New York City Cash Balance Projection June 1, 2022

As of May 31, 2022, the cash balance stands at $7.632 billion, compared to $9.996 billion at the same time last year. This difference in balances is primarily due to the timing of Federal aid receipts, as described further below. Thus far in FY 2022, cash balances averaged $7.735 billion, versus $7.941 billion during the same period last year.

In recent months, the City benefited from higher tax receipts, boosted by soaring Wall Street profits, robust Personal Income Tax (PIT) collections, and from the influx of mortgage recording and real property transfer tax receipts as the real estate market bounced back from the lows experienced during the Covid-19 pandemic. The City’s sales tax collections are also growing as tourism, transit ridership, and employment are all improving after steep reductions during the height of the pandemic. A comprehensive analysis and forecast of tax revenues is available in Comments on New York City’s Executive Budget for Fiscal Year 2023 and Financial Plan for Fiscal Years 2022-2026. We project that the City’s cash balances will continue to benefit from strong tax revenues in the near term.

The accompanying updated projection outlines expected cash balances in the NYC Central Treasury from June 1 to September 30, 2022, and incorporates guidance provided in the FY23 Executive Budget.

Projected Cash Balances (June 1nd – Sept 30st)

The City’s cashflow is healthy in the near term. The City has sufficient cash to sustain its operations, and does not anticipate issuing deficit bonds or notes in FY 2023. The projection indicates a fiscal year-end (June 30, 2022) closing balance in the range of $9.7 billion to $11.1 billion, compared to $8.5 billion in FY21, $6.6 billion in FY20, $7.1 billion in FY19, $9.4 billion in FY18, $9.3 billion in FY17.

This year, the Executive Budget assumes that in June the City will pay $2.686 billion into the Retiree Health Benefits Trust (RHBT) for FY 2022 pay-as-you-go retiree health and welfare benefits. Last year’s payment into the RHBT equaled $2.775 billion for FY 2021 benefits. In addition, the Executive Budget allocates $500 million as a prepayment for FY 2023 retiree health benefits, compared to the $425 million prepayment made in FY 2021 for FY 2022. The Executive Budget also projects a prepayment of debt service in the amount of $4.772 billion, which includes $2.768 billion of General Obligation (GO) debt service, $1.965 billion of Transitional Finance Authority Future Tax Secured (TFA FTS) debt service, and $40.013 million of lease debt service. In total, the FY 2022 prepayment equals $5.270 billion, compared to $6.107 billion at the end of FY21.

In addition, we assume that the City will appropriate a total of $2.5 billion ($1.8 billion more than in the Executive Budget) for deposit into the Revenue Stabilization Fund (RSF), as recommended by the Comptroller’s Office [Preparing for the Next Fiscal Storm : Office of the New York City Comptroller Brad Lander (nyc.gov)].

Last year, between March and June 2021, the City received an unprecedented $5.6 billion of Federal aid. On May 18, 2021, the City received $2.1 billion and on June 17, 2021, the City received $809.7 million in State and Local Recovery Funds under the American Rescue Plan. The forecast assumes we will receive another $2.9 billion in federal stimulus funding in two payments in the final two weeks of the fiscal year.

We project that cash balances will average $10.563 billion during the next four months, compared to $9.867 billion during the same time last year, the difference of which is largely equal to the Revenue Stabilization Fund.

Projection details are in the following pages of this document.