A new report from the New York State Comptroller's Office shows that more local governments have reported that they plan to override the state's property tax cap in recent years. Comptroller Thomas DiNapoli adds that more school districts, which require a ballot proposition and at least 60% voter approval to override the tax cap, have also reported plans to override the cap. DiNapoli says pandemic relief aid, as well as a surge in sales tax revenue, contributed to a drop in the share of reported override plans, most notably in 2022. But in recent years as pandemic-related federal aid has dwindled, sales tax growth has moderated, and inflation has risen above the 2% cap, the number of municipalities reporting plans to override the tax cap has grown substantially.
Cities led the increase, with 49.2% reporting that they planned to override for the local fiscal year ending (FYE) in 2025 and 45% indicating they would override for FYE 2026, up from 13.1% in 2022. Over one-fifth of New York's counties also reported that they planned to override the tax cap for FYE 2025, and nearly one-fourth reported planning overrides for FYE 2026, up from 3.5% in 2022. Towns and villages have also experienced notable increases in planned overrides in recent years. For FYE 2026, 35.5% of villages and 28.6% of towns said they were planning to override the cap, up from 22.7% and 16.6%, respectively, in 2022.
Fire districts also appear to be experiencing fiscal pressure. The share of fire districts planning overrides reached 34.9% for FYE 2025 before declining slightly to 31.5% for FYE 2026, up from 18.6% in 2022. A smaller share of school districts have reported plans to override the cap than other local governments. However, their share has more than doubled in recent years, increasing from 2.4% to 4.9% from FYE 2024 to FYE 2026.
DiNapoli says while a planned override suggests that local officials may be concerned about a potential budget shortfall, it does not necessarily mean that they will exceed the cap for that year.
