A schools music festival that has been supported by Auckland ratepayers for 77 years is under threat because of funding cuts by a cash-squeezed Auckland Council.

More than 4500 primary school students from Whangaparaoa to South Auckland take part in eight festival concerts held in the Auckland Town Hall every November in what is billed as "the largest festival of its type held in New Zealand".

But the council's "Auckland Live" agency, which runs the Town Hall and Aotea Centre, has told organisers the Auckland Primary Principals' Association (APPA) that they will have to pay more towards covering the costs.

The sums involved - costs of $90,000 a year, of which the association currently pays only $36,500 - are minuscule compared with the options of $148 million or $188 million which the council may spend on its preferred options for housing teams in the America's Cup.

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But Howick Primary School principal Leyette Callister, who chairs the festival organising committee, said the council now only seemed to value "flashy" events.

"This is so critical to the future of the city in terms of valuing children, instead of just ones that bring in money and are flashy," she said.

"I think if the wider Auckland ratepayers knew the city is telling schools to get stuffed, we'll just put money into the yachts, I think there would be an outcry."

Regional Facilities Auckland, the council-controlled organisation which includes Auckland Live, says in its latest statement of intent that it has "had to absorb $7.9 million of efficiency savings since 2012".

"For the first time, this Statement of Intent includes provision for service level reductions in the operations of Auckland Art Gallery and Auckland Live, and may also impact service levels at Auckland Stadiums and Auckland Zoo," the agency says.

The art gallery said this month that it may have to close on one or two days a week because of the cut in its funding.

Auckland Live director Robbie Macrae said the direct costs of running the music festival had risen to about $50,000 a year, excluding overheads, but the schools' contribution, covered by ticket sales, had been fixed at $36,500 since 2012.

"Auckland Live effectively provides a subsidy of just over $53,000, compared to other community rentals for a similar time period," he said.

"Auckland Live fully understands and empathises with the festival but needs to be able to pass on the increased costs in a current environment where the organisation itself is under increased pressure through decreased funding, and heightened expectations of increased revenues."

He said Auckland Live had asked the schools to pay "at least meet direct operating costs" of about $50,000 initially, and to "stabilise their rental contribution over the next four years at the same level as other comparable community users" - about $90,000.

"Auckland Live is not a funding organisation. There are opportunities for APPA to apply for grants through other council grant mechanisms and trusts, and also to review their ticket pricing."

However, Callister said applying for grants every year was not feasible.

"I'm a principal running a school. The energy and the cost required to apply for grants is massive," she said.

Nor could the schools raise ticket prices, currently $15 for adults and $10 for children and seniors.

"The South Auckland people would stop coming," she said.

She said each of the eight concerts each year included a wide range of music from classical performances to music from popular movies, Pacific cultural performances and kapahaka.

"For some, getting on stage in the Town Hall is an epic moment. It can be life-changing," she said.

Manukau councillor Fa'anana Efeso Collins, acting chair of the Auckland Council committee that funds arts events, said the funding pool had been cut but requests had increased because of higher charges by other parts of the council.

"There is no way that we are going to have the level of funding that they are going to be after," he said.

He said the only way to avoid the funding crunch might be to raise rates by more than the 2.5 per cent limit promised by Mayor Phil Goff before he was elected last year.

"If you look at the feedback we got, especially out south, there were quite a number of people who say we would consider a 3.5 per cent rates rise," he said.

But Orakei councillor Desley Simpson, who ran the schools festival for 35 years before being elected to council, said councillors had identified $337 million in "efficiency savings" that could be trimmed off the council budget.

She said councillors from left and right had united in asking Goff to keep the art gallery open seven days a week, and she was confident that the council would not allow the schools music festival to die.

"There were some funding cuts. We are financially constrained," she said. "Now we are heading to the long-term plan and we will be looking to hear from organisations like Regional Facilities Auckland on how this one year has gone."