Bond Sale Planned by City Amid Rising Standing on Wall Street Standing

News of a planned bond sale by New York City of nearly $680 million comes about a week following Fitch Ratings raising the city’s credit rating one level to AA — the third highest grade, reflecting the city’s improved finances. In early February, the city’s cash balance stood at $14.6 billion — double the amount at the same time a year earlier. Personal-income-tax revenue withheld from workers’ paychecks in January was almost 7% higher year-over-year, an indication that the city is still gaining from the strong labor market despite Wall Street bonus payments projected to decline 20%. However, the end of the pandemic boom on Wall Street amid the Federal Reserve’s aggressive interest-rate hikes has left “city officials projecting that personal-income-tax revenue will decline 8.5% this fiscal year and another 3% in the one beginning July 1.” In addition, the city could incur another $16.3 billion in cost over the next five years as labor contracts with the city employees are settled; and uncertainty remains on the long-term impact of remote work on future real estate tax revenue due to the typical 10-year commercial lease terms.