‘Thoughtful action’ on city budget

The Las Vegas City Council met in special session on Monday to discuss the current budget conundrum facing the state and local governments.

The conclusion: With revenues lagging behind projections, the city -- along with Clark County, Henderson and North Las Vegas -- will just have to suck it up.

"It's just a business cycle we're going through, said Finance Director Mark Vincent. "The question is, 'How long?' "

According to numbers bandied about at the meeting, the city can expect to trim about $16 million from its projected budget this fiscal year. Sales tax revenues -- which provide half the city's budget -- are below expectations, and property tax revenue is expected to flatten.

Mr. Vincent said the city may soon freeze open positions, saving as much as $16.2 million, and kill some $5.3 million in one-time spending items to help offset the coming deficit.

As the city deals with its predicament, Gov. Jim Gibbons is preparing to adjust spending plans at state agencies by as much as 10 percent to make up for lower-than-anticipated tax collections.

But while the governor faces intense heat from critics over the potential cuts, city officials faced few angry constituencies on Monday when they put the best face forward on their circumstances.

"This is not a time for gloom," said Mayor Oscar Goodman, adding that the city must "prepare for thoughtful action in the future."

The mayor is correct. And the type of "thoughtful action" necessary to spare taxpayers in the long run is for the city to more aggressively negotiate its various union contracts -- and to include a clause in such deals allowing for personnel costs to be put back on the table in the event of a fiscal meltdown.

Employee salaries and benefits make up a majority of city operational costs -- and these outlays have been growing faster than revenues of late. Between 2006 and 2007, city personnel costs jumped 13 percent while tax receipts went up just 3 percent. City employees enjoy generous regular raises not available to most in the private sector.

Less than a decade ago, a handful of city officials -- elected and otherwise -- met with the Review-Journal editorial board and admitted that Las Vegas faced dire fiscal consequences if the issue of soaring personnel costs wasn't soon addressed.

Since then, as you can imagine, little has been done -- which only serves to exacerbate fiscal downturns like the one Nevada and its local governments are now experiencing.

So, yes. Let's "prepare for thoughtful action." But if such action doesn't include a serious effort by city officials to gain control over spiraling personnel costs, the current budget pain will feel like a hangnail compared to the eventual hemorrhage.