax increase below the maximum allowable level could bank the extra taxing authority up to 1.5 percent for future year tax increases. The only exclusion to the cap calculation would be costs associated with school construction. Under the Senates omnibus savings plan, the state would take over increased school district pension costs above four percent, similar to the Medicaid reform enacted several years ago which has saved counties hundreds of millions of dollars. Rising pension costs are a major contributor to increased school budgets, she said. The Senate proposal also would prevent the Legislature from imposing an unfunded mandate on localities or school districts which costs an individual municipality or school district $10,000 or more, or in the aggregate, over $1 million statewide. Agency regulations with a fiscal impact adopted after school budgets are voted would be delayed until the school year for which the next school budget is approved. The plan would require the State Education Commissioner to reduce the paperwork burden on school districts and BOCES. The Senate plan also would increase financial incentives for school districts to consolidate by making permanent an operating aid incentive for those districts that combine and provide added financial incentives for districts that share services. Additional state aid will support a requirement that all schools undergo an energy audit over a three-year period. The cost of any recommendations implemented would be reimbursed 65 percent by the state.