ALBANY -- A special commission recommended Monday that New York state cap the growth of property taxes at 4 percent a year, among other fiscal reforms.

The commission was established by former Gov. Eliot Spitzer to address the difficult political issue of rising property taxes. His successor Gov. David Paterson's support for a cap has already pitted him against the powerful statewide teachers' union.

If Paterson and state legislators act on the recommendations from state Commission on Property Tax Relief, local school taxes could be capped at either 4 percent or 120 percent of inflation, whichever is less. That would be about half of the annual average growth of most recent years.

Getting a property tax cap passed will be a challenge for Paterson. The Democrat-led Assembly has opposed it in favor of a "circuit breaker" in the past, and Senate Republicans — who supported a tax cap — won't be in power in January when the Legislature returns.

A school district could exceed the cap if 55 percent of voters agree. But if the district received more than a 5 percent increase in state aid, 60 percent of voters would have to agree to override the cap.

Once a cap on property tax is in place, the commission recommended additional relief for lower-income homeowners through a "circuit breaker" that would base school taxes on income, rather than homes' market value.

The commission recommended redirecting at least $2 billion from the current STAR program for property tax relief to a circuit breaker.

The commission also urged politicians to reform laws and mandates that drive up government spending, and avoid introducing new legislative or regulatory mandates that aren't funded.

School districts should also rein in the costs of salaries, pensions and health care, along with general operating and capital expenses, according to the report.

Paterson received the final report at a press conference at the Capitol.