AUBURN - Money was the main topic of discussion when the two candidates for the 54th state Senate District seat met Tuesday for a debate.

Incumbent Michael Nozzolio and challenger Paloma Capanna focused mostly on taxes and the economy during an election forum hosted at Cayuga Community College. It was the first televised debate in which both Capanna and Nozzolio have participated.

The candidates sparred cordially throughout, with Capanna suggesting she can bring needed change to the state Legislature by replacing the eight-term senator, and Nozzolio saying he offers experience as the state faces tough economic times.

On property taxes, Nozzolio said he supported Gov. Paterson's proposal of a 4-percent cap on raising tax levies as opposed to a “circuit breaker” system that would limit a homeowners' tax burden. He criticized Senate and Assembly Democrats who voted against the tax cap.

“We were faced with the possibility to have property tax reform,” Nozzolio said.

Capanna said she would have supported the same proposal had she been in the Senate, but she also said such a move would only be a “short-term” fix.

The longer term solution would be to establish a progressive income tax within the state to fund education, she said.

Sixty-five percent of the state's public education comes from property taxes, Capanna said, and much of that money goes to unfunded mandates.

A progressive income tax would take that burden off of local property taxes, she said.

“(The current system) is not an efficient approach,” she said.

Nozzolio then told Capanna that her plan amounts to a tax hike, which he opposes. But according to Capanna, only the top 1 percent of state residents - those making more than $150,000 - would see their taxes go up.

Responding to a question about possible areas to cut spending in the state budget, Capanna also suggested a statewide, universal health insurance policy. People are already paying for health insurance through their workplace, Capanna said and a single program would consolidate 24 state health plans that already exist.

“One (program) would immediately save money,” Capanna said.

But Nozzolio countered by claiming that such a plan would require a $7 billion tax hike.

“If 20 percent of the state income comes from a sector,” Nozzolio said, referring to the state residents who he said will pay for a tax hike, “raising taxes on that sector just will put an extra economic burden on everyone else.”

Capanna noted that the majority of people in New York are making around $40,000 a year.

“Government exists for the majority,” she said.

Continuing with taxes, both candidates agreed on the need to collect sales tax on transactions between American Indian-owned businesses and non-American-Indian consumers.

However, Capanna warned against hasty action and suggested negotiating with the parties involved.

“There is always time,” she said.

Nozzolio called for immediate action.

“Native Americans have dug their heels in. Now is the time to force the issue,” he said.

The debate did drift away from money on a couple of occasions, most notably when Capanna's personal voting record was brought up. A Nozzolio supporter pushed the topic into the public eye when she sent a letter to local media outlets claiming public records show that Capanna did not vote from 1997 to 2002.

Nozzolio went on the offensive, calling the revelation “shocking” and questioning his opponent's commitment to public service.

“This is your record. Your record is dismal,” he said.

But Capanna claimed she recalls casting ballots during that time, and plans to talk with commissioners from the Monroe County Board of Elections in coming days about the “mischaracterization.”

Capanna - a family law attorney - did point out at least one year she did not vote when she was in the midst of an intense trial in Wayne County on Election Day.

She also shot back at Nozzolio, noting this has suddenly become an issue so close to Election Day.

“(Sen. Nozzolio) is trying to divert from the real issues,” Capanna said.

Staff writer Christopher Caskey can be reached at 253-5311 ext. 282 or christopher.caskey@lee.net.