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March 28, 2024

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Henderson’s budget deficit higher than anticipated

Henderson City Manager Mark Calhoun

Henderson City Manager Mark Calhoun

Henderson Mayor Andy Hafen

Henderson Mayor Andy Hafen

Henderson Councilwoman Gerri Schroder

Henderson Councilwoman Gerri Schroder

The city of Henderson is facing a higher-than-expected deficit — a projected $19 million — in 2012, city financial advisors reported during Tuesday’s City Council meeting.

City staffers presented their monthly financial update, which detailed newly released, tentative state revenue projections for fiscal 2012 that were lower than expected.

The revenue projections, released Feb. 15, showed property and consolidated tax returns for Henderson lower than what city officials had originally estimated. Henderson was anticipating a $13 million deficit prior to the state report, City Manager Mark Calhoun said.

Despite promising signs of a rebound in some sectors of the economy, property values in Henderson have not seen an increase, according to the state report.

The projected property tax revenue for 2012 is $63.7 million, about the same amount the city garnered in 2006 and nearly $20 million lower than its peak in 2009.

The projected revenue from the consolidated tax — composed of six taxes including those on the sale of cigarettes and liquor — is down, according to the state report. The state uses a distribution formula to give allotments of the state tax revenue back to municipalities.

Because of the lower tax revenue, Henderson should expect a $71.4 million allocation in 2012, which is roughly par with the allotment it received in 2004.

“About 10, 15 years ago, when the formulas were being worked out, no one thought we’d be in such a severe economic downturn,” Mayor Andy Hafen said. “It’s unnerving and gut-wrenching to see this.”

City officials said they are still looking at ways to reel in the deficit. Since the recession, Henderson has made $90 million in budget cuts, including staff and compensation reductions and a voluntary employee severance package program. A total of 179 city employees have left Henderson through the voluntary severance program since it was announced in 2008.

“People don’t realize we’ve shrunk our staff so much,” Councilwoman Gerri Schroder said, commending city employees for maintaining essential services. “It’s a lot of work for very few people.”

In light of the new state tax revenue projections, Henderson is looking to partner with North Las Vegas, which is facing a $25 million shortfall, to lobby the Legislature to revise the tax distribution formula and receive a greater allotment.

If the request is heard, it could take until July for a vote, and even if approved, revised tax allocations would only become effective a year later, Calhoun said.

Despite the pessimistic financial news, Mayor Andy Hafen echoed the upbeat tone of his state of the city address.

“I’m going to remain optimistic that better days will come,” he said.

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