School districts will be limited to a 1.23% hike in the property tax levy this year as education officials around the state could be facing a scramble for raising revenue amid an historic downturn in the economy amid the COVID-19 pandemic. 

Comptroller Tom DiNapoli announced Wednesday the cap would decline from 1.81% a year ago. 

“School district and municipal officials must remain fiscally cautious to stay under the cap as they prepare their budgets,” DiNapoli said. “The financial impact of the COVID-19 pandemic, combined with a levy growth rate of 1.23 percent and below 2 percent for the second year in a row, means they must examine their budgets more closely to control expenses.”

The limit on property tax increases will affect 676 school districts and 10 cities, including the Big Four districts of Buffalo, Rochester, Syracuse and Yonkers. 

Schools are already facing struggles this year during the pandemic as many districts have turned to remote instruction to prevent the spread of the virus. At the same time, the state's budget crisis has left more questions than answers, and New York is relying heavily on a package of direct federal aid to stave off major cuts. 

The cap on property tax increases has been in place since 2012, limiting tax increases to 2% or the rate of inflation, whichever is lower, with some exceptions. The measure is meant to combat some of the highest property taxes in the country.