Inflation for the third year in a row will result in allowing local governments across New York to raise their property tax levies by the maximum amount of 2%, state Comptroller Tom DiNapoli's office on Thursday announced. 

The development affects all counties, towns and fire districts in New York, in addition to 44 cities and 13 villages. 

New York's property tax cap limits levy growth at either 2% or the rate of inflation, whichever is lower. The tax cap has been in effect since 2012 and the last decade was largely defined by largely flat growth in consumer prices. But the last several years has seen a steady increase in inflation, giving more leeway to local governments in the amount of money they can raise in taxes. 

There are exceptions to levy growth, and the cap can be overriden at the local government and school district level. New Yorkers typically pay among the highest property taxes in the country. 

Inflation has declined in the last month, according to statistics released this week. At the same time, DiNapoli's office pointed to higher costs also facing governments as a result of increased prices. 

"Allowable tax levy growth will be limited to 2% for a third consecutive year," DiNapoli said. “Although the rate of inflation has begun to decrease, it still poses a challenge for local governments and their budgets. As local governments spend down their one-time federal pandemic assistance, officials will need to carefully develop and balance their budgets for the coming year.”