One thing became apparent Wednesday in budget talks for the city of Las Vegas: While the pandemic has certainly hurt, it could have been much worse.
Revenues during the present fiscal year, which ends June 30, were $65 million better than anticipated in large part because sales tax revenue outpaced projections from a year ago when then-City Manager Scott Adams suggested the city might be facing its worst financial crisis ever.
“We took a conservative approach to make sure that we didn’t over-budget and put ourselves in a predicament,” City Manager Jorge Cervantes said. “Fortunately that was a wise thing to do, because our budget performed better than we anticipated, which is a good place to be in.”
Ultimately officials said they believe the current budget will wind up with $617 million in general fund revenues against expenses totaling $662 million. The final estimated budget represents a $45 million deficit backfilled by reserves but also shows revenues that fared better than the $572 million budget submitted to the state last May.
Moving into the upcoming fiscal year, which starts July 1, city lawmakers passed a tentative budget Wednesday that calls for $621 million in general fund revenues and an $11 million surplus.
Cervantes said the spending plan will help to restore critical positions that may have been cut too deep last year when it was unknown how long the pandemic might last and how profound its effect on city finances would be.
“It’s such an exciting time, but it’s only if we don’t sit on our laurels and help this city get back to its normalcy,” Mayor Carolyn Goodman said.
Better than feared
It is also the latest sign of economic recovery for Southern Nevada governments: Tethered to the prospect that the economy will steadily bounce back, Clark County passed a tentative budget last month projecting an 18 percent revenue increase year over year.
Las Vegas officials said that federal relief funding injected a boost into the local economy, assisted businesses and spurred consumer activity.
The city, which was scrutinized last year for spending much of its CARES Act dollars on public safety payroll, did not yet factor into its tentative budget the estimated $130 million it is supposed to receive over the next two years from President Joe Biden’s American Rescue Plan.
But Cervantes said the city intends to push the “majority” of it out into the community, including business assistance, fighting food insecurity and providing affordable housing, as well as to support efforts that otherwise are without funding.
Overall the city is expecting to restore funding for 54 positions — 17 in the area of public safety — moving it closer to pre-pandemic service levels.
The budget proposes reallocating some public safety resources back into city parks, bumping staffing levels at fire stations where equipment has been taken out of service, adding resources for people experiencing homelessness and increasing health care access in underserved communities, Cervantes said.
Consolidated sales tax is expected to jump 4.1 percent over the current fiscal year’s estimates, which would position the city to where it had been only three years ago. In addition, the city anticipates 61 new capital improvement projects between July 1 and June 30, 2022.
The final budget is expected to return to the council next month for review, and then it must be filed with the state by June 1.