EDITORIAL: City of Las Vegas proposes bonuses as taxpayer funds dry up

Las Vegas city officials have a message for the tens of thousands of jobless taxpayers struggling to keep food on the table and make rent during the region’s devastating economic freeze: Pound sand, suckers!

The coronavirus pandemic has killed more than 100,000 Americans, brought business owners to their knees and cratered government budgets. Gov. Steve Sisolak estimates a shortfall of up to $911 million for the current fiscal year, as a rushing stream of tax collections has evaporated to a trickle. Cuts and layoffs loom at state agencies.

Over at Las Vegas City Hall, however, the folks on Main Street prefer a different approach. Instead, they’re taking inspiration from the boys at the Delta House with a budget proposal that can generously be described as a really futile and stupid gesture and only reinforces the notion that too many of Nevada’s elected officials are more concerned with pandering to government unions than with serving the taxpayers they purport to represent.

Even after more than two months of minimal economic activity, the city remains so flush with cash that it can apparently move forward without eliminating jobs or asking employees for wage or benefit concessions. Instead, it sits poised to provide 1,300 of its workers with 3.23 percent hazard pay bonuses in July even if they were not on the job during the coronavirus shutdown.

“Everybody gets it,” said DeAndre Caruthers, president of the City Employees’ Association, “if you were at home or if you were working.”

The indefensible perk comes as part of a tentative deal the city reached May 14 with the largest of its four bargaining units. To make matters worse, the bonus money, Mr. Caruthers revealed, is supposed to come from the $119 million the city expects to receive through the CARES Act, one of the massive coronavirus relief packages passed by Congress.

Where to begin?

Unemployment claims have so smothered the state that thousands of furloughed private-sector workers still await their jobless benefits. Yet city employees who have been idling at home since mid-March while still cashing paychecks will pocket bonuses paid for by those very same luckless workers. In what alternative universe is this appropriate?

Meanwhile, in their effort to kowtow to municipal unions, did anybody on the City Council or the negotiating team consider the legality of the proposal? The CARES Act prohibits governments from funneling their federal handouts to employees through bonuses, but it does allow limited use of such funds for clearly defined “hazard pay” related to the pandemic. The city’s ruse circumvents the law and represents an egregious misuse of federal aid. It also vindicates the fears of Senate Republicans, who argue that financial relief for state and local governments will in many instances ultimately subsidize the misplaced policy priorities of heavily indebted states and municipalities unrelated to the virus carnage.

City officials insist their goal is to avoid layoffs and that bonuses are preferable to pay hikes because they don’t increase baseline budgets. But who is talking about handing out pay hikes in the current economic climate? And this sleight-of-hand union “bonus” giveaway will only postpone the inevitable, particularly when the Treasury Department gets wind of the “hazard pay” gimmick involving federal aid.

The coronavirus lockdown means Nevada’s local governments face financial distress for the foreseeable future. It’s time Las Vegas officials discovered some fortitude. If council members want to limit job losses, they’ll demand that the city’s municipal unions agree to temporary pay and benefit concessions that reflect short-term revenue realities instead of continuing to batter beleaguered taxpayers like cash-stuffed piñatas.