Public-sector workers should share the pain

Over the past week we have seen local governments -- Clark County and several cities -- submit budgets for the next fiscal year. Disappointingly, those budgets were largely balanced through layoffs and shifts of money from capital projects and reserve funds and not by tackling the real problem: the exceptionally high level of local government employee compensation.

Recent Las Vegas Chamber of Commerce studies have shown that Nevada's public employees are the sixth highest paid public employees in the country. Those studies also point out that there is a significant difference in the pay of local government employees and those employed by the state of Nevada and the private sector. Local government employees make nearly 30 percent more than those employed in the same job in the private sector and state government.

Additionally, retirement benefits, through our Public Employees Retirement System (PERS), are the most generous of any state in the country -- a benefit for which local government employees contribute nothing from their paychecks, and for which state employees typically contribute one-half the cost.

As a result, we spend approximately $1 billion every year to fund the difference in compensation for local government employees versus what the same employee would make if he or she did the same job for the state.

Meanwhile, it is no secret that our community is going through the deepest recession since the Depression. In the last 2.5 years, unemployment in Southern Nevada has risen from 5.6 percent to nearly 14 percent, resulting in the loss of 137,000 of what used to be 834,000 private-sector jobs. This means that one in every six private-sector workers has lost his job during this recession.

Hundreds of businesses have shut their doors, and those still in business have seen their taxes and fees increase, while at the same time often having no choice but to make painful cuts to their work force. Most private-sector workers have experienced some combination of salary and benefit reduction, furloughs or layoffs. The U.S. Bureau of Economic Analysis reports that private-sector wages in Clark County declined from an average of $720 per week at the end of 2007 to $665 per week at the end of 2009.

Businesses and their employees have made those sacrifices in order to keep their doors open and retain as many jobs as possible. It is now time for the public employee unions in this community to make equal sacrifices for the very same reason.

Consider this: Of the Las Vegas Fire Department's $117.1 million annual budget, $102 million, or 87 percent, is employee compensation -- $57.4 million in wages and a whopping $44.6 million in benefit costs. The total cost for an average firefighter is roughly $168,000 per year.

Firefighters are among this community's -- any community's -- most important employees. But there is a limit to what a community can afford to pay for their services, especially during a recession. And local governments in Clark County have exceeded that limit.

Over the past several months we have all watched as elected officials -- some of whom only lately have awakened to the real problem -- and public employee union officials have tussled on the fringes of the compensation issue. While out-of-work Nevadans are trying to get by, the unions and local governments have been discussing how large a cost-of-living increase will be (on top of 4 percent, or 5 percent or 6 percent step increases). Or whether there should be uniform allowances. Or whether some public employees should pay an extra 0.5 percent toward their retirement.

On top of it all, unions are actually asking what they are going to get in return for these "concessions."

Thousands upon thousands of hard-working men and women across the Valley have lost their jobs or had their pay and benefits reduced significantly. Those people are making real sacrifices. And it is the taxes from those who have struggled so much -- many of whom are barely getting by themselves -- that pay the salaries and benefits of the Valley's public employees. How can those people help but be offended by the stance taken by the public employee unions? How can they not wonder whether that extra $1 billion in tax dollars per year it takes to pay the added costs for local public employees could be used to provide additional necessary services or fix the state's looming budget deficit?

We are faced with a situation in which we have some of the highest paid local employees in the country and, as the Chamber's studies have also shown, we have the fewest number of public employees per capita in the country. And the proposed solution to this budget crisis is to lay off employees? What sense does this make?

It is time for public employees and their unions to come to the bargaining table willing to make true sacrifices in order to help our community get through this terrible economic storm.

We all know it is difficult to concede some of what you already have. However, most of us have had to make painful concessions over the past two years. And many have lost a lot more.

But sometimes it takes real leadership to step up to the bargaining table and accept the same level of sacrifice that so many in our community have already endured. Now is one of those times.

Steve Hill is chairman of the State Policy Task Force of the Las Vegas Chamber of Commerce.