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Cut spending during lean times

For the better part of five decades, Southern Nevada’s identity has been tied to growth.

Fastest-growing population. Fastest-growing job base. Fastest-growing economy. An industry unto itself.

Businesses small and large and governments of all levels banked on tens of thousands of people moving to Clark County every year to find work, spend their income and pay taxes. And every year, as sure as 100-degree summers and political corruption scandals, they came, stayed and prospered.

Until this year.

Two weeks ago, the Southern Nevada Planning Coalition adopted a county population estimate of 1,986,146 as of July 1. That’s a decrease of 10,396 from the previous year. The figure is only an approximation — some analysts disagree over the nature of the dip, saying it’s more likely that the estimates of the previous two years were simply too high.

But if State Demographer Jeff Hardcastle and Gov. Jim Gibbons endorse the estimate, it will mark a sudden, stunning change in the prism through which nearly all state policy and spending decisions are made. It will be official: Clark County’s population is not growing.

It will warrant a re-evaluation of every long-term plan put in place by every agency and enterprise. Highway and road improvements. New-school construction. Mass transit and airport proposals. Water, sewer and flood-control projects. University and college expansions. Personnel needs.

Some ambitious proposals will need to be scrapped. Others will be delayed. All will have to be re-prioritized in response to a devastated economy, a free-falling housing market and a big decrease in job opportunities.

Is Las Vegas about to go the way of declining rust- and snow-belt cities? Not likely.

There’s no reason to think this paper population drop is the start of a trend. The state’s Economic Forum, which provides binding revenue estimates to the Legislature, sees things bottoming out in late 2009 or early 2010, about the time the $9 billion CityCenter opens on the Las Vegas Strip

That project alone will put back to work many thousands of hospitality workers who’ve been laid off, or stand to lose their jobs next year. Moving trucks will resume arriving in neighborhoods full, instead of empty.

The question is whether the state’s political class can wait that long for a revenue bounce. For more than 15 years, elected officials have pushed all kinds of tax increases, arguing “growth doesn’t pay for growth.” Over the past decade, government budgets have grown faster than the population and the economy as a whole.

Now that we’re not growing, they want even more tax increases to prevent budget cuts and preserve all the programs they put in place in response to growth. This is the very mistake that Midwestern and Northeastern governments have made, year after year, in response to the stagnant economies that resulted from their increasingly hostile business climates. Michigan and New Jersey are veritable wastelands of commerce because their governments couldn’t muster the courage to cut back in bad times. The punitive cycle feeds on itself.

These are historically difficult times for Clark County. The region’s population boom has been silenced for now. It is time for business and political leaders to reassess, not make panicked decisions that could make an already perilous period even worse.

 

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