A wake-up call

Sunday, March 14, 2010 | 3:06 a.m.

Like every other municipality in the state, Las Vegas is dealing with a looming budget shortfall that will require significant budget cuts. To close a $70 million budget shortfall, city officials say they will have to lay off 146 workers unless the employees’ unions renegotiate their contracts to cut costs. The unions, so far, have been reluctant to budge.

So, during a City Council meeting last week, Las Vegas Mayor Oscar Goodman proposed firing the city’s union workers and then rehiring them with lower compensation packages. He was immediately blasted by representatives of three employee unions. Goodman was called a “bully” and the legality of his proposal was questioned.

Some people have suggested that Goodman wasn’t really serious, and that he was using this as a negotiation ploy. Perhaps. Goodman has never missed an opportunity to make a headline, but that misses the point. The city is in a difficult financial position, and it has to make cuts. The unions have a choice — renegotiate or suffer layoffs.

No matter what they decide, it is clear the lucrative contracts that unions have negotiated over the years, with the blessing of city leaders, have to be reworked. The contracts are simply not sustainable.

Studies have shown that the pay-and-benefits packages of local government workers in Southern Nevada are above average for other public employees across the nation and for workers here in the private sector with comparable jobs.

To try to avoid layoffs and protect city services, the city has asked the unions to give up scheduled salary increases in the next fiscal year and take an 8 percent cut to their compensation packages. Although a similar cut is expected the following year, the city says it is now only asking for cuts in the fiscal year that starts July.

The unions have yet to show that they understand the city’s financial situation. They are fighting the cuts, including the annual cost-of-living increases. Chris Collins, the head of the union that represents the city’s marshals, complained that if cuts are made in the next two years, the average marshal’s pay will be $58,000 a year. “They can’t live on $58,000,” he said, adding that that salary “puts them in bankruptcy and foreclosure.”

Seriously? They can’t live on that? That is more than the median household income in Clark County and a wage that many people would be thrilled to accept. Granted, employees currently living on substantially more would have to make major lifestyle changes if their paychecks shrank dramatically, but the city isn’t specifically asking for wage cuts. City officials have asked for an 8 percent reduction in total compensation, meaning the unions could give up other kinds of pay. The city provides a generous retirement contribution to its employees, which could be cut, and the city’s health benefits could be trimmed as well.

No one likes to see their compensation decreased, but it is better than layoffs. Perhaps the unions’ leaders haven’t noticed, but times are tough.

The Great Recession has sent millions of Americans to the unemployment line. Nevada has been particularly hit hard and has the second-highest unemployment rate in the nation at 13 percent.

Millions of other Americans have seen their pay and benefits cut, particularly in the private sector. All the things the unions enjoy — automatic cost-of-living wage increases, employer retirement contributions and generous health plans — are now rare in the private sector.

Reality has changed and it is time for the unions to admit that the city can’t afford the big contracts. If the unions choose to take the layoffs, it will hurt the city’s ability to provide services to the taxpayers by reducing staff and worsening the economic situation in Southern Nevada by sending more people into unemployment. The unions should work with the city and make the cuts for the good of everyone involved.