State lawmakers agreed last night to provide about $50 million in tax relief, along with a tax credit to help people cover property damage from the 2004 Manoa flood and the devastating storms that drenched the Islands this year.

House and Senate negotiators, beating a midnight deadline to have bills prepared for final votes next week, agreed to expand income tax brackets by 20 percent so some people would pay lower tax rates. Most of the savings would be aimed at single taxpayers who earn $10,000 a year or less or couples who earn $30,000 or less and would cost the state about $40 million a year.

Lawmakers also agreed to raise the standard income tax deduction to 40 percent of the federal level, which would help more than half of all taxpayers and would cost the state $10.8 million in lost revenue.

The tax credit for victims of the Manoa flood and recent storms would be for either 10 percent or up to $10,000 of damage not covered by insurance or other government assistance. The tax credit would cost the state about $9.5 million.

Gov. Linda Lingle said earlier this week that lawmakers should use $120 million of the state's budget surplus for tax cuts, a concession that her previous call for nearly $300 million in tax relief was unlikely to get approved.

State Sen. Brian Taniguchi, D-10th (Manoa, McCully), chairman of the Senate Ways and Means Committee, said the surplus gives lawmakers the chance to offer tax relief after years of budget constraints. "It's a start for us," he said. "And as long as the economy stays strong it's going to be kind of hard not to take a look at it again next year."

House and Senate Republicans said Democrats had a unique opening to use a surplus that has grown to over $600 million to give more money back to the people.

"At this point, we'll take what we can get," said House Minority Leader Lynn Finnegan, R-32nd ('Aliamanu, Airport, Mapunapuna). "But I'm disappointed it's such a low amount."

State Rep. Mark Moses, R-40th (Makakilo, Kapolei, Royal Kunia), said any tax relief would be helpful. "It's better than nothing," he said.

Several other bills moved out of conference committee earlier yesterday and will be up for final votes next week before the session adjourns.

Some of those bills would: