Upgrade Affirms the Administration’s Strong Fiscal Management, City’s Strong Job Growth, Budget Oversight and Transparency, and Increased Ability to Withstand Economic and Fiscal Headwinds
New York City Comptroller Brad Lander and New York City Mayor Eric Adams hailed Fitch Ratings for upgrading the city’s bond rating to AA from AA-. The upward revision comes just one year into their terms and reflects the administration’s strong fiscal management, which has placed the city in a significantly stronger position to weather future economic storms. The rating agency also highlighted that the city has now recovered 90 percent of jobs lost due to the COVID-19 pandemic, driven by substantial growth in 2022, and that the city has resumed its role as a leading international and domestic tourist destination.
“New York City stands on solid financial footing coming out of the pandemic, thanks to the vibrancy and resiliency of our economy and the support of federal aid. Fitch Ratings’ upgrade of their credit rating on our General Obligation bonds recognizes the strong steps the City of New York has taken to shore up our reserves with the largest deposit yet in our rainy day fund, as well as our ‘exceptionally strong’ budget oversight and fiscal management. As we face uncertainty in the global economy in the coming months, the City of New York is well positioned to sustain services, invest in our infrastructure, and foster better shared economic opportunity for New Yorkers,” said Comptroller Lander.
“Since day one, fiscal discipline has been a hallmark of our administration,” said Mayor Adams. “Last year, Fitch Ratings raised our General Obligation Bond credit outlook in recognition of our strong fiscal management and the record reserves we have set aside, and, today, we’re proud to be announcing that they’re raising the rating because of the hard, but necessary choices this administration was willing to make. We will continue to build an equitable recovery and use taxpayer dollars wisely as we continue to ‘Get Stuff Done’ for New Yorkers across the city.”
Fitch praised the administration’s fiscal management, noting actions to increase reserves and achieve savings. Budget reserves are now a record $8.3 billion. Achieving savings is a priority of this administration, which is why the mayor implemented Program to Eliminate the Gap (PEG) initiatives in Fiscal Years 2022 (FY22) and 2023 (FY23), including a PEG initiative in the FY23 November Plan. Most recently, the Adams administration implemented savings measures in January’s Preliminary Budget which streamlined city operations and increased citywide savings since last June to more than $3 billion over FY23 and Fiscal Year 2024 (FY24). Fitch also commended the city’s success in controlling employee headcount as a means of managing spending and achieving savings.
Further, as rating agencies continue to elevate the importance of environmental sustainability and resiliency, Fitch noted the city’s substantial investment in environmental resiliency efforts, and having gone further than most coastal communities in its efforts to fight the impact of climate change. The Adams administration will reveal the expansion of its sustainability agenda in April 2023’s update to PlaNYC, which will include a new, first-of-its-kind climate budgeting process.
In January, Mayor Eric Adams released New York City’s $102.7 billion Preliminary Budget for Fiscal Year 2024. The budget reflects the mayor’s ongoing commitment to promoting an equitable recovery by making investments in affordable housing, keeping city streets clean, ensuring the safety of communities, and promoting a greener, healthier city. The Preliminary Budget also doubles down on Mayor Adams’ commitment to fiscal responsibility by spending limited city resources wisely amid the ongoing economic and fiscal challenges facing the city, state, and nation, and maintaining the city’s budget reserves at a record level of $8.3 billion.
The Mayor’s Office of Management and Budget (OMB) and the Comptroller’s Office jointly issue bonds to finance city infrastructure including the city’s roads and bridges, schools, water and sewer infrastructure, parks, libraries, and climate resiliency infrastructure. Since January 1, 2022, the city has sold $6.14 billion in refunding bonds, achieving $917 million in debt service savings in challenging bond markets. In October 2022, OMB and the Comptroller’s Office collaborated to issue New York City’s first social bonds, securing $400 million in financing for over 3,000 units of deeply affordable housing.
