NEW YORK- More local governments across New York are planning to override the state’s property tax cap, a sign that rising costs and slower revenue growth are putting pressure on municipal budgets, according to a new report from State Comptroller Tom DiNapoli.
The report found that nearly half of the state’s cities, 45 percent, reported plans to override the tax cap for the fiscal year ending in 2026. That is a sharp increase from 13.1 percent in 2022.
Counties, towns, villages, and fire districts have also reported more planned overrides. Nearly one-quarter of counties said they planned to exceed the cap in 2026, compared with 3.5 percent in 2022. Among villages, 35.5 percent reported plans to override, while 28.6 percent of towns did so.
Fire districts also continue to face financial pressure. About 31.5 percent reported plans to override the cap for 2026, up from 18.6 percent in 2022.
School districts, which face a more stringent process requiring voter approval, have seen a smaller but notable increase. The percentage reporting plans to override rose from 2.4 percent in 2024 to 4.9 percent in 2026. School districts must receive at least 60 percent voter approval to override the cap.
New York’s tax cap generally limits annual property tax increases to the lesser of 2 percent or the inflation rate, although exceptions apply. Local governments can override the cap with approval from at least 60 percent of their governing boards.
DiNapoli said the increase in planned overrides reflects growing fiscal challenges as pandemic-era federal aid has declined, sales tax growth has slowed and inflation has exceeded the 2 percent cap.
“Many local governments are under fiscal pressure,” DiNapoli said, urging officials to be transparent with residents about their financial challenges and budget plans.
A planned override does not necessarily mean a government will ultimately exceed the tax cap. Local officials can change course and adopt a budget that remains within the cap.
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