Summary
Cash Balances[1]
At the close of 4Q18, the City’s unrestricted cash balance stood at $9.394 billion, virtually unchanged from the closing balance at the end of 4Q17. The 4Q18 average cash balance of $9.035 billion fell below the 4Q17 average by $363 million. As typical for this time of the year, expenditures exceeded receipts during the quarter, reducing the cash balance by $559 million.
FY18 Prepayment
The City’s practice is to dedicate any year-end budgetary surplus to a prepayment of the following year’s expenses. This year’s prepayment totaled $4.576 billion, compared to $4.169 billion at the end of FY17. The prepayment consisted of $1.902 billion of General Obligation (GO) debt service, $2.174 billion of Transitional Finance Authority (TFA) debt service, a $300 payment to the Retiree Health Benefits Trust Fund (RHBT) against retiree health costs for FY19, and $200 million of advance subsidy to Health + Hospitals (H + H). In addition to the prepayment, the City deposited $100 million into the RHBT above the amount required to cover retiree healthcare costs in FY19. Without prepayments, the City would have ended FY18 with $14.070 billion in cash-on-hand.
FY18 Results
FY18 was a volatile year for cash balances. The year began with $9.341 billion of cash-on-hand, $2.378 billion below last year’s figure. This was the lowest opening balance for the fiscal year since FY14. From mid-July through early December, cash balances fell precipitously, reaching $1.022 billion on December 4, 2017 – the lowest cash balance since FY10. However, cash balances recovered quickly at the end of December due to incoming real property and income tax receipts as New Yorkers rushed to prepay their taxes to beat the federal tax overhaul. Receipts remained strong for the remainder of FY18, rising 12.5% in 3Q18 and 6.5% in 4Q18. Overall, receipts exceeded expenditures by $52.7 million in FY18. In FY17, expenditures topped receipts by $2.378 billion. FY18 finished strong with $9.394 billion in cash. Once again, as in FY05-FY17, there was no need for the City to borrow short-term for operations.
Cash Receipts[3]
4Q18 Results
Total receipts in 4Q18 were the highest 4Q inflows on record, up 6.5% versus a year ago, with capital reimbursements largely responsible for the increase. Net of reimbursements for capital expenditures, 4Q18 cash receipts rose 1.6% versus a year ago. Capital transfers in 4Q18 totaled $3.016 billion, versus $1.612 billion in 4Q18.
The City collected $17.2 billion in tax revenues for 4Q18, compared to $16.7 billion at the same time last year. During the quarter, general corporation tax and personal income tax increased 17.4% and 14.3%, respectively. Meanwhile, the real property tax, the City’s largest source of revenue, declined 1.9% and the unincorporated business tax fell 13.1%.
During 4Q18, the City received $5.8 billion in Federal and State aid, down 6.5% compared to 4Q17. The State delayed funding for Senior Colleges, and the payment originally scheduled to be remitted in June arrived in July, and was not counted in the 4Q18 total.
FY18 Results
During FY18, total cash receipts measured $101.796 billion, an increase of $5.7 billion from the previous year. Net of reimbursements for capital expenditures, FY18 cash receipts increased 3.8% versus a year ago.
The five largest sources of cash in FY18 accounted for 61% percent of total receipts in FY18. These sources were real property tax collections of $26.5 billion, or 26.1% of total receipts; personal income tax of $13.4 billion, or 13.2% of total receipts; NYS education aid of $10.2 billion, or 10% of total receipts; sales tax of $7.4 billion, or 7.3% of total receipts; and general corporation tax of $4.5 billion, or 4.4% of total receipts.
Tax collections for FY18 totaled $60.137 billion, an increase of 6.9% from the previous year. The largest percentage gains were in personal income tax (up 21.3%), and banking corporations tax revenues (up 20.5%). Real property tax receipts rose 3.4% or $866 million. Sales tax was up 6.3%. Mortgage and real property transfer taxes declined 4.6%, reflecting the slowdown in NYC’s housing market.
During FY18, the City received $20.3 billion in Federal and State aid, compared to $21.4 billion in FY17, primarily due to timing in receipts. In FY18, Federal education aid was down 16.6% and NYS welfare aid was down 17.7%, on a year-over-year basis. NYS higher education aid declined a whopping 61.8%, because the State failed to send almost $800 million in Senior College funding to NYC in June.
Cash Expenditures
At $30.053 billion, 4Q18 cash expenditures appear virtually unchanged compared to 4Q17. PS spending, which includes payroll, pensions, health plan, social security, and supplemental (union-related) welfare benefits, totaled $13.9 billion in 4Q18. Embedded in this number is the City’s FY18 payment to the RHBT. This year’s payment to the RHBT equaled $1.995 billion, versus $2.258 billion in FY17 and $2.160 billion in FY16. For the fifth year in a row, the City also added funds into the RHBT above the amount required for FY18 pay-as-you-go retiree health benefits. This year’s additional contribution was $100 million, the same as last year. Medical assistance and public assistance were the fastest growing 4Q18 expenses, up 18.8% and 18.4%, respectively. All other social services spending, taken altogether, dropped 22.4%.
FY18 Results
Total expenditures, including capital expenditures, rose 3.4% versus a year ago, to a new record high of $101.744 billion. Net cash expenditures (which exclude capital expenditures) rose 3% in FY18. Personal service expenditures increased 2.7% versus a year ago. Gross payroll increased 3.6% and spending on fringe benefits rose 1.3%. Meanwhile, other-than-personal-service expenditures (OTPS) increased 2.4% versus a year ago, mostly due to an $828 million increase in spending on public and medical assistance. Outlays considered “All Other” increased 7.1%, due to increased City-funded capital spending and the inflow of cash to the restricted Fund 700 account.
Capital Expenditures (CapEx) and Reimbursements[2]
CapEx totaled $1.807 billion in 4Q18, up 2.6% from $1.761 billion in 4Q17. City-funded CapEx increased 6.2% while Non-City-funded CapEx declined 21.6%.
Reimbursements for CapEx in 4Q18 exceeded reimbursable expenditures, increasing the cash balance by $1.354 billion.
FY18 Results
Total CapEx equaled $8.779 billion in FY18, up 7.0% from $8.201 billion in FY17. The City-funded component increased 17.6% while the Non-City-funded component declined 44.4%.
FY18 reimbursements for CapEx totaled $9.996 billion and accounted for 9.8% of total cash receipts. Reimbursements during the fiscal year exceeded reimbursable expenditures, increasing the cash balance by $1.727 billion. Over time, reimbursements and CapEx should offset each other.
Financings
Two new money transactions closed in 4Q18. The first was a GO sale of $850 million of tax-exempt fixed rate bonds and $250 million of taxable fixed rate bonds. The second transaction was a TFA sale of $850 million of tax-exempt fixed rate bonds, $250 million of taxable fixed rate bonds, and $175 million of tax-exempt variable rate bonds.
FY18 Results
In FY18, New York City and the TFA issued a combined total of $10.8 billion in new money and refunding bonds, compared to $8.4 billion in FY17. In FY18, the City refinanced $3.4 billion in GO and TFA bonds, compared to $1.7 billion in FY17.
FY18 refundings produced $613 million in budget relief over the life of the bonds, or $571 million on a present value basis. The refunding activity in FYs 2016 and 2018 was the most efficient during the last decade when the City achieved 18% budget savings, as a percentage of the refunding par.
Notes
In this report, tax receipts, with the exception of personal income tax, are gross of refunds. Real property tax and personal income tax are gross of any debt service funding.
Note that totals may not equal sum of components due to rounding.
Cash Balances
April 2018 – June 2018 (4Q18)
At the close of 4Q18, the City’s unrestricted cash balance stood at $9.394 billion, virtually unchanged from the closing balance at the end of 4Q17. The 4Q18 average cash balance of $9.035 billion fell below the 4Q17 average by $363 million. As typical for this time of the year, expenditures exceeded receipts during the quarter, reducing the cash balance by $559 million.
The City’s practice is to dedicate any year-end budgetary surplus to a prepayment of the following year’s expenses. This year’s prepayment totaled $4.576 billion, compared to $4.169 billion at the end of FY17. The prepayment consisted of $1.902 billion of General Obligation (GO) debt service, $2.174 billion of Transitional Finance Authority (TFA) debt service, a $300 payment to the Retiree Health Benefits Trust Fund (RHBT) against retiree health costs for FY19, and $200 million of advance subsidy to Health + Hospitals (H + H). In addition to the prepayment, the City deposited $100 million into the RHBT above the amount required to cover retiree healthcare costs in FY19. Without prepayments, the City would have ended FY18 with $14.070 billion in cash-on-hand.
July 2017 – June 2018 (FY18)
FY18 was a volatile year for cash balances. The year began with $9.341 billion of cash-on-hand, $2.378 billion below last year’s figure. This was the lowest opening balance for the fiscal year since FY14. From mid-July through early December, cash balances fell precipitously, reaching $1.022 billion on December 4, 2017 – the lowest cash balance since FY10. However, cash balances recovered quickly at the end of December due to incoming real property and income tax receipts as New Yorkers rushed to prepay their taxes to beat the federal tax overhaul. Receipts remained strong for the remainder of FY18, rising 12.5% in 3Q18 and 6.5% in 4Q18. Overall, receipts exceeded expenditures by $52.7 million in FY18. In FY17, expenditures topped receipts by $2.378 billion. FY18 finished strong with $9.394 billion in cash. Once again, as in FY05-FY17, there was no need for the City to borrow short-term for operations.
Cash Receipts
April 2018 – June 2018 (4Q18)
Receipts at a Glance
Total receipts in 4Q18 were the highest 4Q inflows on record, up 6.5% versus a year ago, with capital reimbursements largely responsible for the increase. Net of reimbursements for capital expenditures, 4Q18 cash receipts rose 1.6% versus a year ago. Capital transfers in 4Q18 totaled $3.016 billion, versus $1.612 billion in 4Q18.
The City collected $17.2 billion in tax revenues for 4Q18, compared to $16.7 billion at the same time last year. During the quarter, general corporation tax and personal income tax increased 17.4% and 14.3%, respectively. Meanwhile, the real property tax, the City’s largest source of revenue, declined 1.9% and the unincorporated business tax fell 13.1%.
During 4Q18, the City received $5.8 billion in Federal and State aid, down 6.5% compared to 4Q17. The State delayed funding for Senior Colleges, and the payment originally scheduled to be remitted in June arrived in July, and was not counted in the 4Q18 total.
July 2017 – June 2018 (FY18)
Receipts at a Glance
During FY18, total cash receipts measured $101.796 billion, an increase of $5.7 billion from the previous year. Net of reimbursements for capital expenditures, FY18 cash receipts increased 3.8% versus a year ago.
The five largest sources of cash in FY18 accounted for 61% percent of total receipts in FY18. These sources were real property tax collections of $26.5 billion, or 26.1% of total receipts; personal income tax of $13.4 billion, or 13.2% of total receipts; NYS education aid of $10.2 billion, or 10% of total receipts; sales tax of $7.4 billion, or 7.3% of total receipts; and general corporation tax of $4.5 billion, or 4.4% of total receipts.
Tax collections for FY18 totaled $60.137 billion, an increase of 6.9% from the previous year. The largest percentage gains were in personal income tax (up 21.3%), and banking corporations tax revenues (up 20.5%). Real property tax receipts rose 3.4% or $866 million. Sales tax was up 6.3%. Mortgage and real property transfer taxes declined 4.6%, reflecting the slowdown in NYC’s housing market.
Selected Cash Receipts
During FY18, the City received $20.3 billion in Federal and State aid, compared to $21.4 billion in FY17, primarily due to timing in receipts. In FY18, Federal education aid was down 16.6% and NYS welfare aid was down 17.7%, on a year-over-year basis. NYS higher education aid declined a whopping 61.8%, because the State failed to send almost $800 million in Senior College funding to NYC in June.
Cash Expenditures (Including Capital)
April 2018 – June 2018 (4Q18)
Cash Expenditures at a Glance
At $30.053 billion, 4Q18 cash expenditures appear virtually unchanged compared to 4Q17. PS spending, which includes payroll, pensions, health plan, social security, and supplemental (union-related) welfare benefits, totaled $13.9 billion in 4Q18. Embedded in this number is the City’s FY18 payment to the NYC Retiree Health Benefits Trust (RHBT). This year’s payment to the RHBT equaled $1.995 billion, versus $2.258 billion in FY17 and $2.160 billion in FY16. For the fifth year in a row, the City also added funds into the RHBT above the amount required for FY18 pay-as-you-go retiree health benefits. This year’s additional contribution was $100 million, the same as last year. Medical assistance and public assistance were the fastest growing 4Q18 expenses, up 18.8% and 18.4%, respectively. All other social services spending, taken altogether, dropped 22.4%.
July 2017 – June 2018 (FY18)
Cash Expenditures at a Glance
Total expenditures, including capital expenditures, rose 3.4% versus a year ago, to a new record high of $101.744 billion. Net cash expenditures (which exclude capital expenditures) rose 3% in FY18. Personal service expenditures increased 2.7% versus a year ago. Gross payroll increased 3.6% and spending on fringe benefits rose 1.3%. Meanwhile, other-than-personal-service expenditures (OTPS) increased 2.4% versus a year ago, mostly due to an $828 million increase in spending on public and medical assistance. Outlays considered “All Other” increased 7.1%, due to increased City-funded capital spending and the inflow of cash to the restricted Fund 700 account.
Certain bookkeeping procedures within the City’s financial management system serve as a mechanism through which City agencies give notice of upcoming expenditures or of funds held in trust on behalf of non-City entities. Such entries are collectively captured in the Fund 700 adjustment and are deducted from our calculation of the unrestricted cash balance. As the City’s business proceeds throughout the year, the Fund 700 adjustment may be reflected as a positive expense (more cash excluded from the unrestricted balance) or as a negative expense (as previously disclosed Fund 700 obligations are satisfied). In FY18 the Fund 700 adjustment was reflected as a positive expense, and it reduced the unrestricted cash balance by $113 million.
Meanwhile, in FY17, the Fund 700 adjustment was reflected as a negative expense, and it increased the unrestricted cash balance by $469 million.
Capital Expenditures
April – June 2018 (4Q18)
CapEx totaled $1.807 billion in 4Q18, up 2.6% from $1.761 billion in 4Q17. City-funded CapEx increased 6.2% while Non-City-funded CapEx declined 21.6%.
Reimbursements for CapEx in 4Q18 exceeded reimbursable expenditures, increasing the cash balance by $1.354 billion.
July 2017 – June 2018 (FY18)
Total CapEx equaled $8.779 billion in FY18, up 7.0% from $8.201 billion in FY17. The City-funded component increased 17.6% while the Non-City-funded component declined 44.4%.
FY18 reimbursements for CapEx totaled $9.996 billion and accounted for 9.8% of total cash receipts. Reimbursements during the fiscal year exceeded reimbursable expenditures, increasing the cash balance by $1.727 billion. Over time, reimbursements and CapEx should offset each other.
Financings
Two new money transactions closed in 4Q18. The first was a GO sale of $850 million of tax-exempt fixed rate bonds and $250 million of taxable fixed rate bonds. The second transaction was a TFA sale of $850 million of tax-exempt fixed rate bonds, $250 million of taxable fixed rate bonds, and $175 million of tax-exempt variable rate bonds.
In FY18 New York City and the TFA issued a combined total of $10.8 billion in new money and refunding bonds, compared to $8.4 billion in FY17. In FY18 the City refinanced $3.4 billion in GO and TFA bonds, compared to $1.7 billion in FY17.
FY18 refundings produced $613 million in budget relief over the life of the bonds, or $571 million on a present value basis. The refunding activity in FYs 2016 and 2018 was the most efficient during the last decade when the City achieved 18% budget savings, as a percentage of the refunding par.
Endnotes
[1] The data in this report are based on the book balances in the New York City Central Treasury as calculated by the Bureau of Financial Analysis, Office of the New York City Comptroller. Receipts are reported based on cash receipts and the analysis of bank deposits. Expenditures are reported on warrants issued. Receipts and expenditures are net of debt service and funding for RANs and TANs.
[2] City-funded capital expenditures are primarily financed from the proceeds of General Obligation (GO), New York City Transitional Finance Authority (TFA), and New York City Municipal Water Finance Authority (NY Water) debt. Capital expenditures are initially paid from the General Fund and then reimbursed from various capital accounts and State sources.
[3] In this report, tax receipts, with the exception of personal income tax, are gross of refunds. Real property tax and personal income tax are gross of debt service funding.
Prepared by Irina Livshits, Division Chief
Andrew Rosenthal, Analyst; Michele Griffin, Analyst; and Alex Huang, Analyst
Published by the NYC Comptroller’s Office, Bureau of Budget
Preston Niblack, Deputy Comptroller for Budget
Daily Cash Balances in the NYC Central Treasury ($ in Millions)
Cash Position in the NYC Central Treasury
($ in Millions)
a. Opening balances are before City audits.
b. Total expenditures include capital expenditures.
($ in Billions)