Sunday, April 20, 2003
Copyright © Las Vegas Review-Journal

The $100,000 List

The number of government workers earning six-figure incomes quadruples in five years

Dr. William Zamboni is shown in a patient room at his Las Vegas practice . Zamboni, a plastic surgeon, is the head of surgery at the University of Nevada Medical School. Photo by K.M. Cannon. Tax opponent Dan Burdish believes six-figure paychecks are symptomatic of what ails government. Photo by Clint Karlsen.

The figure is jarring at first glance -- $590,000 -- enough to earn Dr. William Zamboni the title of Nevada's highest paid public employee for 2002.

The 44-year-old plastic surgeon heads the surgery program at the University of Nevada Medical School, but it was Zamboni's private practice that generated the greatest share of his income.

State government pays just 20 percent of the school's $120 million annual budget, forcing faculty members to produce much of the school's income by practicing medicine with the aid of third-year med students.

Zamboni and his students treat burn victims. They repair cleft palates. Perform breast augmentations and reductions.

Last year, he collected $1.3 million from his practice. After paying for rent, staffing and taxes he sent the remaining $250,000 to the medical school to help cover his department's $6 million budget.

In return, the state paid him a $140,000 academic salary plus $450,000 for his on-the-job training of young surgeons.

"They're taking money I've earned and paying me back," he said.

Zamboni the academic trained a new pool of young surgeons, while Zamboni the practitioner assumed many of the expenses typically paid by a state-run medical school.

"My cosmetic practice helps us survive as a department of surgery," Zamboni said. "The state funding for departments is insufficient."

The number of six-figure wage earners nearly quadrupled between 1997 and 2002 at 16 state, county and local government agencies in Nevada. No local governments outside of Clark County were included in the survey.

A total of 1,857 public employees were paid $100,000 or more last year, according to the findings of the public records review by the Review-Journal. That compared with 489 workers in 1997. The bulk of the workers -- 1,588 -- earned $100,000 to $150,000.

Officials from state and local government agencies provided computerized pay records for the 2002 fiscal year. State law requires the information be available for public review. The Review-Journal conducted a similar review in 1997.

The new survey defined pay as salary, overtime, longevity and bonus pay. Retirement contributions, health insurance coverage and expenses were not included.

Clark County and the Metropolitan Police Department included cash payments for banked vacation, sick time and disability pay. Other government agencies did not.

The state system of higher education employed the largest share of six-figure wage earners at 552, with 13 of the state's top 25 moneymakers teaching at Nevada's only medical school.

"We're talking about physicians. We're talking about a market-driven issue," said Dr. Stephen McFarlane, the medical school's dean.

Clark County government holds the No. 2 slot with 440 workers led by Fire Battalion Chief Chad Marshall, whose regular pay of $87,776 was boosted to $421,921, with most of the money coming from disability pay after Marshall suffered a job-related injury that forced his early retirement.

Three additional county firefighters received disability payments and were forced to retire, boosting their pay to more than $300,000 apiece.

"Those are individuals that have sustained injuries and will no longer be able to function on the Fire Department," lamented Clark County Fire Chief Earl Greene. "People think it's all just glory and fame. That is not the case."

Overall, 167 county firefighters earned between $100,000 and $150,000 with many receiving overtime and seniority-rewarding longevity pay.

The Metropolitan Police Department ranks third on the list with 224 employees.

Thirty-two-year veteran Greg Jolley led the way, receiving a one-time benefits cash out of $247,842, boosting the then-deputy chief's pay to $321,586. Nineteen other Police Department veterans, including then-deputy chief and current Sheriff Bill Young, received similar cash outs for banked vacation and sick time totaling between $34,979 and Jolley's payment. The department has limited the practice for new hires.

"Quite frankly if we had those kinds of benefits with the work force we have today it would bankrupt the city and the county," said Young, who received a one-time payment of $165,832 upon his retirement before running for sheriff. "What you're seeing today is 30-year veterans, 25-year veterans who had those things."

Overall, 218 Metropolitan Police Department employees earned $100,000 to $150,000 for the year. Their income was boosted by overtime.

The city of Las Vegas ranks fourth with 178 people earning at least $100,000. Deputy City Manager Steven Houchens was the city's top moneymaker at $160,758 that includes a $6,272 boost from longevity pay. A total of 175 city workers earned $100,000 to $150,000, with firefighters and corrections officers receiving substantial boosts from overtime pay.

Explanations are varied for the growth in six-figure paychecks. They include the 1990s economic boom that saw wages climb nationally, Southern Nevada's hyper-population growth from 950,000 in the mid-1990s to an estimated 1.6 million people today, unionization of county and local workers, a 16 percent inflation rate over the five-year period, competitive market forces, salary creep, the inertia of bureaucratic budget building, the need to recruit and retain good workers in competitive markets, wasteful bureaucratic spending and retirement cash outs and disability pay.

The findings come as Gov. Kenny Guinn and the Nevada Legislature are struggling with proposals to close a projected $700 million budget shortfall over the next two years. Employee pay is typically the largest expense for most governments, with workers garnering 70 percent to 80 percent of an agency's budget.

In 2002, Guinn ordered all state agencies to impose 5 percent budget cuts and freeze employee pay and hiring. Earlier this month, Clark County workers were granted pay increases of nearly 7 percent annually through June 2006, with County Manager Thom Riley agreeing to the move rather than submit the issue to an arbitrator. County workers are unionized. State workers are not.

Vicki Taylor, assistant to Henderson City Manager Phil Speight, argues it is challenging to fully grasp the meaning of the pay numbers.

"It would be easy to simply say 15 people in 1997 earned $100,000 or more and in 2002 that increased to 112, but that truly wouldn't reflect inflation, collective bargaining requirements, special situations (such as the constant staffing program), recouped costs, population-growth-driven demands (new fire stations, for example). The list goes on and on," Taylor wrote in an e-mail.

Rapid urbanization

The $100,000 paycheck poses a psychic tug on Americans with its imagery of big houses, sleek cars and the good life.

A Time magazine survey conducted during the 2000 election found that 19 percent of Americans think they are among the wealthiest 1 percent and an additional 20 percent say they expect to fill that category in the future. But there is something irksome to many when they learn of public employees making six figures.

"All I know is all the taxes I pay in here keep going up," said Jim Fasolini, a Las Vegas restaurant owner. "There shouldn't be that many ($100,000-plus earners) because the cost of living isn't as high here as other areas."

While private sector pay averaged $32,198 in Nevada in 2001, public sector pay averaged $40,054, according to the Nevada Department of Employment, Training and Rehabilitation.

Meantime, the nation's Consumer Price Index rose nearly 15 percent between 1997 and last year, while the U.S. poverty level for a family of four with two children rose $1,968 to $18,266, according to the Census Bureau.

There are those who argue it is unfair to compare $100,000 wage earners to their private sector counterparts. Many six-figure moneymakers hold advanced degrees, manage large agencies and work sizable amounts of overtime in employee-starved agencies.

Government administrators say the region's economic boom has driven much of the increase in the six-figure list. Growing communities boost demands for good schools, timely police and fire protection, clean water, health care, safe roads and effective development departments.

Government agencies typically set pay levels by comparing compensation packages in similarly sized communities, especially as they work to recruit and retain talented employees for jobs that demand advanced degrees.

"Urbanization is associated with the expansion of the public sector. Throwing people together raises some opportunities and needs at the same time," said Max Sawicky, a senior economist at the Economic Policy Institute, a think tank in Washington, D.C.

North Las Vegas is one of the fastest growing cities in the country, with the development driven by the regular release of land by the federal Bureau of Land Management. The city's population nearly doubled from 1997 to last year, growing from 88,559 to 137,691, and is projected to increase to 174,561 by 2005 and more than 500,000 in 2020.

The city is experiencing a massive influx of people who demand services, placing a greater premium on qualified public employees, and that costs money.

Kurt Fritsch has held the North Las Vegas city manager's post since 2000, earning $147,832 last year. His city ranks seventh on the pay list with 61 $100,000 earners, up from seven in 1997.

"I'm the CEO of a $270 million corporation," said Fritsch, referring to his city's annual budget. "What is that worth? If you want to compare it to the private sector that's the way to look at it. I can assure you there are folks out there who we're doing business with that are making a lot more than I am. I'm not saying everybody in private business is making those kind of dollars, but when you're talking about this kind of business it's not one kind of business. It's about water, sewer, fire, police, growth issues."

The general managers of Strip megaresorts earn annual salaries approaching $500,000, plus bonuses and stock options. Top executives at the city's major gaming companies receive compensation topping $1 million.

Most of the region's nonmanagement workers are the beneficiaries of collective bargaining in government agencies. Administrators and state employees are not. But union activists set the floor for yearly cost-of-living adjustments that filter up to every level of government employment.

Critics charge that government administrators, workers and their union representatives seek any pretext to increase budgets and pay, angering financially strapped Americans, especially in the midst of a national recession.

"What we're talking about is raising tax money from lots of people who on average earn less than the people they support. There may be lots of good reasons for it, lots of training, degrees, but it's kind of an awkward thing," said Marvin Kosters, director of economic policy studies at the American Enterprise Institute in Washington, D.C.

Persistent stereotypes

A 2002 survey of 17 government agencies in Nevada placed the average government salary at $46,466, according to figures collected by the state Department of Personnel.

The Las Vegas Valley Water District topped the ranking with an average annual salary of $58,200 for the year. The city of Las Vegas was second at $56,448 followed by the Metropolitan Police Department at $52,000 and the city of Henderson at $51,891. The state of Nevada, whose workers are forbidden to engage in collective bargaining, ranked 15th on the list at $42,718.

State workers fared much better when compared to their counterparts in 10 Western states. Just two of the states surveyed, California at $49,944 and Colorado at $44,676, ranked higher than Nevada's state employees.

Despite the numbers, government employees are not particularly well paid, argues one observer of government-worker relations.

"I think that misinformed, taxophobic citizens are just convinced state employees are overpaid and underworked, and that's not a realistic view any longer," said East Carolina University Professor Richard Kearney, a political scientist. "The 1990s were really an anti-government decade, and the leadership came partly from Washington and from many of the state capitals with the rise of the Republican Party and conservative politics."

Las Vegas businessman Dan Burdish offers a different take on the subject. He believes hefty paychecks are symbolic of what ails government. The outspoken critic of government spending owns two Las Vegas-area auto repair shops and 10 repair vans that carry The Car Doctor brand name.

Five years ago, he invested $400,000 of his own money to purchase the 27-year-old business. Today, the 52-year-old Las Vegan works seven days a week, 10 hours daily for what he says is a modest return on his equity. Last year he took home $75,000 for his efforts.

"As far as the physicians making more than $100,000, I have no problems with that. If we're going to have UMC you have to hire qualified doctors and pay them top money," Burdish said. "I just don't know if it's worth the funds for nonphysicians. I just cannot imagine where we would need 800 people making over $100,000. I can't imagine why it would take 1,000 people making $100,000 a year to run the government in the state of Nevada with 2 million people."

The president of a statewide anti-tax group agrees with Burdish, saying it is easier to justify high salaries for medical professionals than their non-M.D. counterparts, especially in tight budgetary times when state and local governments are seeking additional dollars for pay raises.

"You would assume that somebody in a median income household would be understanding of medical doctors making more," said Carole Vilardo, who heads the 800-member Nevada Taxpayers Association, "but if you're raising salaries at the same time you're raising taxes it's always a concern."

Linda Blish is one of the non-M.D.'s on the list. With a 2002 earnings total of $100,463, she is one of the highest paid employees at the Southern Nevada Water Authority. The 46-year-old microbiologist has worked for local water agencies for 23 years, starting as a $15,938-a-year lab tech and now serving as the laboratory manager for the public agency that manages the region's water supply.

Blish and her staff of 35 chemists, microbiologists and field technicians check 30,000 water samples annually with 300,000 tests. They search daily for any one of 150 contaminants that could endanger the region's water supply. She is aware that critics rail against public employees earning six-figure incomes.

"I understand that perception exists," Blish said, "but from a personal standpoint I've been with the water district for 23 years. The district values its employees. We can't get good chemists and good microbiologists without making sure we can pay to attract and retain them. Besides, there is too much at stake."