The debt of the City of New York (the “City”) is used to fund the capital maintenance and upkeep of an infrastructure that serves not just 8.8 million City residents but also hundreds of thousands of daily commuters and millions of tourists each year. Infrastructure spending is vital, but due to the City’s enormous and complicated infrastructure, it is costly.
The City’s debt, excluding that of the New York City Municipal Water Finance Authority, has increased by 138 percent from $39.55 billion in FY 2000 to $94.22 billion in FY 2021. Over the same time period, personal income in New York City increased by 139 percent, but local tax receipts increased by 192 percent.
The city issues debt directly or through a number of public benefit corporations or bodies on behalf of the city. In accordance with Section 232 of the City Charter, this report evaluates the debt situation of the City of New York. The Comptroller is required under the Charter to report the amount of debt the City may incur for capital projects in the current fiscal year and the three fiscal years following it.
The City may only issue long-term debt for capital purposes (assets with useful lives of at least three years for certain technology purposes or five years or greater for other purposes, and a value equal to or greater than $50,000, as defined in Comptroller’s Office Directive #10), to finance certain pollution remediation costs, and to provide capital grants to other entities such as the Metropolitan Transportation Authority (MTA).
Despite its size, the amount of outstanding City debt calculated against the City’s debt ceiling for the current year is substantially below the City’s statutory debt-incurring power. According to the New York State Constitution, the general debt ceiling for New York City is 10% of the five-year rolling average of the whole value of taxable City real property. The City’s general debt-incurring power, which was $127.35 billion in fiscal year 2022, is expected to rise to $130.89 billion in fiscal year 2023, $133.94 billion in fiscal year 2024, and $136.72 billion in fiscal year 2025.
As of July 1, 2021, the City’s outstanding debt that is counted against the debt ceiling totaled $79.65 billion, leaving the City with a net debt-incurring power of $47.70 billion. As stated in Table 1 on page 7, the total outstanding debt includes $36.31 billion in net General Obligation (GO) debt, $27.62 billion in NYC Transitional Finance Authority (TFA) debt over its statutory base of $13.5 billion, and $15.73 billion in contract and other liabilities. The City’s overall debt is predicted to increase by 40% to $111.76 billion by the beginning of FY 2025. Based on predicted growth of the whole market value of taxable real property, the City’s remaining estimated debt-incurring capacity of $42.75 billion as of July 1, 2022 will drop to $33.94 billion on July 1, 2023, and $24.96 billion on July 1, 2024. Over the next ten years, little over 47 percent of outstanding GO and TFA debt is set to mature.
The City’s projected capital obligations and the associated finance to sustain capital spending under these commitments are used to calculate indebtedness. In FY 2021, actual commitments totaled $10.05 billion, up little under $2.0 billion from FY 2020. The management of the COVID-19 epidemic will likely have an impact on future capital contracting activities.
Other than the City, certain entities issue debt to fund capital programs for the city. The City may pay a portion of these debts, but they are not included in the City’s statutory debt limit. Debt issued by the New York City Municipal Water Finance Authority (NYW), which is backed by water and sewer system revenues, provides additional money for the City’s Capital Plan.
All three debt load indices have improved during the last two decades. New York City’s debt service as a percentage of local tax receipts has declined from 17.2 percent in FY 2002 to 10.7 percent in FY 2020 and 9.7 percent in FY 2021. Furthermore, debt outstanding as a percentage of total NYC personal income has improved to 14.0 percent in FY 2020, with an estimate of 12.9 percent for FY 2021, after averaging 15.2 percent between FY 2002 and FY 2019. In FY 2021, debt outstanding as a percentage of taxable assessed value was 32.3 percent, down from 42.2 percent on average from FY 2002 to FY 2020.
New York City’s per capita debt burden in FY 2020 was around twice that of other large U.S. cities. Among the cities reviewed in this research, New York City has obligations that are dispersed more extensively among states, counties, unified school districts, public improvement districts, and public authorities in other cities. New York City is well above the averages of comparable cities and counties in two measures of debt burden that factor in a locality’s taxable base, in part because of this. In FY 2020, New York City’s outstanding debt as a proportion of total real estate value was 7.2 percent. This is more than double the national average of 3.3 percent for comparable cities. San Antonio came in second with a 7.0 percent share, followed by Phoenix with a 5.1 percent share. In FY 2020, New York City’s debt per capita as a percentage of personal income per capita was 13.9 percent, more than twice the national average. The next greatest debt-to-personal-income ratios were in San Antonio and Houston, at 12.7 and 10.8 percent, respectively, while Boston had the lowest debt-to-personal-income ratio, at 2.3 percent.
Despite the fact that New York City has a lot of debt, its credit rating is still good. The City’s GO credit rating was cut by two rating agencies in FY 2021. In October 2020, Moody’s downgraded its rating from Aa1 to Aa2, while Fitch downgraded its rating from AA to AA- in December 2020. The three main rating agencies all had negative outlooks on the City’s GO debt long-term ratings in December 2020. All three rating agencies had upgraded their outlooks to stable by the end of August 2021.
How much is NYC in debt?
New York’s state debt was estimated to be over 152.8 billion dollars in the fiscal year 2020. This is expected to rise to 179.82 billion US dollars by the fiscal year 2026.
Does New York City have debt?
As the city grapples with crime, its debt mounts. The financial situation in New York City is precarious.
The debt is so large that each taxpayer owes $85,400, despite the fact that the national debt per taxpayer is roughly $225,000.
According to Truth in Accounting, a non-profit research tank that studies government finances at the local, state, and federal levels, this is the case. Their most recent study looked at the ten most populous cities and how their debt affects local taxpayers.
The figure of $85,400 is startling because ordinary folks could never pay off such a large national debt. Nonetheless, the gravy train in New York keeps rolling…
Both the state and city’s credit ratings were cut by Moody’s Investors Service in October, while Fitch Ratings downgraded the city’s bond rating and assigned a negative outlook in December.
This comes as violent crime has increased: according to NYPD crime statistics, there has been a 22 percent increase in violent crime since May 2020, and shootings have increased by 73 percent in the last year.
New York City is edging closer to bankruptcy, with tourists afraid of being shot while shopping in Times Square.
How is New York City economy?
New York’s GDP is expected to reach $1.7 trillion in 2020, making it one of the world’s greatest economies. Financial services, healthcare, professional and commercial services, retail commerce, manufacturing, and education are among the most important industries in New York.
How much is America in debt?
The total national debt due by the federal government of the United States to Treasury security holders is known as the US national debt. The national debt is the face value of all outstanding Treasury securities issued by the Treasury and other federal government agencies at any one moment. The terms “national deficit” and “national surplus” normally relate to the federal government’s annual budget balance, not the total amount of debt owed. In a deficit year, the national debt rises because the government must borrow money to cover the gap, whereas in a surplus year, the debt falls because more money is received than spent, allowing the government to reduce the debt by purchasing Treasury securities. Government debt rises as a result of government spending and falls as a result of tax or other revenue, both of which fluctuate throughout the fiscal year. The gross national debt is made up of two parts:
- “Public debt” refers to Treasury securities held by people, corporations, the Federal Reserve, and foreign, state, and local governments, as well as those held by the federal government.
- Non-marketable Treasury securities held in accounts of federal government programs, such as the Social Security Trust Fund, are referred to as “debt held by government accounts” or “intragovernmental debt.” Debt held by government accounts is the result of various government programs’ cumulative surpluses, including interest earnings, being invested in Treasury securities.
Historically, the federal government’s debt as a percentage of GDP has risen during wars and recessions, then fallen afterward. The debt-to-GDP ratio may fall as a consequence of a government surplus or as a result of GDP growth and inflation. For example, public debt as a percentage of GDP peaked just after WWII (113 percent of GDP in 1945), then declined steadily over the next 35 years. Aging demographics and rising healthcare expenditures have raised concerns about the federal government’s economic policies’ long-term viability in recent decades. The United States debt ceiling limits the total amount of money Treasury can borrow.
The public held $20.83 trillion in federal debt, while intragovernmental holdings were $5.88 trillion, for a total national debt of $26.70 trillion as of August 31, 2020. Debt held by the public was around 99.3% of GDP at the end of 2020, with foreigners owning approximately 37% of this public debt. The United States has the world’s greatest external debt, with a debt-to-GDP ratio of 43rd out of 207 countries and territories in 2017. Foreign countries held $7.04 trillion worth of US Treasury securities in June 2020, up from $6.63 trillion in June 2019. According to a 2018 assessment by the Congressional Budget Office (CBO), public debt would reach approximately 100% of GDP by 2028, possibly more if current policies are prolonged past their expiration dates.
The federal government spent trillions on virus help and economic relief during the COVID-19 pandemic. According to the CBO, the budget deficit in fiscal year 2020 will be $3.3 trillion, or 16 percent of GDP, which is more than quadruple the deficit in fiscal year 2019 and the highest as a percentage of GDP since 1945.
When was New York City the worst?
As the crack epidemic grew in the 1980s and early 1990s, crime rates in New York City soared, but fell from 1991 to 2018, giving the city one of the lowest crime rates among large cities in the United States.
In a significant effort to reduce crime in the 1990s, the New York City Police Department (NYPD) implemented CompStat, broken windows policing, and other methods. The city’s substantial decrease in crime has been linked to a variety of factors, including the end of the crack epidemic, an increase in incarceration rate, and a decrease in childhood lead poisoning.
The Economist ranked New York City as the 15th safest city overall and the 30th safest for personal safety in a 2019 ranking of 50 cities around the world. There were 289 homicides in 2018, the lowest amount since 1951. In New York City, homicides increased in 2020, but they remained lower than in any year between 1960 and 2011.
Is New Jersey in debt?
New Jersey’s state debt was estimated to be around 62.48 billion dollars in the fiscal year 2020. This is expected to rise to over 72.92 billion dollars by the fiscal year 2026.
Texas
Texas has the least amount of debt of any state in the United States. Alaska’s total liabilities are $222.64 billion, while its total assets are $356.01 billion, giving Texas the country’s highest net position of $115.08 billion. Texas has a debt-to-income ratio of 62.5 percent.
Florida
The state of Florida has the second-lowest debt in the country. Florida’s net position is $97.6 billion, with total liabilities being $66.78 billion and total assets totaling $163.24 billion. This equates to a debt-to-income ratio of 40.9 percent for Florida. While Florida’s debt has been declining in recent years, it is likely to rise in the coming two years.
Alaska
With a net worth of $76.74 billion, Alaska has the third-lowest debt and the third-highest net position. Alaska has a total liability of $12.65 billion and a total asset value of $89.17 billion. Although Alaska does not have a state income tax, taxes on oil and gas production provide a significant portion of the state’s revenue.
North Carolina
North Carolina has the fourth-highest net position in the United States, with $54.41 billion. North Carolina’s assets have increased by $78.67 billion. Its total liabilities are $23.62 billion, resulting in a debt-to-equity ratio of 30%.
Tennessee
Tennessee has the fifth-lowest debt in the US, with total liabilities of $8.04 billion and total assets of $46.54 billion, resulting in a net position of $39.3 billion and a debt ratio of 17.3 percent. Tennessee is one of the most tax-friendly states in the US, and by 2021, it will be tax-free. Tennessee has managed to quadruple its Rainy Day Fund and deliver tax cuts to its inhabitants, including a 30% reduction in the in-state sales tax on groceries, while staying debt-free and low-tax.
What states are financially in trouble?
According to a survey performed by the Rand Corporation, nearly one-third (31%) of adults with household incomes between $25,000 and $124,999 are earning less as a result of the pandemic. 27 percent of this population is encountering financial difficulties.
Some states are doing better financially than others, and their inhabitants are benefiting from it. Many of the hardest-hit states were already deeply in debt before 2020, and the pandemic has simply exacerbated the situation.
Truth in Accounting’s “Financial State of the States 2020” assessment assesses states based on their fiscal health. Here’s a look at the states that did the poorest, based on fiscal year 2019 comprehensive annual financial reports, with extra data from the US Census Bureau. See which states’ inhabitants are having financial difficulties.
What causes the most debt in America?
Despite recent declines, Americans still have a lot of debt, which may be divided into three categories: credit card debt, vehicle loans, and school loans.
Why is New York City so rich?
The economy of New York City includes the country’s major municipal and regional economies. New York City, which is anchored by Wall Street in Lower Manhattan, has been dubbed the world’s top financial center. The New York Stock Exchange (NYSE) and the New York Stock Exchange (NASDAQ) are the world’s two largest stock exchanges in terms of market capitalization and trading volume. With a population of 20.3 million people, the New York metropolitan area generated a gross metropolitan product (GMP) of over US$1.33 trillion in 2012. The GMP of the Combined Statistical Area was over US$1.55 trillion. Both are ranked #1 in the country by a considerable margin, with GDPs almost similar to South Korea’s GDP but having less than half the population. The city’s economy is responsible for the majority of economic activity in both New York and New Jersey.
Manhattan is the world’s most important financial, banking, and communication center. On Wall Street, it houses the New York Stock Exchange (NYSE). Manhattan is home to many of the world’s most powerful corporations. In 2015, the borough had approximately 500 million square feet (46.5 million m2) of commercial space, making it the country’s largest office market. Midtown Manhattan is the world’s largest central business area, with almost 400 million square feet (37.2 million m2) in the same year. New York City is known for having a large concentration of sophisticated service sector organizations in the industries of law, accounting, banking, and management consulting. It is the world’s most important center for the advertising industry, and it is known as “Madison Avenue.” Silicon Alley, the name given to New York’s broad-spectrum high-tech industry, is still growing.
The economy of New York City is built on finance, high technology, real estate, insurance, and health care. The city is also the nation’s most important center for journalism, publishing, and mass media. It is also the country’s most important arts center. Digital media, advertising, fashion, design, and architecture are among the fastest-growing industries in terms of employment. In several businesses, New York City has a significant competitive advantage. Manufacturing is still important, despite its decline.
How much does NYC contribute to US economy?
According to the US Bureau of Economic Analysis, a state’s Gross Domestic Product (GDP) is the value of production emanating from all industries in the state. In the year 2017:
- With real GDP growth of 1.1 percent from 2016, the state ranks 34th in the country, less than half of the national rise. With 4.4 percent, Washington was first among the states.
- The financial activities sector accounted for little more than 29% of the state’s actual GDP. Professional and commercial services, as well as transportation, trade, and utilities, account for 27.2 percent of the total.