Comptroller Thomas P. DiNapoli announced that property tax levy growth for school districts and 10 cities statewide — including those on Long Island — will again be capped at 2 percent, marking the fifth consecutive year the limit has remained in place.
The continued cap comes as everyday costs have climbed sharply. The cost of living on Long Island has increased an estimated 24 to 26 percent over the past five years, according to data from the U.S. Bureau of Labor Statistics, using the New York metro region as the standard measure for Long Island.
“The Comptroller’s office does recognize the cost of providing services and the challenges facing school districts and local governments and encourages local officials to take advantage of various training events and OSC resources, such as local government management guides, to assist them with a wide variety of accounting and management topics,” said Rebecca Dangoor, DiNapoli, DiNapoli’s deputy press secretary, said about maintaining the 2 percent cap.
The tax cap, first imposed in 2012 on school districts and local governments outside New York City, limits annual property tax levy increases to the lesser of 2 percent or the rate of inflation, with limited exceptions. While the law allows districts and municipalities to override the cap, DiNapoli’s office calculated the inflation factor at 2.63 percent for governments with a June 30, 2027, fiscal year end, meaning the 2 percent cap will apply.
“For the fifth consecutive year, the property tax levy for school districts and 10 cities will be capped at 2 percent,” DiNapoli said. “School district and municipal officials must continue to find ways to deliver services efficiently as they deal with higher costs and the potential impact of federal actions.”
The cap applies to a district’s total annual property tax levy, not to individual budget lines. It generally covers taxes that fund core operations, including salaries, supplies, utilities and contracts; dependent special districts such as water, sewer and fire districts; voter-approved public libraries; and most general debt service.
“For the past five years, State policy has steadily expanded the gap between what school districts are permitted to raise locally and what economic conditions demand,” Brian Phillips, assistant superintendent for business and operations at the West Hempstead school district, wrote to the Herald in an email. “Inflation has increased 24 percent in that time, yet school districts have been limited to a 10 percent increase.”
“Despite this, the West Hempstead School District must still deliver mandated services, including transportation for West Hempstead residents and special education services, both of which increase by much more than 2 percent annually,” he continued. “The district has responsibly and aggressively used its reserve funds to bridge the fiscal gap, but these reserves are finite. Without revenue rules that reflect real inflation, the district faces ongoing challenges in maintaining the highquality education expected by its students and community.”
The law includes narrow exclusions from the cap calculation, including portions of employer pension contribution increases above two percentage points for the Employees’ Retirement System and Police and Fire Retirement System; court-ordered judgments from tort actions that exceed 5 percent of the prior year’s levy; the local share of voter-approved capital expenditures and related debt service; and adjustments for tax base growth from new construction and physical property improvements.
While individual spending categories are not capped at 2 percent, governing bodies must manage overall spending and revenues to keep the total levy within the limit unless voters or elected officials approve an override.
School districts are currently assembling their proposed budgets, which voters will be asked to approve or reject during school budget votes and board of education elections on May 19 across New York state.
The 2 percent allowable levy growth affects tax cap calculations for 675 school districts and 10 cities statewide, including those on Long Island, with fiscal years beginning July 1.
