New York City Cash Balance Projection June 2023

On April 21st, the City’s cash balance reached $18.7 billion, the highest amount on record, due to a combination of normal seasonal highs, timing, and circumstances particular to this year. The 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.

During FY 2023 through May, the City collected $111.2 billion in revenues and incurred $105.5 billion in expenditures, for a net gain of $5.7 billion.  This year’s revenues have grown 7.9%, or $8.1 billion from the same period last year.  At the same time, expenditures increased 1.5%, or $1.6 billion.

Since the beginning of December, a gap began to develop between the FY23 and FY22 cash balances, as shown in the chart below.   The City’s cash balances benefited from robust tax collections.  Combined property tax receipts from December through May were about $1 billion higher than the prior year.  Combined sales tax receipts from December through May were about $352 million higher than last year.   In addition, banking corporation tax receipts were surprisingly high, as a result of audits.

COVID-19 relief funding bolstered the City’s cash position.  On January 3rd, the City received $2.3 billion in American Rescue Plan-State and Local Fiscal Recovery Funds (ARP-SLFRF) and Coronavirus Response and Relief Supplemental Appropriations (CRRSA) education grants.   From December through May, the City also received over $1.7 billion in FEMA from the Department of Homeland Security for reimbursement of COVID-19 related expenditures.

In addition, capital transfers from December through May measured $4.549 billion, versus $3.693 billion in at the same time last year.

On May 31, 2023, the cash balance measured $13.847 billion, $6.2 billion higher than at the same time last year.  During the last twelve months, cash balances averaged $10.774 billion, versus $7.735 billion during the same period last year.

Balances are projected to remain high in the near term but should begin to gradually decline in FY 2024, in part due to pay-outs for retroactive collective bargaining agreements.

The accompanying updated projection outlines expected cash balances in the NYC Central Treasury from June 1 to September 29, 2023, and incorporates guidance provided in the FY24 Executive Budget.

NYC Projected Cash Balances ($ in Millions)

The City’s cashflow is very 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 2024.  The projection indicates a fiscal year-end (June 30, 2023) closing balance in the range of $12.9 billion to $14.8 billion, compared to $8.2 billion in FY22, $8.5 billion in FY21, $6.6 billion in FY20, $7.1 billion in FY19, $9.4 billion in FY18.

This year, the Executive Budget assumes that in June the City will pay $2.431 billion into the Retiree Health Benefits Trust (RHBT) for FY 2023 pay-as-you-go retiree health and welfare benefits. Last year’s payment into the RHBT equaled $2.710 billion for FY 2022 benefits and $792 million for FY 2023 benefits.

The Executive Budget also projects a prepayment of debt service in the amount of $3.035 billion, which includes $868.4 million of General Obligation (GO) debt service and $2.166 billion of Transitional Finance Authority Future Tax Secured (TFA FTS) debt service. We assume that the surplus of $1.7 billion projected by this Office in its review of the Executive Budget, will bring the final prepayment to $4.7 billion. The prepayment at the end of FY22 equaled $6.114 billion.

Last year, on June 6^th, the City received $2.1 billion and on July 14th, the City received $809.7 million in the Coronavirus State and Local Recovery Funds (SLFRF), a part of the American Rescue Plan Act of 2021.  This year, even though COVID-19 stimulus aid won’t recur, the City will maintain record high cash balances in June-September, 2023.

The forecast incorporates higher payroll expenditures associated with recently reached agreements with DC 37 and NYC PBA.  DC 37 members already received a $3,000 signing bonus in April and some retroactive wage increases in May, and will receive the rest of retroactive wage increases in June.  Meanwhile, NYC PBA members will be paid on July 21^st, 2023.

The forecast also assumes rising expenditures associated with housing and providing services to over 45,000 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.

The City does not project any new money bond issuance in the 4^th quarter of FY 2023.  New bond issuance will resume in the beginning of FY 2024.  Capital transfers will be low in June and July but will pick up in August and September.

We project that cash balances will average $13.368 billion during the next four months, compared to $9.200 billion during the same time last year.

Projection details are in the following pages of this document.