Las Vegas expects ‘manageable’ $7 million budget deficit

By Conor Shine

Wednesday, Dec. 7, 2011 | 9:22 p.m.

The City of Las Vegas will likely face an approximately $7 million hole in its general fund budget during the next fiscal year, but city officials are calling the deficit “manageable” compared to previous years.

During a financial forecast presentation to the city council Wednesday, Mark Vincent, the city's chief financial officer, offered a mix of positive signs tempered with the reality that the city’s economy is still struggling in the aftermath of the recession.

Consolidated tax revenue is up and unemployment is down across the city, Vincent said. But income from property taxes is still shrinking, and the city will face about a $7 million deficit in its projected $459 million general fund budget in fiscal year 2013. The general fund is used to pay for city operations, including employee wages and benefits.

“We’re in the neighborhood of a balanced budget,” Vincent said.

The $7 million structural deficit will shrink to less than $2 million for this year only as the city uses a series of one-time fund transfers to help balance the budget, he said. The projected budget also does not include wage increases for employees outside of raises guaranteed through union contracts.

The relatively small gap comes as a relief to city officials, who only a few years ago were struggling with budget deficits as high as $40 million.

The city has cut $115 million in expenditures over three years from its general fund through cost-saving efforts, pay cuts, union concessions and layoffs and is now in a position to close this year’s deficit without having to impact the services it provides, Vincent said.

“There’s been a great deal of sacrifice,” he said, “but there are still things that need to be done.”

Vincent emphasized that the forecast presented Wednesday is not an actual budget, and that it will be up to the city council to ratify a final plan.

In fiscal year 2014, the city will have to revisit the issue of budget deficits, when its obligated funding to the Metro Police Department is expected to increase by $8 million, contributing to an overall projected deficit of $17 million.