Council to discuss shortfall

For months now, Las Vegas city staff members have borne the same bad news on a regular basis at City Council meetings: Tax revenues aren't rolling in like they used to.

"It's spiraling downward," Mayor Oscar Goodman noted last week, referring specifically to the consolidated sales tax, which makes up about 51 percent of the city's general fund.

"Certainly it's disappointing, but not unexpected based on the real estate market," Goodman said.

Estimates suggest the city will be about $20 million short of what was budgeted this year for public safety and general government operations.

What that means will be discussed today at a special City Council meeting.

"We'll be talking about costs. We'll be talking about fees. We'll be talking about tightening our belt," Goodman said, although he offered no specifics.

"I don't know where it could be tightened," he said.

Las Vegas entered this fiscal year July 1 expecting flat or limited revenue growth following several years of healthy increases.

But the drumbeat of bad news this year means that "we're going to have to take action," said Mark Vincent, the city's director of finance and business services.

"It's not just the quarter," Vincent said. "Every one of the local governments has had negative growth in their (consolidated sales tax) ... for seven months in a row.

"That's a trend. We've all been hoping to see it bottom out, but I don't see it bottoming out."

September's sales tax revenue was $23 million, down almost 6 percent from a year ago. For the three months ending Sept. 30, sales tax revenue was $63.2 million, a 3.5 percent decrease from 2007.

This year's budget called for $551 million in the general fund, but now only $530 million is expected to come in.

Vincent wouldn't discuss any new budget recommendations until after his council presentation.

"We won't be talking about layoffs," he said, but allowing positions to remain vacant for longer than planned is a possibility.

Employee salaries and benefits make up a majority of operational spending, and that figure has been growing at a faster rate than revenues in recent years.

That category jumped $32 million, or 13 percent, between 2006 and 2007, while revenues rose 3.2 percent. That increase included many new positions, Vincent noted.

Funding for pay and benefits is slated to increase $25.7 million, or 9.2 percent, this year.

About 90 percent of city employees are covered by collective bargaining agreements. While terms vary, contractual annual pay increases usually include a step increase of about 5 percent and a cost-of-living increase of 3 percent to 4 percent, Vincent said.

Even when money is tight, there's no requirement to revisit those agreements, he said. The only way to reopen those contract negotiations would be if the unions agreed to do so.

"We don't have what you would call an economic reopener," Vincent said.

But doing so anyway isn't out of the question, said Tommy Ricketts, president of the Las Vegas City Employees Association. The group represents about 1,600 city employees in a broad spectrum of jobs.

"I haven't seen what's proposed," but "of course I'm concerned," he said. "If we have to meet and do something differently, we have done that."

Still, he said, city employees have nothing to apologize for when it comes to negotiating salaries and benefits. Las Vegas has set a goal of attracting living wage employers, Ricketts said, and it would be "hypocritical if they didn't at least try to meet that in our collective bargaining agreement."

"People have a perception that we're fat, dumb and happy. Most of our positions are making a living wage. We're not getting rich.

"We're constantly looking at salary figures. ... We're not too far off, unless you look at the Southern states. You look at the cost of living, and it pretty much balances out."

Contact reporter Alan Choate at achoate@reviewjournal.com or (702) 229-6435.