New York City Cash Balance Projection September 1, 2021

A coronavirus pandemic and containment measures began in NYC in March, 2020. After a brutal year, NYC is getting back on its feet thanks to the combined impact of a mass vaccination rollout and federal stimulus funding for Covid-19 response and recovery, education, transportation, and social-service programs.

At the close of FY 2021 (on June 30, 2021), the City recorded the end-of-year cash balance of $8.469 billion, compared to $6.626 billion a year ago. . This year’s payment to the RHBT equaled $2.775 billion, versus $1.680 billion in FY20.  Last year, because of COVID-induced economic uncertainty, the City reduced its payment to the RHBT for FY20 pay-as-you-go retiree health insurance by $1 billion, and drew on the Trust’s excess funds to make up the shortfall in remittance.  This year, as part of a larger prepayment of next year’s expenses, the City added $425 million above the amount required for FY21 pay-as-you-go retiree health benefits into the RHBT. Overall, FY21 prepayment measured $6.107 billion, compared to $3.819 billion at the end of FY20.

During the last 12 months, cash balances have averaged $8.502 billion, compared to $6.630 billion at the same time last year.  New York City is starting September 1, 2021 with $6.189 billion in cash, above last year’s figure by $1.861 billion.

The accompanying updated projection outlines expected cash balances in the NYC central treasury from September 1 to December 31, 2021, and incorporates guidance provided in the FY22 Adopted Budget.

Projected Cash Balances

We project that cash balances will be slightly lower than last year’s numbers. We’re cautiously optimistic that in spite of Covid Delta resurgence, NYC’s economy will continue to grow as more workers return to the office and tourism and entertainment industries continue to recover.

The forecast incorporates the drop in property tax revenues, driven by a steep decline in property values from the pandemic, especially commercial real estate values.   Meanwhile, the growth in non-property tax revenues should offset some of the decline in property tax revenues.

Taking advantage of a provision in the federal CARES Act, the City has deferred payment of payroll taxes from April 2020 to December 2020, saving approximately $1.35 billion. Deferred payments will be due in 2 installments. The first payment will be made in December 2021.

Our cash position remains strong, and we expect to have enough cash-on-hand during the leanest part of the year.  Our projection shows that, as in previous years, the annual cash balance low will occur in early December and will measure between $1.7 billion and $2.0 billion.  The seasonal low measured $2.143 billion in FY 2021, $1.769 billion in FY 2020, and $2.211 billion in FY 2019.

Overall, cash flow balances will average $4.898 billion during the next four months compared to $5.407 billion during the same time last year.

Projection details are in the following pages of this document.