ALBANY — State Senate Democrats are aiming to deal Madison Square Garden chief James Dolan — who has stirred controversy with his use of facial recognition technology to bar perceived enemies from his world-famous arena — a big blow in the state budget due April 1.

A budget resolution expected to pass this week will include a proposal to strip the Garden of its 40-year-old property tax exemption while sending the roughly $42 million in expected annual revenues to the MTA, according to a source familiar with the matter.

“Millions of businesses across the state of New York pay property taxes and Madison Square Garden doesn’t. What’s wrong with this picture?” state Sen. Brad Hoylman-Sigal (D-Manhattan) said.

The non-binding proposal could become law if Assembly Democrats and Gov. Kathy Hochul get on board with the idea despite past campaign cash from Dolan, who has invited Speaker Carl Heastie (D-Bronx) and the governor to drop the puck at MSG in the past while fighting criticism on other fronts.

Dolan has attracted growing criticism from elected officials like Hoylman-Sigal and powerful state Senate Finance Chair Liz Krueger (D-Manhattan) after the billionaire baron in late 2022 deployed facial recognition software against his perceived legal foes — including attorneys who merely worked for firms involved in litigation against him.

This includes a mother who got ejected from a Rockettes performance at Radio City Musical Hall months ago while trying to see the show with her daughter’s Girl Scout friends.

Hoylman — whose district includes Madison Square Garden — has proposed legislation to remove the tax abatement while unsuccessfully pushing the NBA and NHL to sanction Dolan, who owns the Knicks and Rangers, over his use of facial recognition.

The “dystopian” Dolan tech is also drawing increasing heat from the State Liquor Authority, which is moving to end booze sales at the Garden despite his past threat to unleash alcohol-deprived Blueshirts fans to slam the agency with complaints after stopping sales himself.

The New York Democrats’ move against Dolan resembles a bill signed into law last month by Florida Gov. Ron DeSantis that stripped Disney of its special tax status.

The theme park, which formerly fell inside a special tax district known as Reedy Creek Improvement District, will now lie under state control as part of the “Central Florida Tourism Oversight District.”

DeSantis, 44, appointed the five-member oversight board to check the entertainment company’s movement toward “woke” initiatives.

“Today the corporate kingdom finally comes to an end,” he said at the bill-signing ceremony. “There’s a new sheriff in town, and accountability will be the order of the day.”

The Florida governor first wrangled with Disney in 2022 after the entertainment conglomerate opposed the state legislature’s Parental Rights in Education bill, which prohibited classroom discussion of sexual orientation and gender identity for kids in kindergarten through third grade.

At the time, Disney claimed the so-called “Don’t Say Gay” bill was hostile to the LGBTQ community.

The Republican governor first floated the elimination of six special districts in Florida, including the Reedy Creek district, following the fight.

In New York, state Attorney General Letitia James, meanwhile, is demanding docs from the company to show that its use of facial recognition technology does not violate New Yorkers’ civil rights.

And some public officials also say the City Council should not renew Madison Square Garden’s expiring permit to host more than 2,500 spectators if Dolan keeps the facial tech policy in place.

But the embattled Democratic donor has hardly backed down in his multiple-front fight against public officials despite the growing pressure.

“If you owned a bakery or a restaurant and someone comes in and buys bread and the next day they serve you a lawsuit, they say they hated it. Then the next day they say, ‘I’d like to buy more bread.’ Would you sell them more bread?” the mercurial mogul has previously said while defending his use of facial recognition software.

“If you’re being sued, it’s a personal thing,” he added.

An MSG spokesperson fired back at Hoylman and the budget proposal Tuesday while noting that other sports venues get tax breaks or subsidies along with other special interests like the film industry, which state Senate Democrats have supported in the past.

“It’s interesting that Senator Hoylman is rallying to end governmental subsidies for corporations when just last year he voted in favor of legislation that extends a $420 million governmental subsidy for the film industry and currently sponsors legislation to create new subsidies for the musical and theatrical production industry,” the spokesperson said.

“Madison Square Garden is a significant job creator and an economic leader within both our community and the city.”

News of the budget proposal was first reported by the Daily News, but it had not yet been formally proposed as of midday Tuesday.

A Hochul rep sidestepped the question about whether the governor would ever support removing MSG’s tax break.

“Governor Hochul’s Executive Budget makes transformative investments to make New York more affordable, more livable and safer, and she looks forward to working with the legislature on a final budget that meets the needs of all New Yorkers,” the spokesperson.

Heastie — who has boycotted the New York Post for weeks following criticism by its Editorial Board — did not provide immediate comment.

One government watchdog welcomed news of the state Senate budget proposal while questioning its prospects in the give-and-take of upcoming negotiations among Hochul, Heastie and state Senate Majority Leader Andrea Stewart-Cousins (D-Yonkers).

“Hopefully the Legislature will pull the MSG tax break,” said John Kaehny, executive director of Reinvent Albany. “We’ll believe it when we see it.”

Additional reporting by Josh Christenson