NYC: $252 BILLION IN DEBT….Short-Term Goals for Long-Term Debt

Time to Prioritize Reducing the City’s Liabilities

By Ana Champeny and Maria Doulis
(Citizens Budget Commission)

NEW YORK, NY, September 18, 2018 – Most New Yorkers are familiar with debt. They may have mortgages, student loans, or a credit card balance. This household debt is manageable as long as one has a strategy and the resources to make the required payments. The City of New York also has long-term debts: for capital projects and for health and pension benefits for municipal employees and retirees. These liabilities totaled $252.5 billion at the end of fiscal year 2017—approximately $81,100 per household. Despite robust economic growth, the City has neither meaningfully reduced these debts nor made their reduction a fiscal priority.

Long-Term Liabilities Are Growing Very Rapidly: Now $81,100 Per Household. Long-term liability is an accounting term denoting the value of a commitment to make payments in the future. For example, when issuing a bond to raise capital for the construction of a school or the renovation of a park, a local government agrees to repay the principal with interest over a long time frame. The total value of principal and interest payments creates a long-term liability that is recognized in the local government’s books. Like most state and local governments, the City both incurs new liabilities and reduces or eliminates existing liabilities each year.

At the end of fiscal year 2017, the most recent year for which audited financial statements are available, New York City’s long-term liabilities were $252.5 billion, consisting of $107.8 billion in bonded debt; $88.4 billion for other postemployment benefits (OPEB), mostly for retiree health benefits; and $56.2 billion for pension benefits.¹(see Figure 1). Long-term liabilities are up from $237.2 billion in fiscal year 2014.

Bonded Debt

The liability for bonded debt largely reflects borrowing for capital investment. The length of the bonds is tied to the expected useful life of the assets that are purchased, built, or rehabilitated with the proceeds of the bonds. Repayment over a long time frame is appropriate since future New Yorkers benefit from today’s capital investments.

The City issues a variety of bonds. General obligation (GO) bonds are backed by the “full faith and credit” of the City and are repaid through general tax revenues. Bonds issued through the Transitional Finance Authority (TFA) are repaid by personal income tax revenues.² 

Capital investments for the water and sewer system are funded by bonds issued by the Municipal Water Finance Authority (MWFA), which are paid through water and sewer charges levied on property owners. More than $100 billion in bonded debt issued by these entities was outstanding at the end of fiscal year 2017, up from $96.4 billion at the end of fiscal year 2014.³(see Figure 2).

Conduit debt for facilities being built or maintained on the City’s behalf, such as the New York City Education Construction Fund, as well as the bonded debt of the Hudson Yards Infrastructure Corporation, totaled $4.1 billion, representing 3.8 percent of outstanding bonded debt in fiscal year 2017.⁴

The City also has bonded debt stemming from past imprudent fiscal decisions. The Sales Tax Asset Receivable Corporation (STARC) was created in 2003 by the State to offer operating aid to the City by refinancing and stretching debt related to the city’s 1975 fiscal crisis.⁵ The bonds are repaid with State sales tax revenue.

The Tobacco Settlement Asset Securitization Corporation (TSASC) was established to securitize revenues from settlements with the tobacco industry.⁶ STARC and TSASC bonded debt has been declining; together, these liabilities totaled $3.0 billion in fiscal year 2017, down from $3.2 billion in fiscal year 2014.

Overall, total bonded debt increased by $3.7 billion from fiscal year 2014 to 2017; however, bonded debt is expected to grow 22 percent in coming years to support a record level of capital spending. Unlike some large state governments with significant capital improvement plans, the City finances capital spending exclusively through borrowing.⁷ Between fiscal years 2014 and 2017, the City committed $30.4 billion in City funds to capital projects. Commitments grew 73 percent, from $5.7 billion in fiscal year 2014 to $9.9 billion in fiscal year 2017. Between fiscal years 2019 to 2022 the City projects an additional $59.3 billion in City-funded capital commitments, which will increase debt outstanding to $135.8 billion by fiscal year 2022.

Comparisons of bonded debt are difficult to make between jurisdictions due to significant variation in the scope of responsibilities undertaken directly by municipal governments. An analysis by the New York City Comptroller found New York City’s 2016 debt burden was $9,782 per resident, compared to an average of $4,687 for 11 other cities, ranging from $2,096 in Boston to $6,894 in Chicago.⁸ On two other metrics of bonded debt burden—outstanding debt as a share of the value of real property and per capita bonded debt as a share of per capita personal income—New York City was also the highest.⁹

Other Postemployment Benefits

OPEB liabilities reflect the City’s agreement to provide health insurance and other related benefits (not including pensions) to municipal retirees. Retirees with at least 10 years of service receive health insurance with no requisite premium contribution. Once eligible for Medicare, retirees, regardless of income level, receive full reimbursement of Medicare Part B premiums. The City also makes welfare fund contributions for many retirees; welfare funds are administered by unions and most commonly provide supplemental benefits such as prescription drug, vision, and dental coverage.¹⁰

The City’s total OPEB liability in fiscal year 2017 is $93.1 billion; only 5 percent of this liability has been funded, yielding an unfunded liability of $88.4 billion. OPEB liability is actuarially calculated using assumptions about service, retirement age, mortality, and health insurance premium growth, among other factors. The City Actuary also calculates the annual payment necessary to keep up with the growth in liability, but the City does not make payments on this basis. Rather, retiree health bills are paid as they come due; in fiscal year 2017, this amounted to $2.3 billion from the City’s annual budget–far lower than the $6.9 billion the actuary determined was needed that year to meet commitments to both current and future retirees.¹¹

In fiscal year 2006 the City established the Retiree Health Benefits Trust Fund (RHBT) to begin to amass resources to fund the substantial OPEB liability. Since fiscal year 2014, the de Blasio Administration has contributed $2.5 billion to the fund, bringing its total assets to $4.4 billion; however, these deposits have not been guided by a strategy or policy to tackle the OPEB liability, but by a desire to set aside resources to be tapped during an economic downturn.

Indeed, the fund, which previously amassed $3.2 billion in fiscal year 2008, was almost depleted between fiscal years 2009 and 2013. (Our animated video reviews this history.) Mayor Bill de Blasio, like his predecessor Mayor Michael Bloomberg, has been clear that the assets of the fund function as a rainy day fund that may be tapped to stabilize the city’s finances.¹²

The city’s unfunded liability is much greater than that of other large cities: in 2016, it was $126,000 per member compared to $112,800 in Boston, $105,000 in San Francisco, and $24,600 in Chicago. Of eight comparative cities, only Los Angeles had a higher value, $141,000.¹³ In addition to the lack of systematic funding, the relative generosity of the benefits drives the magnitude of the unfunded liability.

Health benefits for early retirees are rarely offered by private sector employers; in the public sector, state and local governments that offer coverage often limit eligibility and/or require significant retiree premium sharing. For retirees on Medicare Part B, premium reimbursement is mostly unavailable or highly limited; a 2013 CBC study comparing New York City to the federal government, New York State, Chicago, Los Angeles, San Francisco, Boston, Phoenix and Houston found none of the other jurisdictions reimbursed the full premium cost for retirees and spouses.¹⁴

Pensions

The pension liability represents the actuarial estimate of providing defined benefit pensions through the City’s five pension funds: the New York City Employees’ Retirement System (NYCERS), the New York City Police Pension Fund (POLICE), the New York City Fire Pension Fund (FIRE), the Teachers’ Retirement System of the City of New York (TRS), and the New York City Board of Education Retirement System (BERS).

Civilian employees hired before April 1, 2012, which constitute the greatest share of the workforce, contribute three percent of gross wages for only the first 10 years of employment. They vest in the pension system after five years and are eligible for a full retirement benefit at age 57; with 30 years of service, they receive 60 percent of their three-year final average salary. Similarly, members of TRS receive 60 percent when retiring with 30 years of service at age 55 or older.

Civilian employees and TRS members hired since April 1, 2012 contribute between 3 percent and 6 percent based on wages for the entirety of employment. They vest after 10 years with a minimum retirement age of 63; with 30 years of service, they receive 55 percent of their three-year final average salary. Overtime earnings to be included in five-year final average salary are capped at $15,000 indexed to inflation.

Uniformed employees generally receive more generous retirement benefits. Those hired before July 1, 2009 can receive a retirement benefit of 50 percent of final average salary with 20 years of service, while those hired since then receive 50 percent of final average salary less 50 percent of their Social Security benefit at age 62 with 22 years of service. Overtime earnings are included in the calculation of final average salary, and uniformed service retirees receive an additional Variable Supplement Fund (VSF) payment of $12,000 annually.¹⁵ Uniformed employees who receive a disability pension receive more generous benefits, but they are not eligible to receive the VSF payment.¹⁶

In fiscal year 2017 the Chief Actuary estimated the City’s cumulative pension liability at $195.1 billion.¹⁷ However, unlike OPEB, the City has been making payments on an actuarial basis for decades, and as a result, this liability is 71.2 percent funded, leaving an unfunded liability of $56.2 billion.¹⁸

One commonly used benchmark of a well-funded pension system is 80 percent. While only 32 percent of the largest public pension funds in the United States met that goal in 2017, the City’s pension funds are less well positioned than those of New York State, which reports a State fiscal year 2017 funding ratio of 94.7 percent for the Employees’ Retirement System and 93.5 percent for the Police and Fire Retirement System.¹⁹

Legacy Costs Claim More than 20 Percent of the Budget

A substantial portion of the City’s annual operating budget is devoted to paying these liabilities: more than $1 in $5 dollars annually is for “legacy costs” that pay for these commitments through debt service, budget contributions to the pension funds, and retiree health benefit payments. In fiscal year 2019, legacy costs are expected to reach $19.3 billion, or 21.1 percent of total expenditures.²⁰ (See Figure 3.) Debt service is $7.0 billion, retiree health benefits are $2.5 billion, and pension contributions are $9.9 billion.

By fiscal year 2022, legacy costs are projected to reach $21.9 billion or 22.7 percent of total expenditures. Pension contributions are projected to increase 5 percent and reach $10.4 billion in fiscal year 2022.  Retiree health benefits and debt service are forecast to grow more rapidly, to 18.9 percent and to 22.5 percent, respectively. Retiree health benefits will reach $3.0 billion and debt service is projected to climb to $8.6 billion.

Cause for Concern: Comprehensive Strategy Needed

A thriving economy and growing tax base have supported rising legacy costs in the operating budget. From fiscal years 2014 to 2017, tax revenues have grown 13.0 percent, allowing the city to simultaneously pay these expenses and expand spending on other priorities. But the City has not used the opportunity presented by robust tax revenue growth to develop and execute strategies to reduce meaningfully bonded debt and OPEB liabilities.

A plan to fully fund the pension systems was approved and implemented by the City’s Actuary in fiscal year 2012. This plan depends on ever-increasing amounts from the budget, particularly if the investment performance of the pension funds fails to achieve the 7 percent target. The City continues to make the requisite payments.

In contrast, no strategy has been advanced to reduce the OPEB liability, to fund the liability actuarially, or to protect the RHBT so that it can grow meaningfully and provide a steady source of funding similar to the pension funds.²¹ While Mayor de Blasio deserves credit for increasing the RHBT size to record levels, the fund is not governed by a policy that mandates deposits or limits withdrawals.²² Rather, Administration officials have been clear that the fund is viewed as part of the City’s general budget reserves to be used in times of fiscal stress.

Capital spending has reached record levels, surpassing $10 billion in committed work in fiscal year 2018. The Administration does not consider increased debt service to support this investment as a problem since debt service levels are not projected to surpass 15 percent of tax revenues over the next 10 years. None of the City’s surplus revenues have been allocated to pay-as-you-go (PAYGO) funding of capital projects.

While the Mayor may not be worried, the magnitude of the liabilities and their large claim on city resources are consistently cited as concerns by rating agencies and keep the City from attaining the highest rating possible on GO debt.²³ In April 2018 Fitch wrote: “Debt, pensions, and OPEB liabilities are all large even relative to the city’s vast resource base, and the long-term liability burden assessment reflects debt and pension liabilities…equal to about 28% of the city’s personal income.”²⁴

Similarly, Moody’s stressed the budgetary challenge: “Even with strong budgetary controls, growth in costs for debt service, pensions and retiree health care will continue to be a challenge for the city.”²⁵ Standard and Poor’s cited “the lack of a plan to sufficiently address the OPEB” as a credit weakness, a concern echoed by the members of the Financial Control Board.²⁶

Using a single rating agency as an example is a helpful way to see how these liabilities affect the rating of a bond series—something akin to a credit score—which ultimately affects the City’s cost of borrowing. The highest rating Fitch assigns is AAA, followed by AA and then A. Overall, the City’s GO debt is rated AA by Fitch, but the City’s measures on long-term liabilities fall into the A range. According to Fitch, the City’s “carrying cost” (ongoing expense) for debt service, pensions, and OPEB is 21 percent, which puts it at an A rating (below 20 percent would be AA and below 10 percent would be AAA). Similarly, the long-term liability burden measured as direct debt plus net pension liability as a share of personal income is estimated at 28 percent, also associated with an A rating (the burden would need to be below 10 percent for AAA). Other factors are similarly reviewed and the composite picture is used to assign a final rating to each bond series.

Recommendations

New Yorkers know that when times are good, it is prudent to save and to pay down their debts. While the Mayor and the City Council tout annual budget savings, they are silent on the need to pay down the City’s liabilities. More can and should be done to chart a course for long-term fiscal stability while the economy remains strong.

Bonded Debt

Critical investments in infrastructure are needed to ensure the City’s vibrancy and competitiveness; however, the capital plan is “unrealistic in ambition, obscures priorities, and discourages accountability.²⁷ New bonded debt should be limited by implementing a more realistic capital plan developed around specific priorities and predominantly focused on repairing critical infrastructure, ensuring safety, and expanding where investments make economic sense or can improve critical services.

In addition, current year resources should be used to pay for part of the City’s capital investment.  For several years, the operating budget has included a dedicated $250 million “capital reserve.” It was intended as a hedge against rising debt service costs, but the City’s interest rate assumptions have always been conservative and the funds have been rolled into the following year. Instead, these funds should be used as PAYGO capital to reduce the borrowing needed each year to finance the capital plan.

Other Postemployment Benefits

Addressing the City’s substantial OPEB liability has two components: 1) a thoughtful reduction in benefits; and 2) a strategy to prefund the liability.

CBC addressed both components of OPEB reform in detail in the report, “The Price of Promises Made.” Read the full report here.

The generosity of retiree benefits provided relative to other public and private employers suggest the City can reduce these benefits without affecting its attractiveness as an employer. CBC recommends establishing a goal of cutting costs by 50 percent.²⁸ Possible actions include implementing premium sharing for retiree health insurance, eliminating reimbursement of Medicare Part B, and reducing contributions to welfare funds that provide supplementary services.²⁹Changes would require the cooperation of the Municipal Labor Committee and possibly changes to City statutes.

Enacting a strategy for prefunding requires developing a policy for deposits (and withdrawals) to the RHBT. Deposits to the fund should equal or exceed the current year PAYGO cost plus the annual service cost (the net present value of the accrued annual liability for current employees), which would be lowered as a result of benefit reductions. Resources in the RHBT could then be invested, like the pension funds; current RHBT assets earn virtually no interest.³⁰ Furthermore, withdrawals should be limited to paying annual costs, and the fund should not be treated as a rainy day fund.

Pensions

The City is on a path to fully funding the pension liability by 2034 and should maintain that commitment.

Enhancements to pension benefits, considered by the State Legislature annually, should be opposed. Furthermore, the City should advocate for legislative changes that focus on reducing the greatest cost drivers of benefits and risk factors to the funds. For example, the inclusion of all overtime hours worked in pension calculations for uniformed employees is unusual—even among other uniformed employees in New York—and boosts payments and the City’s liability significantly.  This provision, and others like it, should be amended for new employees since the State Constitution does not permit changes to benefits for current employees.

Similarly, CBC has pointed out that the fixed return Tax Deferred Annuity provided to teachers and school personnel is a unique and costly benefit that threatens the financial viability of the TRS. The City should seek legislation to change this benefit for all TRS members.

Conclusion

The City’s long-term liabilities are substantial, and paying the associated legacy costs is crowding out programmatic spending. Much like New Yorkers who trim their expenditures and establish plans to get out of debt, the City needs to develop a strategy to reduce long-term liabilities and keep legacy costs a manageable portion of the annual operating budget.

Footnotes

1. Debt, pensions, and other postemployment benefits are, by far, the three largest long-term liabilities. In fiscal year 2017 the City had an additional $21.7 billion in long-term liabilities for judgments and claims, bond premiums, accrued vacation and sick leave, capital leases, and other items. For a full list of the City’s long-term liabilities, excluding Municipal Water Finance Authority debt, see: City of New York, Office of the Comptroller, Comprehensive Annual Financial Report of the Comptroller for the Fiscal Year Ended June 30, 2017 (October 30, 2017),  101, https://comptroller.nyc.gov/wp-content/uploads/documents/CAFR2017.pdf.
2. TFA debt is also backed by sales tax revenues; to date personal income tax receipts have been sufficient to cover debt service payments.
3. Does not include TFA Building Aid Revenue Bonds (BARBs) and capital lease obligations. State aid is pledged to cover the debt service of BARBs.
4. For more information on conduit debt, see: City of New York, Office of the Comptroller, Fiscal Year 2018 Annual Report on Capital Debt and Obligations (December 1, 2017), pp. 12-13, https://comptroller.nyc.gov/wp-content/uploads/documents/FY2018_Annual_Report_on_Capital_Debt_and_Obligations.pdf.
5. At the time STARC was created, debt from the Municipal Assistance Corporation was scheduled to be fully paid off by 2008; the State refinanced the debt over a 30-year period. See: Charles Brecher and John Breit, “STARC Story: Why New York State Wants to Keep $600 Million of New York City’s Sales Tax Revenue,” Citizens Budget Commission Blog(March 16, 2016), https://cbcny.org/research/starc-story.
6. Many state and local governments opted to securitize tobacco settlement proceeds and use the revenue for capital rather than operating funding.
7. Maria Doulis, Planning After PLANYC: A Framework for Developing the City’s Next Capital Plan(Citizens Budget Commission, December 2013), pp. 18-19, https://cbcny.org/sites/default/files/media/files/Planning%20After%20PLANYC.pdf; and National Association of State Budget Officers, State Expenditure Report: Examining Fiscal 2015-2017 Spending (2017), pp. 81, 83, https://higherlogicdownload.s3.amazonaws.com/NASBO/9d2d2db1-c943-4f1b-b750-0fca152d64c2/UploadedImages/SER%20Archive/State_Expenditure_Report__Fiscal_2015-2017_-S.pdf.
8. The City Comptroller’s analysis excludes debt of the Municipal Water Finance Authority but includes TFA BARBs and capital lease obligations, valuing fiscal year 2016 outstanding debt at $83.6 billion (versus CBC’s valuation of  $104.3 billion). Data on other cities in the Comptroller’s report are drawn from tables of direct and overlapping debt in each municipality’s annual financial report. See: City of New York, Office of the Comptroller, Fiscal Year 2018 Annual Report on Capital Debt and Obligations (December 1, 2017), pp. 30-32, https://comptroller.nyc.gov/wp-content/uploads/documents/FY2018_Annual_Report_on_Capital_Debt_and_Obligations.pdf.
9. City of New York, Office of the Comptroller, Fiscal Year 2018 Annual Report on Capital Debt and Obligations (December 1, 2017), pp. 31-32, https://comptroller.nyc.gov/wp-content/uploads/documents/FY2018_Annual_Report_on_Capital_Debt_and_Obligations.pdf.
10. Courtney Wolf and Charles Brecher, Better Benefits from Our Billion Bucks: The Case for Reforming Municipal Union Welfare Funds(Citizens Budget Commission, August 2010), https://cbcny.org/sites/default/files/REPORT_UWF_08032010.pdf.
11. Annual cost is the sum of the annual service cost and the current year pay-as-you-go amount; excludes interest on unfunded liability. See: City of New York, Office of the Comptroller, Comprehensive Annual Financial Report of the Comptroller for the Fiscal Year Ended June 30, 2017 (October 30, 2017),  122, https://comptroller.nyc.gov/wp-content/uploads/documents/CAFR2017.pdf.
12. For example, in discussing reserves in the Fiscal Year 2019 Adopted Budget, Mayor de Blasio discussed the RHBT along with the General Reserve and the Capital Stabilization Reserve. See: City of New York, Transcript: Mayor de Blasio, Speaker Johnson Reach Early Handshake Agreement for Balanced FY19 Budget (June 11, 2018), https://www1.nyc.gov/office-of-the-mayor/news/291-18/transcript-mayor-de-blasio-speaker-johnson-reach-early-handshake-agreement-balanced-fy19.
13. Thad Calabrese, The Price of Promises Made: What the City Should Do About Its $95 Billion OPEB Debt(Citizens Budget Commission, October 25, 2017), p. 11, https://cbcny.org/sites/default/files/media/files/REPORT_OPEB_10252017_1.pdf.
14. Maria Doulis, Everybody’s Doing It: Health Insurance Premium Sharing by Employees and Retirees in the Public and Private Sectors(Citizens Budget Commission, January 2013), https://cbcny.org/research/everybodys-doing-it.>
15. Salary increases in any one year that exceed the average of the other years used in final average salary  calculation by more than 10 percent are excluded. While unlimited overtime compensation can be included in the calculation, these rules may prevent “spiking” of earnings in final years of employment to increase final average salaries.
16. For a more detailed description of contributions, eligibility, and pension benefits, see: New York City Employees’ Retirement System, Forms and Publications(accessed August 14, 2018), https://www.nycers.org/forms-and-publications; New York City Police Pension Fund, Summary Plan Description (accessed August 14, 2018), http://www.nyc.gov/html/nycppf/html/home/home.shtml; Teachers’ Retirement System of the City of New York, Brochures (accessed August 14, 2018), https://www.trsnyc.org/memberportal/Publications/brochures; and New York City Fire Pension Funds, Comprehensive Annual Financial Report for the Fiscal Years Ended June 30, 2017 and June 30, 2016, https://www1.nyc.gov/assets/fdny/downloads/pdf/about/fire-pension-fund-cafr.pdf.
17. NYCERS, TRS, and BERS are multiemployer plans, meaning that some of the membership is for non-City employers, including NYC Health + Hospitals and the New York City Housing Authority. The pension funds’ total liability, including non-City employers, is $234.5 billion.
18. There is variation in funding ratios between the individual funds, which range from a low of 61 percent in FIRE to a high of 81 percent in the BERS. See:City of New York, Office of the Comptroller, Comprehensive Annual Financial Report of the Comptroller for the Fiscal Year Ended June 30, 2017 (October 30, 2017),  145-146, https://comptroller.nyc.gov/wp-content/uploads/documents/CAFR2017.pdf.
19. Office of the New York State Comptroller, What Every Employer Should Know: About Employee Contribution Rates: Our Funded Ratio (accessed August 14, 2018), http://www.osc.state.ny.us/retire/employers/employer_partnership/contribution_rates/our_funded_ratio.php; and CBC staff analysis of data from the Center for Retirement Research at Boston College, Public Plans Database (accessed August 13, 2018), http://publicplansdata.org/public-plans-database/the-2018-data-update.
20. Total expenditures adjusted to reflect net impact of prepayments (the “surplus roll”) and to exclude interfund revenues and general and capital stabilization reserves.
21. The City has been identifying savings in its health insurance programs as part of an arrangement with the Municipal Labor Committee, but the predominant focus of that effort has been health insurance for employees.
22. One such proposal was put forth by Council Member Daniel Garodnick in February 2015. See: Samar Kurshid, “Eyeing Health Care Obligations, Garodnick Calls for More Responsible Budgeting,” Gotham Gazette(February 23, 2015), http://www.gothamgazette.com/government/5592-garodnick-calls-for-more-responsible-pension-budgeting.
23. GO debt is rated Aa2 by Moody’s and AA by Standard and Poor’s and Fitch. TFA and MWFA debt is generally more highly rated. See: City of New York, Office of the Comptroller, Fiscal Year 2018 Annual Report on Capital Debt and Obligations (December 1, 2017), p. 6, https://comptroller.nyc.gov/wp-content/uploads/documents/FY2018_Annual_Report_on_Capital_Debt_and_Obligations.pdf.
24. Fitch adjusts pension liabilities based on a 6 percent investment return rate to standardize liabilities across state and local governments. See: Fitch Ratings, Fitch Rates New York City, NY’s $1.1B GO Bonds ‘AA’; Outlook Stable (April 6, 2018),https://comptroller.nyc.gov/wp-content/uploads/2018/04/NYC-GO-2018F-Fitch-Report.pdf.
25. Moody’s Investors Services, Moody’s assigns Aa2 to $1.1B of NYC GO bonds; outlook stable(April 6, 2018), https://comptroller.nyc.gov/wp-content/uploads/2018/04/NYC-GO-2018F-Moodys-Report.pdf.
26. S&P Global Ratings, New York City; Appropriations; General Obligation; Joint Criteria; Liquidity Facility; Moral Obligation(April 6, 2018), https://comptroller.nyc.gov/wp-content/uploads/2018/04/NYC-GO-2018F-SP-Report.pdf; and Lawrence Golub, Member, New York State Financial Control Board, remarks given at a meeting of the New York State Financial Control Board (July 25, 2018).
27. Testimony of Sean Campion, Senior Research Associate, Citizens Budget Commission, before the New York City Council Committee on Finance and Subcommittee on Capital Budget, Testimony on the City of New York’s Capital Commitment Plan (March 20, 2018), https://cbcny.org/advocacy/testimony-city-new-yorks-capital-commitment-plan.
28. CBC recommends setting target reductions of 50 percent of the normal cost, the actuarially determined bill for the year, and the PAYGO cost—the amount in bills paid.
29. Thad Calabrese, The Price of Promises Made: What the City Should Do About Its $95 Billion OPEB Debt(Citizens Budget Commission, October 25, 2017), https://cbcny.org/sites/default/files/media/files/REPORT_OPEB_10252017_1.pdf.
30. In 2017 the RHBT earned $21.5 million on roughly $4.6 billion, or a rate of 0.5 percent. See: City of New York, Office of the Comptroller, Comprehensive Annual Financial Report of the Comptroller for the Fiscal Year Ended June 30, 2017 (October 30, 2017),  122, https://comptroller.nyc.gov/wp-content/uploads/documents/CAFR2017.pdf