New York City Cash Balance Projection September 2023

At the close of FY 2023 (on June 30, 2023), the City recorded the end-of-year cash balance of $12.387 billion, compared to $8.159 billion a year ago. Daily cash balances during FY23 averaged $11.122 billion, $3.598 billion higher than in FY 2022.

Overall, the City continued to show healthy economic growth in FY 2023.  During the fiscal year, the City collected $74.6 billion in tax receipts, $3.3 billion more than in FY 2022.  Tax collections increased due to strong property and sales taxes, unexpectedly high banking tax receipts from audits, and growth in the leisure and hospitality sector.  On January 3rd, the City also 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. On April 21st, 2023 the City recorded the highest cash balance on record: $18.699 billion.  See a further discussion of the City’s cash balances in Spotlight: Is Cash Really King in New York City?

Strong tax collections and the continuation of federal aid supported $123.7 billion in spending in FY 2023 as well as a significant prepayment of $5.478 billion towards FY 2024 expenses. The prepayment consisted of $2.812 billion of General Obligation (GO) debt service and $2.166 billion of Transitional Finance Authority (TFA) debt service. As prepayment of FY 2024 retiree health benefits, the City deposited $500 million into the Retiree Health Benefits Trust Fund (RHBT).   This year’s payment to the RHBT for FY 2023 benefits equaled $2.398 billion, which is net of a prepayment of $792 million made in June 2022.

During the 12 months ending on August 31st, cash balances have averaged $11.615 billion, compared to $7.482 billion at the same time last year.  New York City is starting September 1, 2023 with $9.800 billion in cash, above last year’s figure by $2.214 billion.  The City’s 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.

For a full description of FY23 and the last quarter, please see the accompanying 4Q FY 2023 Quarterly Cash Report.

Projected Cash Balances (September 1^st – December 29^th)

The updated projection below outlines expected cash balances in the NYC central treasury from September 1 to December 29, 2023, incorporating guidance provided in the FY24 Adopted Budget and increased spending trends related to the asylum seekers, in particular.

Cash balances are projected to remain high in the near term, significantly above cash balances for the same time period in FYs 2021-2023.  The City has sufficient cash to sustain its operations, and does not anticipate issuing deficit bonds or notes in FY 2024.  Our projection shows that, as in previous years, the annual cash balance low will occur in early December and will measure between $5.1 billion and $6 billion.  The seasonal low measured $3.966 billion in FY 2023, $1.338 billion in FY 2022, and $2.143 billion in FY 2021.

The cash forecast is consistent with our assessment of the revenue forecast in the City’s Adopted Plan.  The FY 2024 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, with business and personal income and pass-through entity taxes dipping below last year’s levels.

The forecast incorporates higher payroll expenditures associated with recently reached agreements with the District Council 37, the Police Benevolent Association, the United Federal of Teachers, and 11 unions for Uniformed Officers.  The forecast also includes the City’s contribution to the NYC Health + Hospitals (H+H) to fund higher nurse salaries provided for in the recent contract with the New York State Nurses Association. In recent years, the City has covered collective bargaining increases on behalf of H+H.

The forecast also assumes rising expenditures associated with housing and providing services to over 58,000 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.

Overall, cash flow balances are estimated to average $8.122 billion during the next four months compared to $6.691 billion during the same time last year.

Projection details are in the following pages of this document.