ALBANY, N.Y. -- A budget reduction agreement has been reached. The governor and legislators have agreed to a total of $1 billion in cuts over the next two years. Lawmakers tell us the budget reduction plan will cut $500 million this year and another $500 million next fiscal year.

Included are $50 million in cuts to member items, $51 million in CUNY cuts, $80 million in aid to localities, geared mainly toward new programs. There will be a $40 million cut to the State Wireless Network and $141 million in targeted Medicaid cuts. There will also be six percent cut across the board cut in state agency spending.

Lawmakers we spoke to said the day turned out much better than expected.

Lawmakers did not cut general aid to local governments, nor did they cut other facets of health care as drastically as expected.

The Senate will reconvene this morning to vote on the budget reduction plan. The Assembly wrapped things up Tuesday night.

As expected the Assembly and Senate remain divided on property tax relief.

The Assembly passed its "circuit breaker" proposal where homeowners pay property taxes based on income.

Last week the Senate agreed with Governor Paterson and passed his property tax cap proposal which would limit how much school districts could spend in a given year.