New York City Cash Balance Projection March 2024

On December 1, 2023, New York City’s unrestricted cash balance reached a seasonal low of $5.223 billion, compared to $3.966 billion in FY23 and $1.338 billion in FY22.  The cash total includes the Revenue Stabilization Fund (RSF) balance of $1.959 billion.

In the second half of FY23, the City’s cash balances achieved historically high levels.  On April 21, 2023, the City’s cash balance hit $18.699 billion, the highest amount ever recorded.  Over the last 12 months, the City has continued its post-pandemic economic recovery, albeit with slower employment growth. Tax collections for the period grew due to increasing residential property values, robust consumer spending, strong business income tax payments, and the continued gains in tourism.  The City’s cash balances also benefited from the unprecedented amount of Federal pandemic relief funds totaling $4.929 billion.

On the flip side, the number of New Yorkers receiving public assistance and social services has grown.  The increase in social services expenditures is due to the provision of shelter and services to asylum seekers, as well as rental assistance, and shelter for non-asylum seekers.  The cash balances are also impacted by higher labor costs, due to recent labor agreements with the City unions, and by growing overtime spending.

During the last 12 months, cash balances have averaged $12.115 billion, versus $8.938 billion during the same period last year.  In January, 2024, cash balances fell below previous year’s levels.  New York City is starting March 1, 2024 with $8.079 billion in cash, below last year’s figure by $3.045 billion.

The accompanying updated projection outlines expected cash balances in the NYC central treasury from March 1, 2024 to June 28, 2024, after incorporating January 2024 Financial Plan values.

NYC Projected Cash Balances

The City’s cash position remains strong.  Our forecast shows that cash balances will be lower than last year’s figures but higher than cash balances in FYs 2022 and 2021. We project that cash flow balances will average $11.198 billion during the next four months, compared to $14.138 billion in FY23, $7.787 billion in FY22, and $9.552 billion in FY21.

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 asylum seekers currently in shelters and Humanitarian Emergency Response and Relief Centers (HERRCs), which are partially offset by State Aid.  Moreover, the forecast incorporates retroactive pay increases due to NYC managers, who are not unionized, and to NYC staff analysts.

As of the FY 2025 Preliminary Budget, this year’s prepayment is $3.779 billion, and amount that will rise in the FY 2025 Executive Budget. Last year’s prepayment was $5.478 billion.  It is assumed that the FY 2024 contribution to the Retiree Health Benefit Trust for pay-as-you-go OPEB costs will equal $2.428 billion, versus $2.398 billion last year. It is possible that at year-end the City will prepay a portion of FY 2025 pay-as-you-go costs as well.