New York City Mayor Eric Adams on Tuesday highlighted recent affirmations of the city’s bond ratings based on strong fiscal management by four internationally-recognized, independent credit rating agencies — Moody’s Investors Service, S&P Global Ratings, Fitch Ratings, and Kroll Bond Rating Agency (KBRA).
Adams said maintaining a strong bond rating is “an indication of the city’s financial strength and encourages continued investment in the city’s bonds, which help support funding to build and maintain schools, streets, parks, and other critical infrastructure that spans the five boroughs.
“Moody’s, S&P, Fitch, and KBRA are all saying the same thing: this administration is making the right financial decisions today to ensure a better and stronger tomorrow for all New Yorkers,” said Mayor Adams. “Thanks to our proactive fiscal management, reductions in asylum seeker spending, and better-than-expected economic recovery, we have confronted our financial challenges and shown the world that New York City is back and open for business.
“While we must continue to responsibly manage our budget — and still need additional support from our partners at the state and federal level — today’s news is reason to take pride in our early decisions and make us cautiously optimistic about our financial future,” he added.
The mayor noted that Moody’s Investor Services was the first to reaffirm their assessment of the city’s bond rating last week, citing that their decision “reflects successful implementation of budget measures to help close budget gaps in the current and succeeding fiscal year primarily caused by the migrant crisis.”
The reaffirmation also cites that the city’s “stable outlook reflects continuing economic expansion and tax revenue growth, coupled with robust financial management, which is anticipated to help mitigate budget pressures from the migrant crisis and the end of pandemic era federal aid.”
In its ratings report, S&P wrote: “The stable outlook reflects our view of New York City’s relatively resilient economy, including its full recovery of jobs lost during the pandemic. In addition, the city benefits from a global presence and diversified employment in technology, health care, financial services, and arts and entertainment.
“We believe the city’s commitment to build reserves to a level that exceeds the pre-pandemic amount on a sustained basis supports its credit fundamentals and helps position it to weather a shallower but more protracted national economic slowdown,” it added.
Fitch Ratings cited the city’s exceptionally strong budget monitoring and controls, supporting Fitch’s high assessment of operating performance.
It said the city experienced “strong recovery coming out of the pandemic, as well as improvement and reserve levels.”
KBRA wrote that the “city’s role as international business and cultural center commensurate with its status as the nation’s largest city, and position as the center of a large metropolitan economy” contributed to its rating assignment and went on to note that “institutionalized policies and procedures support financial stability.”
As a direct result of the administration’s “strong, proactive fiscal management and decisive action,” Adams said the administration achieved a record $6.6 billion in Program to Eliminate the Gap (PEG) savings over Fiscal Years (FY) 2024 and 2025 between the November Financial Plan and the Preliminary Budget.
He said this included $1.7 billion in asylum seeker PEG savings — a 20 percent cut — achieved over FY24 and FY25 by helping to put migrants on a path towards self-sufficiency with intensified case management and reducing the household per-diem costs of providing care.
The mayor said these actions helped balance the FY25 Preliminary Budget and stabilize the city’s financial position without layoffs, tax hikes, or major disruptions to city services — and their success, along with better-than-expected tax revenue growth, have allowed the administration to restore funding for initiatives that are mayoral priorities, including those related to public safety, quality of life, and young people.
Additionally, last week, as a result of the administration’s “responsible fiscal management,” Adams said he was able to cancel the FY25 Executive Budget PEG for city agencies, as well as move city agencies from a full hiring freeze to a 2-for-1 attrition/hiring model and ease other-than-personal spending freeze restrictions.
He said his administration is able to make these changes by further reducing asylum seeker costs by implementing an additional 10 percent PEG on budgeted city-funded asylum seeker costs over FY24 and FY25, while continuing intensive case work for migrants to help them on their path to self-sufficiency.
