55°F
weather icon Partly Cloudy

Las Vegas official says city facing financial crisis

Las Vegas officials don’t yet know how badly the novel coronavirus will hurt the city’s budget, but business closures may trigger financial turmoil that rivals the Great Recession.

But unlike the economic downturn more than a decade ago, this crisis came on suddenly, with an assortment of sales tax-paying establishments shuttering practically overnight.

Health and safety measures enacted across the U.S. are likely to hit all local governments in the wallet but it is expected to strike a particularly hard blow on the city, which collects more than half of its income from consolidated tax revenue — principally sales tax.

“We’re the most undiversified city probably in America, and tied almost exclusively to tourism and entertainment, and there’s a consequence for that,” City Manager Scott Adams said.

But as much as the situation is “very, very critical,” it is also unclear: The city receives tax figures from the state two months behind so it will not understand the effects of the governor-ordered nonessential business shutdowns until May.

So Adams said the city has approached the state in an effort to obtain real-time information to mitigate an immediate problem also faced by other governments as budget preparations for the new fiscal year kick into high gear. For now, the city is operating on unreliable estimates, and those paint a bleak picture.

Shortfall concerns

Adams said the city could be facing a deficit as high as $100 million in its $600 million general fund budget, although he cautioned that the “very wild” preliminary guess would need to be shored up by actual data. For context, the city adopted a budget with a $5 million surplus last year.

In the throes of the recession in 2010, the city forecast an $80 million shortfall and laid off more than 200 employees in a single day. In response to the current crisis, Adams said he has ordered hiring and expense freezes and nonessential employees have been furloughed.

He said it was difficult to speculate what the final effects could be on the city workforce in terms of cuts as city officials try to balance the budget.

Other factors complicate projections of how Las Vegas will be affected: The unknown length of social distancing and business closure mandates, what the recovery will look like and how long it will take for consumer confidence to return to the city.

City officials had already adopted certain precautions prior to the pandemic, including freezing non-critical positions to plan for tougher roads ahead, a practice that led to the present fiscal year’s surplus. The rainy day fund also increased last year to more than $120 million, maintaining the city policy of holding reserves at 20 percent of operating costs.

Balancing act

Throughout the pandemic, Adams said the city has focused on three key areas: Resident health, employee well-being and maintaining critical city operations.

But it has been a struggle in the current climate, he acknowledged, to balance keeping people safe and healthy and preserving economic viability.

“And so our goal, we’re really trying to be positive with our businesses, show them how they can continue to make some level of living but meet clearly the [Centers for Disease Control and Prevention] guidelines because I don’t think we think it’s an either/or,” Adams said.

To that point, the city’s assistance to businesses has included deferring license payments with no penalty, freezing license expirations until the emergency ends and, on Thursday, announcing it would offer up to $2,000 in grant funding to businesses in the city’s redevelopment area to reimburse expenses for securing buildings.

Help wanted

Adams said Las Vegas needs federal support, including aid to cities and emergency relief to non-city workers.

“I think we’re going to struggle just to get our own employees and our own functions through this crisis,” he said. “The financial impact on us is going to be incredible.”

In declaring a state of emergency last week, the city opened itself to potential funding through the state and federal governments.

As the crisis grows, the city has become “very judicious” about resources. Adams said he placed an emergency order three weeks ago for $50,000 worth of hand sanitizer, an unprecedented amount for the city, but it remains on back order.

Illustrating the city’s conservative approach, it announced Thursday it was amending its plan to sanitize high-touch areas at all 70 of its parks due to a nationwide shortage of personal protective equipment, reserving supply for first responders and “other more vital needs.” The plan had been to clean parks twice daily but now staff will sanitize twice a week as normal, and the city is discouraging use of playgrounds and other equipment. Parks remain open, however.

Contact Shea Johnson at sjohnson@reviewjournal.com or 702-383-0272. Follow @Shea_LVRJ on Twitter.

Don't miss the big stories. Like us on Facebook.
Politics Videos
Henderson allows immediate sale of alcohol with curbside pickup - VIDEO
The city of Henderson decided Thursday evening to allow alcohol to be sold by restaurants as part of their curbside pickup service during the COVID-19 crisis. (James Schaeffer / Las Vegas Review-Journal)
Sisolak signs order banning any gathering of 10 or more people - VIDEO
Gov. Steve Sisolak on Tuesday signed a new order banning any gathering of 10 or more people in Nevada in another step the state has taken to slow the spread of the new coronavirus. (James Schaeffer / Las Vegas Review-Journal)
Takeaways from the president's daily briefing on coronavirus - VIDEO
RJ Washington correspondent Debra Saunders talks about today's daily White House news conference regarding the coronavirus outbreak, Friday, March 20, 2020. (Renee Summerour/Las Vegas Review-Journal)
Judicial Department 5 Debate - Video
The Las Vegas Review-Journal hosts a debate between the 3 candidates running for Department 5 in Clark County District Court. Participating are Veronica M. Barisich, Terry A. Coffing and Blair Cowan Parker.
Trump cancels Las Vegas trip because of ‘coronavirus outbreak’ - VIDEO
President Donald Trump canceled planned travel to Las Vegas ‘out of an abundance of caution’ amid virus outbreak. (James Schaeffer / Las Vegas Review-Journal)
Trump signs $8.3 billion coronavirus package - VIDEO
President Trump signed a bill providing $8.3 billion in emergency funding to combat the coronavirus outbreaK, Friday, March 6, 2020. (Las Vegas Review-Journal)
Sen. Rosen supports Judge Togliatti - VIDEO
Sen. Jacky Rosen shows her support for Nevada Judge Jennifer Togliatti to be appointed to the federal bench. (Sen. Jacky Rosen)
Sen. Cortez Masto shows support for Judge Togliatti - VIDEO
Sen. Catherine Cortez Masto shows her support for senior state District Court Judge Jennifer Togliatti to be appointed to the federal bench in Nevada. (Sen. Catherine Cortez Masto)
MSNBC’s Chris Matthews resigns following series of controversies - VIDEO
The "Hardball" host announced his departure Monday night, March 2, 2020, effective immediately. The anchor recently came under fire for comparing Sen. Bernie Sanders’ victory in the Nevada caucasus to the Nazi conquest of France in 1940. (Las Vegas Review-Journal)
Candidates file for office in Clark County - VIDEO
Amy Klobuchar drops out of 2020 presidential race - VIDEO
On March 2, campaign officials announced Amy Klobuchar’s decision to suspend her presidential bid. The news comes on the eve of Super Tuesday and just one day after Pete Buttigieg also announced his decision to depart from the race. (Las Vegas Review-Journal)
Activist shouts warnings at Nevada Democratic chairman's home - VIDEO
A Southern California activist and supporter of Sen. Bernie Sanders spent nearly an hour shouting warnings and condemnations of the Democratic Party through a megaphone at the home of Nevada Democratic Party Chairman William McCurdy II on the eve of last week’s presidential caucuses, prompting him to call the police. (Maria Estrada)
The Nevada caucus in photos
Best shots from the Review-Journal photo staff's coverage of the Nevada Caucus, Saturday, February 22, 2020.
Bernie Sanders announces his Nevada caucus win to supporters in Texas
At a rally in San Antonio, Texas, Bernie Sanders announces winning the Nevada Democratic caucus.
Joe Biden addresses supporters in Las Vegas
Joe Biden energizes a crowd of supporters at the IBEW Hall in Las Vegas after the Nevada Democratic caucus.
Tweet highlights from the 2020 Nevada Democratic caucus
Confusion, flaring tempers and misinformed volunteers highlighted Review-Journal tweets during the Nevada Democratic caucus.
Voters comment on Nevada Democratic caucus - VIDEO
Nevada caucusgoers comment on the process from locations across the Las Vegas Valley, Saturday, Feb. 22, 2020. (Las Vegas Review-Journal)
Doolittle Community Center hosts caucuses - VIDEO
The Doolittle Community Center hosted six precincts in one room for the Nevada Democratic caucuses, and voters engaged in debate and discussion about who to lead each precinct, Feb. 22, 2020. (James Schaeffer / Las Vegas Review-Journal)
Desert Oasis High School has wait for caucus check-in - VIDEO
James Strange has been waiting in line to caucus for the first time for 45 minutes and some said they have been waiting for an hour at Desert Oasis High School for the Nevada Democratic caucuses. (Las Vegas Review-Journal)
Conservative guru encourages Republicans to vote in Democratic caucuses - VIDEO
Republican activist Chuck Muth encourages his fellow GOP members to change party affiliation for a day to elect Bernie Sanders. (K.M. Cannon/Las Vegas Review-Journal) @KMCannonPhoto
Nevada Congresswoman Susie Lee at Desert Oasis High School - VIDEO
Rep. Susie Lee, D-Nev., stopped by the Nevada Democratic caucus at Desert Oasis High School in Las Vegas, Saturday, Feb. 22, 2020. (Al Mancini/Las Vegas Review-Journal)
Caucus day in Summerlin - VIDEO
Out-of-state caucus observer Ken Valz speaks about the Nevada Democratic caucuses at Palo Verde High School, Saturday, Feb. 22, 2020. (Las Vegas Review-Journal)
Doors open for Nevada Democratic caucuses - VIDEO
Caucusgoers are lining up Saturday morning to take part in the Nevada Democratic caucuses across the state (Renee Summerour/Las Vegas Review-Journal)
Caucus day at East Last Vegas Community Center - VIDEO
Registration begins at the East Las Vegas Community Center for the Nevada Democratic caucuses, Saturday, Feb. 22, 2020. (Las Vegas Review-Journal)
It’s caucus day in Nevada - VIDEO
Democrats will gather at over 250 locations across the state to declare their presidential preferences in the Nevada caucuses, Saturday, Feb. 22, 2020. (Las Vegas Review-Journal)
Democratic caucus-goers lined up to register at Liberty High - VIDEO
Democratic caucus-goers lined up to register at Liberty High in Henderson, Saturday, Feb. 22, 2020. (Bizuayehu Tesfaye/Las Vegas Review-Journal) @bizutesfaye
Elizabeth Warren holds rally with Julian Castro
Elizabeth Warren held her Get Out the Caucus Block Party with Secretary Julián Castro at the Clark County Government Center Amphitheater.
Trump caps western swing with campaign rally in Las Vegas
President Trump speaks to an enthusiastic crowd of thousands gathered at the Las Vegas Convention Center during a tour across the western United States.
Anti-Trump Protestors at LVCC Rally - Video
President Trump speaks at a Keep America Great rally as a small group of protesters gather outside the Las Vegas Convention Center.
Thousands gather for Trump rally
Thousands showed up for President Donald Trump’s rally Friday morning, forming a line that stretched nearly a quarter mile around the Las Vegas Convention Center.
Trump supporters camp outside the Las Vegas Convention Center
Trump supporters camp outside the Las Vegas Convention Center on Thursday, Feb. 20, 2020, where President Trump will held a rally on Friday in Las Vegas. (Bizuayehu Tesfaye/Las Vegas Review-Journal) @bizutesfaye
President Trump lands in Las Vegas - VIDEO
Donald Trump landed in Las Vegas on Tuesday, Feb. 18, 2020, as part of a four-day western state swing. (James Schaeffer/Las Vegas Review-Journal)
Long lines during early voting in Las Vegas - VIDEO
The final day of the Nevada Democratic Party’s early presidential caucuses wrapped up Tuesday, as thousands of Democrats lined up at 55 locations around the state for their last shot at filing an early preference card before the traditional caucuses on Saturday. Long lines were seen at CSN Charleston in Las Vegas. (Alexis Egeland/Las Vegas Review-Journal)
Democratic candidates Elizabeth Warren and Tom Steyer talk pay for child care workers - Video
Elizabeth Warren and Tom Steyer talk to care in action about the importance of Medicare for All, paid leave and child care. (Nathan Asselin/Las Vegas Review-Journal)
Election 2020: Nevada Caucus and Early Voting - Video
AARP's Nevada Caucus discussion with Steve Sebelius about the Nevada Caucus and early voting.
Election 2020: Nevada Caucus - Video
AARP's Nevada Caucus Discussion with Steve Sebelius. Join us as we discuss the Nevada Caucus process.
Las Vegas ready to enforce homeless camping ban - VIDEO
Las Vegas police will begin enforcing a controversial camping ban on city streets on Saturday, but officials say they expect to impose the penalties available under the new ordinance only in rare instances. (James Schaeffer / Las Vegas Review-Journal)
Yvanna Cancela Speaks on Supporting Biden - Video
The RJ Politics podcast crew sits down with Nevada State Senator Yvanna Cancela to discuss why she is supporting former Vice President Joe Biden in the 2020 presidential race.
Tom Steyer on Donald Trump and the economy - Video
Tom Steyer joins the RJ Politics podcast to talk about his campaign presence in Nevada and how he plans to take Trump on when talking about the economy. (Las Vegas Review-Journal)
Las Vegas City Council Votes On Homeless Ordinance - Video
The Las Vegas City Council on Wednesday will discuss expanding on a controversial camping and sleeping ban aimed at deterring the homeless from bivouacking on city streets to include hours when public sidewalks are being cleaned.
THE LATEST