Elko has learned a lesson as valuable as gold: No economic boom is immune from a bust.
We hope Las Vegas leaders are paying attention.
Northern Nevada’s mining capital is reaping the riches of record gold prices. Its vibrant local economy has created challenges Southern Nevadans are all too familiar with: a shortage of housing, increased school enrollment, busier days for public safety workers.
A front-page story in Wednesday’s Los Angeles Times details the town’s prudent response: “Now the Elko city government is mostly socking away cash and putting off hiring, even for a police force strained by a transient population.”
Elko, like other mining towns, has been through the boom-and-bust cycle multiple times. Ten years ago, when Southern Nevada was leading the nation in population growth and job creation, falling gold prices sent Elko’s economy into hibernation. Homes were abandoned and no one was hiring.
Today, most new Elko residents must hang their hat inside an RV or a trailer. New residential and commercial construction is cautiously limited. Elko officials still aren’t ready to pull the trigger on a $15 million recreation center; they want more tax dollars in reserve.
The city’s chief of police, Don Zumwalt, told the Times that his three dozen employees are overwhelmed at the moment, but taking on a payroll that isn’t sustainable over the long term isn’t a wise course. “Whenever the downturn comes, I don’t want to lay off a bunch of people,” he said.
The Times story makes mention of Southern Nevada’s lavish local government spending during the boom times. From the late 1980s until the middle of the previous decade, tax collections grew faster than population — and government personnel costs grew even faster than tax collections.
Dialing back that spending has been a brutal process. But rest assured, when the Las Vegas economy recovers, public-sector workers will demand the generous annual raises they once enjoyed plus additional increases to help them “catch up” on what they couldn’t collect during the recession.
Will Southern Nevada officials, like Elko leaders, have the fortitude to hold the line and look ahead to the next recession?