Columnist Jon Ralston: Las Vegas economy in a world of hurt

Friday, Sept. 21, 2001 | 5:22 a.m.

Jon Ralston hosts the public affairs program "Face to Face" on Las Vegas ONE and also publishes the Ralston Report. His column for the Sun appears on Sundays and Wednesdays. Ralston can be reached at 870-7997 or by e-mail at ralston@vegas.com

AS SHOCK FADES into sorrow, as horror melts into uncertainty, the reality of what economic carnage those terrorist acts caused here is beginning to crystallize.

Forget previous benchmarks -- the 1991 Gulf War, the 1984 Culinary strike. This is nothing short of a disaster for Las Vegas -- and thus, for the state.

This week, as resorts prepare to lay off thousands of workers and Gov. Kenny Guinn determines how deeply and where he has to slice, all of the war-mongering rhetoric and preaching of religious tolerance can't save jobs and essential services.

The gamers have never been known for their sensitivity or magnanimity -- their charitable donations, including seven-figure gifts to New York City notwithstanding. But with stocks plummeting and tourists staying home, the resorts are planning cutbacks that one executive said could affect 30 percent to 40 percent of the work force.

"These are Wall Street companies," said one insider. "And they are behaving exactly like them."

And thus the always ballyhooed cooperation here between labor and management -- with some notable exceptions from Gondolier Numero Uno Sheldon Adelson and a few others -- is about to be stretched to the limit.

Can the union and the casinos work together to make creative arrangements so people can keep their jobs (and more importantly, their health benefits) and the casinos can keep their doors open? Can the Culinary leadership sell any new deals to their members, who awoke last week to the oxymoronic stories of MGM MIRAGE instituting layoffs while also investing tens of millions of dollars in Intertnet gaming? And what happens to workers not represented by the Culinary? Dealers come to mind, so do front-desk folks.

Some gaming executives believe, as one put it, that the companies "must take prudent steps or collapse," words that might seem hysterical if not for the pathetic occupancy rates, escalating energy costs and the precarious state of the airline industry. "There are so many rumors out there and what if, God forbid, there is another incident," wondered one gamer.

On the bright side, people did seem more willing to fly by the end of the week, and some of the hotels were reporting increased interest in coming here. But how long will it last? How long will anything last?

The strain on state and local governments, some already strapped for cash, could be enormous. People going on welfare, people needing to use the county hospital or social services. And so it will go.

Guinn plans to meet early this week with Senate Majority Leader Bill Raggio and Speaker Richard Perkins to go over the exact numbers. But all three already have a pretty good idea of how bad the revenue picture looks.

The governor expressed concern Friday about the state's legal obligation to provide millions of dollars to school districts and what the real and legal implications are if it can't. Where will the money come from? What actions will the districts take? Will the state eventually have to dip into the Rainy Day Fund?

Guinn remains hopeful he won't have to call a special session -- although one insider placed the chances now at 50-50 -- but said if the Rainy Day Fund needs to be tapped, he will have to call lawmakers to Carson City. And you can be sure there will be 63 different opinions on where to cut, where to spend money, where to find new money.

Guinn has, naturally, said any tax increase is off the table to help fund needed services. But critics will say if the state had weaned itself off its reliance on gaming revenues when it first should have -- at least a decade ago -- there would not be this problem. When you're a one-horse state and the one horse breaks down, what do you ride?

Las Vegas Mayor Oscar Goodman probably thought he was helping when he urged the casinos last week in a letter to "carefully consider the ramifications before you reduce your staff." Goodman's warnings of a "socio-economic disaster from which recovery would be difficult" may be prescient. But his admonition to the casinos to "bide the tide" (now there's an expression I've never heard) is likely to provoke angry, if mostly private, fury at His Honor, who may please the workers but probably won't accomplish much.

Optimists are whispering that, barring anything unforeseen, Las Vegas could rebound by the middle of next month. But by then, much damage could have been done to Nevada's economic security, labor-management relations and state and local government budgets.