A matter of fiscal reality


City of Las Vegas employees have been given an opportunity to pick their poison: accept 8 percent pay cuts in each of the next two fiscal years or say goodbye to hundreds of colleagues and hope to survive massive layoffs.

The brutal request, made in letters sent to bargaining units last month by City Manager Betsy Fretwell, is not the slightest bit surprising, nor will it be the only one to come from Nevada governments in the coming year. When out-of-control growth in personnel costs collided with declining tax revenues, the need for huge rollbacks in public-sector compensation became inevitable.

The valley's government workers have been largely immune from the effects of this recession, watching their pay increase as steadily as the unemployment rate, their salaries and benefits enshrined in contracts negotiated during better times. Step raises. Merit raises. Cost-of-living raises. Longevity raises. Early, guaranteed retirement.

Now the city is facing an estimated $430 million shortfall over the next five years. And the proposed pay cuts don't even cover the entire two-year deficit -- the city will still have to come up with tens of millions of dollars in additional savings to balance the books.

Things wouldn't be nearly this bad if elected officials had taken more seriously their stewardship of taxpayer money, if they hadn't looked the other way for years and years, rubber-stamping unaffordable contracts and shrugging their shoulders about the nuances of collective bargaining.

Now the bill is due and, if Ms. Fretwell's proposals are carried out, the party is over. Ms. Fretwell wrote that in addition to the separate 8 percent reductions, all contracted pay raises for the city's 2,900 positions must be eliminated "without any provision to catch up at a later date."

Layoffs should be an absolute last resort. Forcing hundreds more people into the unemployment line will exacerbate the death spiral of this recession. And certainly, no additional burdens can be put on the city's struggling businesses and residents in the form of higher taxes and fees.

The city must cut to make its nut, and its payroll is its single biggest expense. Clark County government, the state and the cities of Henderson, North Las Vegas and Reno won't be far behind in issuing their own ultimatums to workers.

City employees should vote to accept the pay cuts and avoid layoffs, at least for now. There can be no more guarantees. And the members of the City Council -- and all elected officials -- must make sure their personnel costs never, ever get this far away from them again.

In this economy, there is no other choice.

 

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