New legislation proposed by state lawmakers would temporarily eliminate a sales tax exemption on clothing, expand hours for video lottery machines and require online travel companies to collect sales taxes on hotel rooms — measures that the lawmakers said were needed to finalize a state budget.

The legislation, which Democratic leaders in the State Senate and Assembly drafted late Saturday after negotiations with Gov. David A. Paterson broke down again on Friday, will also subject the earnings of hedge fund managers who work in New York State but live elsewhere to the state’s income tax. The bill would also cap or delay an array of business tax breaks and shorten the period after which the state can seize abandoned property. Legislative officials estimated that this would raise $200 million.

But Mr. Paterson and the Legislature remained at odds on Sunday over whether the lawmakers’ measures would actually provide enough money to cover hundreds of millions of dollars in extra spending they are seeking. The legislators estimated that their proposals, taken together, would leave a gap of no more than $100 million or $200 million — a minor difference, they said, in a total budget that could now top out at $136 billion.

“The difference between us and him is $200 million,” said Sheldon Silver, the Assembly speaker, “$200 million over what will be a $135- or $136-billion budget, which I suggest to you is less than a tenth of 1 percent.”

Administration officials, however, said they believed the discrepancy was closer to $400 million — an amount certain to grow, because a federal Medicaid grant projected to be $1 billion is to be cut by at least several hundred million dollars and probably more.

The new revenue bill, which cannot be voted on until 12:01 a.m. Tuesday, includes elements of a competing bill introduced by Mr. Paterson on Sunday, like suspending the sales tax exemption on clothing and reducing the deductibility of charitable contributions made by the very wealthy. But it departs from his version in several significant areas, like the governor’s proposal to allow grocery stores to sell wine.

“The bills we introduced allow us to continue negotiations, move forward with gap-closing action and keep government working,” said John L. Sampson, the Senate Democratic leader.

Starting on Monday, lawmakers will be asked to choose between two sets of bills. One is the emergency budget bill submitted by Mr. Paterson on Sunday, which also includes annual budget appropriations for education, and which, under the law, cannot be amended. The other is the budget bill drawn up by Mr. Sampson and Mr. Silver, which includes even more money for education but leaves out some of the governor’s proposals to pay for it all. Lawmakers sent a clear message to the governor on Sunday night by refusing to accept the emergency budget bill.

By introducing their own bill, Mr. Sampson and Mr. Silver have stripped Mr. Paterson of the leverage he had by using emergency bills to pass regular budget appropriations; if lawmakers pass their own appropriations bills, there is no real threat of a government shutdown. If those bills pass, Mr. Paterson could, in turn, use his line-item veto to cut any spending authorized by the Legislature that exceeds the amounts laid out in his executive budget from January.

Speaking to reporters on Friday, Mr. Paterson said that unless the Legislature enacted a contingency plan for the loss of the Medicaid money, he would use those powers to veto all of the lawmakers’ additional spending on education, as well as thousands of legislative earmark grants, known a member items.

“The Legislature is not listening to the signals from Washington,” Mr. Paterson said. “It’s as if they just stick their heads in the sand and ignore it.”

By design, the Legislature’s alternative legislation also omits two major proposals that Mr. Paterson included in his emergency bill: allowing the state’s public universities to set their own tuition rates and placing a flat cap on local property taxes. Both faced fierce resistance from some Democratic lawmakers, who complained that Mr. Paterson was trying to shoehorn his policy priorities into the budget process.

Mr. Paterson called lawmakers into an extraordinary session on Sunday evening to consider the higher education and tax cap bills separately. The rules that govern such sessions do not require lawmakers to vote on the matters put before them by the governor, however, and both the Senate and Assembly met for only a few minutes before adjourning without a vote on the governor’s proposals. The Assembly also adjourned.

Despite their criticism that Mr. Paterson was manipulating the budget process, the Legislature’s new revenue bill came bundled with some decidedly nonbudget-related measures. The most controversial would require New York’s prison inmates, most of whom are from Democratic-leaning New York City but are incarcerated in prisons in Republican-leaning districts upstate, to be counted as residents of their original homes.

That measure, which is likely to draw criticism from Republicans, would help Democrats in drawing more advantageous state legislative districts after the 2010 census is completed.

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