New York City Cash Balance Projection December 2023

The City’s cash balances usually dwindle in late November to early December, before the arrival of property tax payments which are due on January 1.  But this November, the City’s cash balances remained historically high for this time of year, averaging $7.521 billion, compared to $6.195 billion in November 2022 and $4.244 billion in November 2021.

New York City’s economy continues to expand, benefitting from growth in employment and the return of tourism. Tax revenues for the first quarter of FY 2024 grew 4.5% from the same quarter last year.  The City collected almost $9.3 billion in property tax in 1Q24, an increase of $267 million from last year, with rising assessments driving the growth.  Personal income, including pass-through entity tax (PTET), and business taxes grew 23.3% and 9.7%, respectively.  The sales tax grew 4%, helped by higher prices and from rebounding activity in the tourism and hospitality sectors.  Hotel occupancy rates have almost fully recovered to pre-pandemic levels and average daily room rates rose to record levels, pointing to strong tourism demand. As a result, the hotel occupancy tax rose 6.3%.

During the last 12 months, cash balances have averaged $12.133 billion, compared to $7.655 billion at the same time last year.  New York City is starting December 1, 2023 with $5.353 billion in cash, above last year’s figure by $1.079 billion.  The City’s cash balance includes $1.954 billion in the Revenue Stabilization Fund (RSF), the City’s rainy-day fund. The majority of funds, $1.455 billion, were allocated to the RSF in fiscal year 2022.

For more information, please see the accompanying 1Q FY 2024 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, 2023 to March 29, 2024, incorporating guidance provided in the FY24 November Plan, and increased spending trends related to the asylum seekers, in particular.

The City’s cash position remains strong.  December 2023-March 2024 average cash balances are expected to be lower than last year, but higher than cash balances in FYs 2021 and 2022.

In the last three years the annual cash balance low occurred on December 1^st.  We expect that this year’s cash low will also occur around that time, and will measure between $4.9 billion and $5.6 billion.  The seasonal low measured $3.966 billion in FY 2023, $1.338 billion in FY 2022, and $2.143 billion in FY 2021.

The forecast assumes a decline in personal income and PTET taxes compared to last year.  Meantime, business and sales taxes are expected to rise moderately year-over-year.

The forecast also assumes growing costs associated with providing shelter and services to over 65,000 asylum seekers currently in shelters and humanitarian emergency response and relief centers.  These expenditures are included in public assistance and other social services and vendor payments categories. H+H also receives funds for the operation of the City’s Humanitarian Emergency Response and Relief Centers (HERRCs).

Overall, cash balances are estimated to average $9.882 billion during the next four months compared to $11.445 billion during the same time last year.

Projection details are in the following pages of this document.