New York City Comptroller Brad Lander Issues Annual Report on Capital Debt and Obligations for Fiscal Year 2023

New York, NY — New York City Comptroller Brad Lander released the Annual Report on Capital Debt and Obligations for fiscal year 2023, which assesses the current state of the City of New York’s debt burden compared to its tax base, the statutory debt limit, and other cities across the nation. The City’s debt finances capital construction and improvements to the infrastructure relied on by millions of residents, tourists, and daily commuters.

“New York City’s infrastructure is the foundation for our shared thriving. City capital projects are the school buildings that educate our kids; the tunnels that bring us clean water; our public parks, libraries, hospitals, affordable housing for families; the space and technology needed for our municipal government and courts; and the roads and bridges that New Yorkers rely on every day. Capital debt financing is how we pay for most of those projects, so it is critical we keep a sharp eye on our capital debt and obligations,” said New York City Comptroller Brad Lander.

While federal and state investment, such as the Infrastructure Investment and Jobs Act (IIJA) and the New York State Environmental Bond Act, will finance some projects in the years ahead, the City funds the vast majority of its infrastructure projects through debt financing.

The City’s debt, excluding that of the New York City Municipal Water Finance Authority, grew from $39.55 billion in FY 2000 to $95.27 billion in FY 2022, an increase of 141%. Over the same period, New York City personal income grew by 136% and local tax revenues by 205%.

By several measures, the City’s debt burden relative to its tax base has improved over the past two decades. Debt service as a percentage of local tax revenues dropped from 17.2% in FY 2002 to 9.7% in FY 2022. Debt outstanding as a percent of the City’s total personal income has decreased from 15.2% in FY 2002 to 13.2% in FY 2022. Finally, debt outstanding as a percent of taxable assessed property values decreased from 41.7% in FY 2002 to 36.6% in FY 2022. Debt as a percentage of property market values was 3.4% in FY 2021, using a sales-based valuation of real estate.

The City’s outstanding debt remains well under the State constitutional limit. The City’s debt ceiling, which is defined by the State constitution as 10% of the five-year rolling average of the full value of taxable City real property, is currently $127.45 billion. Current outstanding debt, which counts toward that debt-limit totals $85.94 billion as of July 1, 2022, leaving the City with a debt-incurring power of $41.51 billion.

The City’s strong credit rating is another bright sign for the City’s ability to afford its current debt. For FY 2022, Moody’s Investors Service maintained the City’s GO bond rating at Aa2; Standard and Poor’s Global Ratings (S&P) maintained its rating of the City’s GO bonds at AA; Fitch Ratings (Fitch) maintained its rating of GO bonds at AA- and changed its outlook to positive; and the City’s GO bonds received a rating of AA+ from Kroll Bond Rating Agency.

Together with the Mayor’s Office, the Comptroller has focused over the past year on reforming the City’s processes for capital projects procurement and execution, in order to reduce cost overruns and delays, create good jobs and economic opportunities, and strengthen the City’s capacity to deliver critical projects in the years ahead. The Comptroller has also identified the need to improve infrastructure planning to guide spending and prioritize projects.

“With aging bridges and sewer mains, growing housing and technology needs, and the urgent challenges of the climate crisis, our need for infrastructure improvements will grow in the coming years,” continued Comptroller Lander. “This report shows we have the fiscal capacity for growing capital investments. Now, it’s up to us to make them wisely and effectively.”

View the full Annual Report on Capital Debt and Obligations here.

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