Lower taxes and better schools for Bronx and city residents were on the mayor's agenda Wednesday during his State of the City speech.

Mayor Michael Bloomberg (R-NYC) proposed giving back $1 billion in tax cuts to residents. He'll accomplish this by cutting the property tax by 5 percent, or $750 million, for one year. Additionally, the mayor wants the state Legislature to continue a $400 rebate program. Bloomberg is also seeking the elimination of city sales tax on all clothing and shoes, regardless of the price.

The mayor said the tax cuts were earned by New Yorkers who endured the city's 18.5 percent property tax hike in the wake of the 9/11 attacks. Officials also say the city's deficit, once estimated at $3.8 billion, has dramatically shrunk. This reduction helped spur the tax cuts.

Bloomberg called for academically stronger schools. The mayor plans to start reforming city schools this year by dismantling regional offices, which were started to oversee struggling facilities. Bloomberg said principals would then have more control over the fate of their students. Reforming school funding was another important issue. The mayor plans to overhaul the "political" way in which funding is appropriated to public schools, causing what he called funding gaps of up to $1 million between comparable institutions.

Click here to view Mayor Bloomberg's complete State of the City address