It’s North Las Vegas’ turn in budget morass

By Mike Trask (contact)

Monday, Jan. 12, 2009 | 2 a.m.

A month after Henderson announced $28 million in budget cuts and a buyout program for its most experienced employees, the suburban city at the other end of the valley is taking steps to combat its own economic crisis.

North Las Vegas — like every other municipality in Southern Nevada — is staring at the results of a sharp, recession-caused drop in consolidated tax revenue.

North Las Vegas has a $15.6 million budget shortfall this year. The city continued its hiring freeze to save $9 million and cut all department budgets by 3 percent, totaling $6.6 million this year, said Phil Stoeckinger, finance director.

City officials say residents should not notice any effects of the cuts, which came mostly from supply budgets. The city also didn’t buy some vehicles.

The city, the third largest in the state, also is working to trim nearly $23 million from the 2009-10 budget.

The hiring freeze will continue, saving another $9.7 million next year, and department budgets will be cut another 6 percent, saving about $13 million.

Stoeckinger said the city will delay several projects as the recession takes its toll. City officials will meet this week to prioritize projects.

“If this worsens we’ll have to discuss renegotiating contracts with (union) bargaining units,” Stoeckinger said.

One project that will almost certainly be discussed is the $156 million new City Hall that has been planned for Las Vegas Boulevard North. The nine-story building is scheduled to open in 2011.

Construction has not started, although the city has purchased 12 acres where a mobile home park used to be.

The cuts come following more than a year of falling tax revenue across the valley.

More than 90 percent of consolidated taxes come from sales tax. With consumers cutting back, less money is finding its way to the city coffers.

North Las Vegas is projecting revenues to fall from $50.2 million to about $46 million this year — a drop of more than 8 percent.

Consolidated tax revenue is more than 25 percent of the city’s general fund budget.

Henderson, the second largest city in the state, has faced similar woes. The city is projecting an 8 percent drop in tax revenue.

The financial problems are compounded in both cities by the foreclosure crisis, which has left thousands of homes vacant and cut into property taxes.

Henderson has responded with a hiring freeze, budget cuts and a buyout offer to the city’s most experienced employees.

Henderson must cut $28 million in the current budget and is aiming to chop at least another $20 million over the next five years.

To compound matters, the suburban cities are also worried about the state’s $2.3 billion shortfall over the next two years.

The state has some control of nearly 90 percent of budget funding in Henderson and more than 80 percent in North Las Vegas.