Two recent developments, seemingly unrelated, are in fact parts of a larger picture. In the Wantagh School District, the budget for 2008-09 was rejected by the voters twice - first in May, and then again the following month. The resulting budget cuts hit athletics and other extracurricular activities, and parents are now working very hard to raise approximately $650,000 - the amount cut from the budget when the district shifted to an "austerity" financial plan.

The second is the formation of the New York Property Tax Cap Coalition. This umbrella organization is made up of educators, business leaders and other taxpayers around the state who are supporting Gov. David Paterson's proposal to cap school tax increases at 4 percent per year. This group is opposed by those who fear that a tax cap could leave local school districts without the necessary funds for their academic and other programs.

What's the connection between these two developments? A bill introduced in Albany by Senator Serphin Maltese (R-Elmhurst) and Assembly member. Dov Hikind (D-Brooklyn). Their Educational Tax Incentives Act has attracted bipartisan support from legislators from almost every region of the state.

This legislative proposal would offer taxpayers a partial tax credit for donations to public education entities - that is, to school districts, individual public schools or local education foundations. The tax credit is offered to individual taxpayers and to businesses, including all businesses paying New York's corporate franchise tax, all limited liability corporations or partnerships, and S corporations.

A smaller credit would be offered to businesses and individual taxpayers who donate to private scholarship foundations.

The New York State Department of Taxation and Finance has projected that $140 million would be claimed as credits for support of education in the overlapping period between the start of the next tax year on Jan. 1 and the end of the current fiscal year, March 31, 2009, and $395 million in subsequent fiscal years. Those partial credits translate into an estimated $200 million that would be donated in early 2009. Estimated donations of as much as $600 million have been projected for subsequent fiscal years.

By late last month, parents in Wantagh had already raised more than $334,000. But they would have a much easier time reaching their goal of $650,000 if donors could claim a tax credit for a substantial portion of their contributions. While such donations are currently tax deductible, tax credits are available to all taxpayers, even if they don't itemize their deductions. And credits reduce the total amount actually owed to the state, rather than simply reducing taxable income.

At least one statewide poll has indicated a 74 percent approval rate for the governor's property tax cap. Last week, a bipartisan majority in the New York State Senate passed the tax cap bill, although it is not expected to be passed by the Assembly during next week's special session of the Legislature. Gov. Paterson and the Property Tax Cap Coalition could find new allies around the state if public-school supporters knew that non-tax-generated funds could be raised in the form of donations not affected by the proposed cap.

The Maltese-Hikind bill could work well with a property tax cap, protecting homeowners from higher property tax increases while helping to fund athletic and other extracurricular activities that otherwise might be cut, as they were in Wantagh.

At the same time, this bill could help keep the nonpublic educational sector healthy, allowing those schools that find themselves in financial difficulty due to the combination of declining enrollments and increased costs to keep their doors open. All New Yorkers need to remember that nonpublic schools educate approximately 15 percent of all the state's students in Grades K to 12, and save taxpayers several billion dollars each year. The vitality of this sector is critical to our state's economic health and well-being.

Though lawmakers might not take up the Educational Tax Incentives Act when they reconvene to attack the state budget next week, the bill is expected to receive a favorable vote in the Senate during another special legislative session before the end of the year. Gov. Paterson and Assembly Speaker Sheldon Silver (D-Manhattan) need to embrace this proposal, too, even if for different reasons. The governor wants his tax cap, and the speaker wants to make sure enough money is available for public education. This bill is a win-win proposal for both sides, not to mention families all across the Empire State.