New York City Cash Balance Projection December 1, 2020

FY21 began with $6.627 billion in cash-on-hand, $483 million lower than in FY20.  However, the gap between current cash balances and prior year cash balances reversed a few days later, and FY21 cash balances have been consistently running above year-ago levels ever since. The City collected $9.9 billion in property tax in 1Q21, compared to $7.7 billion in 1Q20.  At same time, the City spent less on personal services and capital expenditures than previously anticipated.  The City reached agreements with some municipal unions to delay certain backpay and welfare fund payments for employees and retirees.  The largest agreement was reached with the United Federal of Teachers to postpone $450 million in lump-sum payments stemming from the 2009-2011 collective bargaining round.   The City also took advantage of a provision in the federal CARES Act to defer payment of the employer share of the Social Security tax, which has allowed the City to save approximately $150 million per month from April through November 2020.  In addition, because of the coronavirus pandemic, the City put on hold some capital projects.  In 1Q21, the City spent $1.9 billion on capital projects, compared to $2.7 billion a year ago.  As of November 30, 2020, the cash balance stands at $2.241 billion, compared to $2.467 billion at the same time last year.  The average cash balance in July-November, 2020 measured $7.804 billion compared to $6.209 billion during the same period last year.

The accompanying updated projection outlines expected cash balances in the NYC Central Treasury from December 1, 2020 to March 31, 2020, and incorporates guidance provided in the FY20 November Plan.

Projected Cash Balances (December 1st – March 31st)

Although revenues have been running ahead of projections so far this year, some budgetary risks remain.  Most significantly, NYS has threatened to reduce local aid by as much as 20 percent if Congress does not include additional relief to state and local governments in the next stimulus package, the timing and size of which remains an open question.

In the near term, the City has sufficient funds to sustain its operations.  We project that cash flow balances will average $5.770 billion during the next four months compared to $6.082 billion during the same time last year.

The FY21 cash balance low point will occur during the first week of December and will measure $1.9 to $2.2 billion, higher than the last year’s low of $1.769 billion.  In the last ten years, the lowest seasonal low occurred in FY10 and measured $449 million.

Projection details are in the following pages of this document.