New York City Cash Balance Projection September 1, 2022

At the close of FY 2022 (on June 30, 2022), the City recorded the end-of-year cash balance of $8.159 billion, compared to $8.469 billion a year ago. Daily cash balances during FY22 averaged $7.524 billion, $831 million below the prior year’s number.

Overall, in FY 2022 the City benefited from robust economic growth and large gains on Wall Street, which lead to record-high non-property tax receipts, with personal income, sales, and business taxes (general corporation and unincorporated business taxes) reaching new peaks.  Also, on June 6 and on July 14, 2022, the City received $2.1 billion and $809.7 billion, respectively, in federal pandemic aid provided under the American Rescue Plan Act of 2021.

Strong tax collections and the continuation of federal aid supported an increase in spending as well as a significant prepayment towards next fiscal year. Total expenditures, including capital expenditures, in FY 2022 increased 10.4% or $11.5 billion compared to the previous year. This year’s prepayment totaled $6.114 billion, very close to last year’s prepayment of $6.107 billion. The prepayment consisted of $3.318 billion of General Obligation (GO) debt service, $1.965 billion of Transitional Finance Authority (TFA) debt service, $792 million to the Retiree Health Benefit Trust (RHBT), and $40 million to lease debt prepayments.  This year’s payment to the RHBT for FY22 expenditures equaled $2.710 billion, versus $2.775 billion in FY21. The City also made an additional deposit of $750 million into the RHBT above what is needed for retiree pay-as-you-go health benefits.  In addition, the City appropriated $1.45 billion into the Revenue Stabilization Fund, also known as the Rainy Day Fund, but this deposit stays in the cash balance.

During the last 12 months, cash balances have averaged $7.482 billion, compared to $8.502 billion at the same time last year.  New York City is starting September 1, 2022 with $7.586 billion in cash, above last year’s figure by $1.397 billion.

For a full description of FY22 and the last quarter, please see the accompanying report.

Projected Cash Balances (September 1^st – December 31^st)

The updated projection below outlines expected cash balances in the NYC central treasury from September 1 to December 31, 2022, incorporating guidance provided in the FY23 Adopted Budget.

Projected Cash Balances

The City’s cash position remains strong, and we expect there will be sufficient 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 $1.8 billion and $2.1 billion.  The seasonal low measured $1.338 billion in FY 2022, $2.143 billion in FY 2021, and $1.769 billion in FY 2020.

The cash forecast is consistent with our assessment of the revenue forecast in the City’s Adopted Plan.  The FY 2023 forecast incorporates the growth in property tax revenue, reflecting the growth in assessments.  At the same time, we assume slower growth in non-property tax revenue going forward, consistent with the Federal Reserve’s objective to achieve a so-called soft landing. The forecast also includes the recently enacted Pass-through Entity Tax (PTET).  This optional tax allows taxpayers with pass-through income from New York City partnerships and New York S corporations to pay the PTET and receive a commensurate credit on their New York City personal income tax. The PTET was implemented to counteract the loss of federal personal income tax deductions for state and local taxes and is expected to be revenue neutral for the City. The City expects to collect close to $1.5 billion in PTET in December 2022 and will see the offsetting reduction in personal income tax receipts later in the fiscal year. Finally, while the City’s budget anticipates $9.9 billion less in Federal categorical grants (primarily COVID-related revenue) in FY23 compared to FY22, the timing of receipts differentially impacts the cash balances.  For example, FEMA payments for COVID response are expected to trail accrued amounts significantly.

Overall, cash flow balances are estimated to average $5.889 billion during the next four months compared to $5.265 billion during the same time last year.

Projection details are in the following pages of this document.