Henderson’s 17.3 percent decline in revenue less than officials predicted
Funny what passes for good news in bad economic times.
On Thursday, Henderson officials learned that the city's consolidated tax revenue dropped more than 17 percent in January, and their reaction was one of relief.
As it turns out, the 17.3 percent decline was less than expected. City projections anticipated a 20 percent drop in January compared with the same month last year.
"So we're actually ahead of the game," city spokeswoman Kathy Blaha said.
In response to the deepening, worldwide financial crisis, Nevada's second largest city is operating under a five-year cost cutting plan that was developed late last year to address an expected budget shortfall of more than $50 million. That plan assumed a 20 percent drop in consolidated tax revenue in January and an 18 percent drop in February.
The city won't know the results for February until next month.
Blaha said no special action will be taken in response to the January figures because "we were already prepared for this."
About half of Henderson's operating budget comes from consolidated taxes, and 90 percent of that money comes from sales taxes collected in the city. Consolidated tax revenue fell 22 percent in December compared with the same month in 2007. City officials were projecting a 10 percent decline in the December revenue.
Until recently, such year-to-year declines were unheard of in Henderson, which has seen its population and tax base explode in the past 20 years.
With spending cuts in every department and other cost-cutting measures, the city has put projects on hold. It has reduced staff through a voluntary employee buyout program and is experimenting with a voluntary furlough program under which employees can take unpaid days off.
The city's consolidated tax revenue for January was slightly less than $5.5 million. In January 2008, the city collected more than $6.6 million.
In December, the peak of the holiday shopping season, Henderson pulled in $7.5 million, down from almost $9.7 million in December 2007.
Contact reporter Henry Brean at hbrean@ reviewjournal.com or 702-383-0350.
