A report from state Comptroller Tom DiNapoli’s office found more local governments are seeking to override the state’s cap on property tax hikes.

State lawmakers approved the cap in 2011, and analysis from the Rockefeller Institute of Government found the cap has kept property taxes much lower than they could have been.

But now, local governments say they’re feeling the squeeze from rising costs and state mandates.

There are exemptions, but the law generally limits levy increases to 2% in a year or to the rate of inflation, whichever is less. Each local government uses a formula developed by the state to determine how much they are allowed to increase the amount they raise through taxes.

Local governments must report to the comptroller’s office if they intend to seek a tax cap override, but that doesn’t mean leaders will go through with it.

An individual property owner’s taxes could also increase by more than 2% even with the cap depending on calculations under the state formula, according to Tompkins County government.

Municipalities and fire districts can override the cap with a 60% vote by a governing board. School districts must put the question to voters.

The comptroller’s office found the end of pandemic-era federal funding may also be driving the change.

“Really since the pandemic has kind of gone away, we’ve seen a pretty sharp increase in the number of entities planning to override the tax cap, which you know is probably an indication that there’s some mounting fiscal pressure that they’re experiencing,” said Ed Burgess, a director in the office’s division of local government and school accountabilities.

The analysis used self-reported data from the 2025 fiscal year. The Comptroller’s Office found cities were the most likely to plan to override the tax cap, followed by villages, towns and counties.

The trend continued in the 2026 fiscal year as local government groups reported other kinds of pressures.

For counties, it’s state mandates that they administer programs like the Supplemental Nutritional Assistance Program (SNAP) and Medicaid.

Federal cost-shifts mean counties will take on more of the financial burden even as they work to keep taxes and spending under control, according to Stephen Acquario, executive director of the New York State Association of Counties.

“We’re seeing the loss, a dramatic loss of federal Medicaid money that was providing nearly $1 billion to the New York counties for the past 15 years, we’ve been getting that money,” Acquario said. “That’s gone, so the direct impact to county governments is severe. It’s acute.”

Twelve counties exceeded the property tax cap in fiscal year 2026, the most since the cap was first put in place in 2011.

The counties include Cayuga, Cortland, Fulton, Hamilton, Livingston, Ontario, Otsego, Schoharie, Seneca, Warren, Washington and Yates, which is exceeding the cap for the first time.

“We’re seeing initially rural New York being affected by this: less of a tax base, same mandated services,” Acquario said.

NYSAC is hoping for structural reforms from state legislators that could help ease the counties’ burden.

Meanwhile, the New York Association of Towns is also hoping for changes. They would like to see adjustments to the Aid and Incentives to Municipalities (AIM) program formula, which hasn’t been changed in years.

“NYAOT believes that towns are in a better position to thrive and be more affordable when they diversify their sources of revenue beyond just property taxes. Specifically, towns need consistent access to shared sales tax revenue and restored growth in AIM, so they aren’t relying solely on property taxes to absorb rising health insurance costs, un/underfunded state mandates, and the expiration of federal pandemic aid,” the association wrote in a response to the comptroller’s office report.

For its part, the comptroller’s office advises local governments to perform sound budgetary practices and for citizens to stay informed about their local government’s operations.

“It’s a community decision, and we urge local officials to be transparent with the public, communicate with the public about the challenges that they’re facing in their communities and the decisions they’re having to make when it comes to their budgets,” Burgess said.