Tax cap is up to 2% for school districts

The tax cap limits the annual property tax levy increases to the lesser of the rate of inflation or 2%. The office of State Comptroller Thomas P. DiNapoli calculated the inflation factor at 4.7% for school districts and municipalities whose fiscal year ends June 30, 2023. Last year's cap was 1.23%.

The tax cap first applied to local governments and school districts in 2012, and became known as the 2% cap, although each district and municipality's cap could be smaller or larger than 2% because of exclusions and other factors in the formula that calculates their caps. 

“School district and municipal officials must remain fiscally cautious to stay under the cap as they prepare their budgets,” DiNapoli said in a statement. “Even with significant funding from the state and federal governments, school and local communities are faced with the rapid increase in inflation, pandemic surge and trying to retain and recruit employees.”

The 2% levy limit affects the tax cap calculations for 676 school districts and 10 cities with fiscal years starting July 1, 2022, including the “Big Four” cities of Buffalo, Rochester, Syracuse and Yonkers.