‘Today is the day of reckoning’

The fiscal battles of Carson City were upstaged Thursday by a budgetary bomb at Las Vegas City Hall.

The blast could crumble whatever brotherhood remains among local public employee unions -- and finally begin the process of putting all Nevada governments on a fiscally sustainable path.

In June, 2½ years after this recession started sending private-sector workers into unemployment, the city will be prepared to launch the first round of major layoffs of full-time government workers in Nevada. A line in the sand has been drawn by someone other than union leadership.

Kaboom.

"Today is the day of reckoning," Mayor Oscar Goodman said during a Thursday meeting with the Review-Journal's editorial board to discuss the city's budget-cutting plan -- and the 171 pink slips that would be handed out.

The Legislature, which went into special session to close a nearly $900 million budget deficit, can swipe funding from other jurisdictions or raise taxes to balance the state's books. Because Nevada is not a "home rule" state, the City Council can't. Beyond draining its own reserves, the city's only options in reconciling an estimated $70 million revenue shortfall next fiscal year are to cut, cut and cut some more.

In November, City Manager Betsy Fretwell asked city workers to forfeit all contractually promised pay raises, take an 8 percent pay cut in July, then another 8 percent cut in July 2011 -- and those measures would have gotten the city only halfway toward its reduction target. The unions that represent most city workers, demonstrating their disconnect from the real world, howled that members could still be subject to layoffs, even if they agreed to the wage cuts.

No guarantees of lifetime employment in this economy? The horror!

Unless every bargaining group agreed to the cuts, Fretwell warned, severe cuts and layoffs would come this summer.

By the new year, city unions already were sniping at one another privately, with handsomely paid firefighters creating the most resentment, some city workers have told me. And within each union, members were splitting into two camps: one advocating shared sacrifice so no one would have to be laid off, the other supporting the absolutist, strong-arm tactics that had served their wallets so well over the years.

City workers are accustomed to getting total annual pay raises of about 8 percent, and last year, despite the economic downturn, most employees still received raises of between 5 and 6 percent.

When it became clear that the firefighters, in particular, would never agree to a wage reduction, it gave the city's other unions an excuse to stay away from the table. Doing so would have amounted to an acknowledgement that firefighters are more important than any bureaucrat or support employee, and weaken whatever bargaining leverage they might have, the thinking went.

So each union made a public statement unequivocally rejecting Fretwell's request, even though, behind the scenes, members of every union were starting to squirm at the prospect of losing their jobs. These city workers, many of them no doubt dedicated and hardworking, understand that there is no job anywhere in the valley that will offer them anything approaching the salary and benefits they currently enjoy at taxpayer expense -- even if they took the two 8 percent pay cuts.

On Thursday, the threat of layoffs, long an abstraction, became very real at City Hall. Now 171 people are the equivalent of dead men (and women) walking. They will continue to serve alongside more senior, better-paid, better-protected -- and in some cases, lazier -- colleagues for nearly four months. These people will collect additional pay raises after the layoffs clear out. How's that for an uncomfortable work environment?

And those fortunate enough to be retained will realize that they could be next. Fretwell said the city will use $39 million in its reserves to delay additional painful choices until July 2011, when cuts totaling that amount will come due.

Unless city workers take the pay cuts now.

By putting names and faces on these budget cuts, and by giving all city workers time to digest the consequences, Fretwell, Goodman and the rest of the City Council hope to get the concessions they asked for last year.

"The ball is in their court. This is their choice," the term-limited Goodman said. "Are they going to take care of one another and be altruistic? Or are the older ones going to say, 'To heck with the newbies; I don't care whether they lose their jobs'? Then we're going to have carnage."

And even more labor tension. Of the 171 layoffs, 116 are members of the City Employees Association, 13 are marshals, 12 are corrections officers, and 21 are from the fire safety inspection unit. Although 25 vacant firefighting positions will be eliminated, no firefighters will be laid off.

If the firefighters won't feel any pain, they'll have no compelling reason to renegotiate their current contract, which is up for renewal July 1. They'll let everyone else twist in the wind. Which makes the prospect of last-minute deal remote, at best.

Goodman is the perfect politician to take point on this nasty business. He can't seek a fourth term, so he can protect fellow council members with ambitions for higher office from union retribution. Only someone as popular as Goodman could lead the charge to roll back city wages after spending the first half of his tenure doing nothing to stop runaway growth in personnel costs.

And those costs are coming down, one way or another. If workers won't agree to pay cuts, then they'll be dismissed in droves, starting this June.

To this point, nothing has applied enough pressure to make public-sector unions blink. Not declining tax revenues and property tax assessments, not the news of tens of thousands of private-sector layoffs, not the reality that the stagnant economy might very well be what business leaders are calling "the new normal" -- and that government budgets must be adjusted accordingly.

But you can bet the blow at City Hall has the employees of union-owned Clark County -- which faces an astounding $200 million budget hole -- and North Las Vegas and Henderson paying attention and thinking hard about their next move.

Could they get by after having what amounts to two years of pay raises rescinded? Or would they rather take their chances in the private sector?

If they're looking for sympathy from taxpayers, they're even more out of touch than I thought.

Glenn Cook (gcook@reviewjournal.com) is a Review-Journal editorial writer.