New York City Cash Balance Projection December 1, 2025

The City began FY 2026 (on June 30, 2025) with $12.229 billion in cash, up from $10.410 billion a year prior. However, cash balances have declined sharply since the start of the fiscal year.  In the first quarter of FY 2026 (1Q26), the City collected $34.696 billion in revenues and incurred $39.234 billion in expenditures, resulting in a net cash outflow of $4.538 billion.

Total receipts in the quarter rose just 0.3%, and excluding capital reimbursements, declined 2%. The City received $3.292 billion in capital reimbursements in 1Q26, compared to $2.543 billion the prior year.

The largest factor behind weaker receipts was the anticipated drop in Covid-related funding. The City received just $297 million in COVID-19 aid and FEMA reimbursements in 1Q26, down from $2.487 billion in 1Q25.

The City also increased debt service funding by $568 million in the first quarter, reflecting a smaller prepayment at the end of FY 2025. Prepayment amounts have steadily declined from $5.479 billion in FY 2023 to $4.397 billion in FY 2024 and $3.787 billion in FY 2025.

Tax collections increased 8.3% compared to the prior fiscal year, but performance was mixed.

The City collected over $15.385 billion in Real Property Tax revenue in June and July 2025, an increase of $312 million from the same period last year.  According to the final FY 2026 property tax assessment roll, citywide taxable billable assessed value, the portion of market value to which tax rates are applied (as estimated by the City’s Department of Finance), increased by 5.39 percent to $308.516 billion.

Personal Income Tax, including the Pass-Through Entity Tax (PTET), and the Unincorporated Business Tax grew 18.7% and 12.2%, respectively.  The Sales Tax grew by 6.8%, outpacing inflation in the NYC metropolitan area.

In contrast, Mortgage and Real Property Transfer Taxes showed weakness in 1Q26 relative to the same period in FY25, down 16.1%. Sales activity in the NYC real estate market remains mixed. Manhattan luxury market is strong, with roughly 60 – 65% of transactions closing in cash—bypassing the mortgage-recording tax—while the non-luxury market is weighed down by high mortgage rates.[1]

The General Corporation tax declined 9.4%. The decline was driven primarily by weaker collections from the finance and insurance, trade, and manufacturing industries.

While COVID-related aid has dwindled, expenditures continued rising. Growth reflects higher public assistance and social services costs, substantial advance payments to City-funded nonprofits, and elevated senior college expenses. Of note, in October, the City Council passed  Local Law 2025/156 which requires, in general, advance payments of 50% of the value of contracts awarded to nonprofit entities, with exceptions for certain contracts awarded by the Department of Homeless Services and the Office of Criminal Justice, and residential foster care and emergency domestic violence contracts.

Payroll costs also increased, driven by collective bargaining agreements and higher headcount. Health insurance spending rose following the New York State Department of Financial Services’ approval of a 12.18% premium increase for the HIP-HMO plan covering active employees and pre-Medicare retirees.

During the last 12 months, cash balances have averaged $10.413 billion, compared to $10.196 billion at the same time last year.  New York City is starting December 1, 2025 with $3.001 billion in cash, below last year’s figure by $2.091 billion.  The City’s cash balance includes $1.969 billion in the Revenue Stabilization Fund (RSF), the City’s rainy-day fund, inclusive of the end-of-year General Fund surplus of $5 million. The majority of funds, $1.455 billion, were allocated to the RSF in FY 2022.

For more information, please see the accompanying 1Q FY 2026 Quarterly Cash Report.

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

The updated projection below outlines expected cash balances in the NYC central treasury from December 1, 2025 to March 31, 2026, incorporating guidance provided in the November 2025 Financial Plan. The forecast is based on two main assumptions: that economic growth will continue, though at a slower pace, and that federal revenues will be received as budgeted and in line with current funding agreements and schedules.

December 2025-March 2026 average cash balances are expected to be lower than in FYs 2023 – 2025 and possibly falling below FY 2022 balances in February and March.

The City’s cash balances typically dip in late November to early December, prior to the arrival of property tax payments due on January 1. Over the past three years, the annual low point occurred either on December 1 or December 2. We expect that this year’s cash low will also occur around the same time and will measure between $2.453 billion and $2.805 billion.  The seasonal low measured $4.602 billion in FY 2025, $5.223 billion in FY 2024, $3.966 billion in FY 2023, and $1.338 billion in FY 2022.  As noted above, the cash balance now includes $1.969 billion in RSF, which is a component of the General Fund balance (reported as “committed” balance in the City’s financial statements). It should be noted that the RSF balance is calculated on an accrual (not cash) basis at the end of the fiscal year. Nonetheless, absent the RSF balance, the low cash point would be substantially lower than in past years.

The updated cash flow projection includes revised estimates for public assistance and health insurance costs.

Spending on cash assistance should level off. To qualify for cash assistance, recipients must now demonstrate employment, participate in a job search program, or show that they are unable to work. 601,757 New Yorkers received cash assistance in September 2025, higher than 573,112 in September 2024 but down slightly below the recent peak of 602,894 people in July 2025.[2]

The forecast also assumes that the number of asylum seekers in shelters will continue to fall, though at a slower rate than earlier in the year. As of October 2025, 32,856 asylum seekers were in the City’s shelter system, down from 59,898 a year ago, a decrease of 27,042 people, or 45%.

Moreover, the City is currently preparing to implement a new employee health insurance plan (the NYC Employees PPO or NYCE PPO plan), expected to take effect on January 1, 2026. By managing and self-funding the plan instead of paying premiums to an insurance carrier, the City expects to save taxpayers up to $900 million annually through the elimination of profit margins, care coordination, improved provider discounts, and reduced administrative expenses. Despite the projected savings, it is unlikely the City will see declining health insurance costs in the near term. “Savings” from the new plan are needed to fund ongoing health benefits that are the responsibility of the Health Insurance Stabilization Fund (HISF).  Please see this Office’s recent fiscal note to learn more about the Fund.

The projection also assumes that $4.421 billion in bond proceeds will be moved into the General Fund between December and March 2026, to offset $5.816 billion in capital expenditures. Over time, capital expenditures and the respective reimbursements are expected to offset one another.

Overall, cash balances are estimated to average $6.342 billion during the next four months compared to $11.175 billion during the same time last year. Based on our projection, the City has sufficient cash (and sufficient flexibility in managing its cash position) to sustain its operations, and we don’t forecast a need to issue short-term debt in FY 2026. However, cash balances are dipping significantly lower than in recent years, and the City may be required to manage cash flow more aggressively throughout the year.

Endnotes

[1] https://www.defalcorealty.com/blog/manhattan-real-estate-market-report/

[2] https://www.nyc.gov/assets/hra/downloads/pdf/ca_recipients.pdf