By Daniel Wiessner 

ALBANY, N.Y., Feb 20 (Reuters) - New York's largest teachers union on Wednesday sued to overturn the state's cap on annual property tax increases, claiming it perpetuates inequities between wealthy and poor school districts.

Under the cap, which took effect last year, school districts and local governments may raise property taxes each year by up to 2 percent or the rate of inflation, whichever is lower. School districts, which are funded through property taxes and state aid, may override the cap if 60 percent of local residents vote to do so. The cap does not apply to New York City.

In a lawsuit filed in State Supreme Court in Albany, New York State United Teachers said that by limiting the amount of money school districts can raise, the tax cap violates the state's constitutional obligation to provide a "sound basic education" to all students.

"While, on its face, the tax cap gives the appearance of equality, in effect the tax cap locks in existing inequalities, and has a disproportionate, negative impact on the ability of the lower wealth districts and their voters to provide educational opportunity to school children," the complaint said.

The union is seeking to overturn the cap as it applies to school districts, not local governments.

A spokesman for Governor Andrew Cuomo said in a statement that most school districts have been able to maneuver within the cap, and that it has served to rein in skyrocketing property taxes statewide.

"This special-interest lawsuit is a fiscally irresponsible move that seeks to undermine the progress that has been made," said the spokesman, Richard Azzopardi.

The lawsuit also said the requirement that school districts secure 60 percent approval in budget votes to override the cap violates equal protection because it applies only to schools, and not to municipalities.

It said the 60 percent rule "arbitrarily and discriminatorily places a higher hurdle on school district voters who favor providing enhanced educational opportunities to school children."

The office of New York State Comptroller Thomas DiNapoli, who is listed as a defendant, did not immediately return a request for comment. A spokeswoman for the state Education Department declined to comment.

The case is New York State United Teachers v. New York, New York State Supreme Court, Albany County No. 963-2013.

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