Local governments are passing budgets for the fiscal year that starts July 1. In Southern Nevada, spending plans reflect how far governments are from sustainable operations.
Clark County commissioners approved a $1.2 billion budget Monday. That’s a 2.8 percent, or $33.3 million, increase over the current year. But all that growth and then some will be covered by reserves. The budget carries a projected $48 million deficit, which will be balanced by tapping savings.
The Henderson City Council approved that city’s $480 million budget Tuesday, authorizing a tiny increase over current spending levels. That figure carries a $7.2 million deficit that City Manager Jacob Snow says could be erased by employee buyouts. If that doesn’t work, the city will draw on reserves.
Meanwhile, the Las Vegas City Council on Tuesday approved a $482 million budget that comes with a $10 million deficit. The city will raid savings instead of imposing cuts or ordering layoffs. The council also approved a $19.5 million budget for its redevelopment agency. You guessed it: That budget comes with a deficit, too. An additional $1.4 million in reserves will balance that spending plan.
Our local governments have found efficiencies, laid off workers, eliminated vacant positions, limited hours of operation and persuaded some of their unionized workers to accept salary freezes or compensation cuts. And yet, four years removed from the bottom of the Great Recession, they still can’t balance their budgets without depleting reserves. That’s not encouraging.
As Mr. Snow pointed out Tuesday, no one is quite sure how much the full rollout of ObamaCare will cost come 2014. The burdens of the federal law could add to municipal deficits. Payments on the lease-purchase agreement for the new Las Vegas City Hall will rise by millions of dollars in the near future. Although valley property values are appreciating, property taxes will not rise accordingly — thankfully — because of statutory caps on increases. Bargaining groups want to start collecting on contracted pay raises again. For heaven’s sake, Las Vegas personnel costs increased by $10 million across all funds for next year alone.
Businesses and households don’t have the luxury of living beyond their means, year after year. Savings only go so far, and once they’re gone, tough decisions get even tougher. Our local government leaders clearly want to start saying yes all the time, as they did throughout this valley’s decades-long economic boom. If they’re ever going to balance their budgets, they need to get used to saying no.