The Associated Press

PHOENIX € Republican legislative leaders have agreed on the basics of a state budget that calls for $200 million in property tax cuts and spending nearly $170 million more on education, the Senate majority leader said yesterday.

The $4.8 billion budget being discussed for the year beginning July 1 would represent a 4.4 percent increase over spending for the current year, said Sen. Tom Patterson, R-Phoenix.

Most of the increase would go to education, Patterson said.

About three-fourths of all new spending, or $184 million, is now earmarked for education, he said.

The tentative budget includes approximately $150 million in new funding for elementary and secondary schools, plus a $21.2 million increase for the university system and $8.9 million for community colleges.

Leaders hope to have all the details in place before the end of the week, and the Legislature will consider the new budget in a special session that could begin as early as this week, Patterson said. The school funding issues will be dealt with at the same time, he said.

Details of the school funding proposal still are being discussed, but it is likely to include $30 million to help equalize capital funding and $20 million to begin the switch to ''current year'' funding for schools. Currently, schools receive state aid payments based on their enrollments the year before.

Sen. Carol Springer, R-Prescott, said there also will be some discussion of increasing what are known as ''group B weights,'' which fund special education programs.

''There are a lot of people who support the 'group B weights,' so those discussions will be part of the current year funding discussions,'' she said.

Patterson acknowledged the $20 million would not be enough to convert to full current year funding. But he said the idea is to phase in the conversion over a couple of years.

The budget will earmark $200 million for a property tax cut, although the exact form of the cut has not been determined, Patterson said. It may involve some form of Springer's proposed 30 percent reduction in the vehicle license tax but will not include any of several income-tax cuts that have been discussed in the Senate, Patterson said.

''We're staying the course on our commitment to the House last year that this will be a property tax cut. The (vehicle license tax) falls within that and if that's what the members vote for, that's what it will be.''

But the $200 million income tax cosponsored by Sens. John Kaites, R-Phoenix, and Chris Cummiskey, D-Phoenix, ''was never on the table,'' Patterson said. And he said the same goes for a flat tax proposed by Sen. Larry Chesley, R-Gilbert.

Chesley's bill € which would have established a single tax rate for all income levels € was approved by the Senate Finance Committee despite criticism that it actually would mean a tax increase for more than 90 percent of Arizona's taxpayers.

In addition to the tax cut, Patterson said the budget would include money to begin construction of 1,875 new prison beds and 200 juvenile prison beds.