Las Vegas Sun

October 23, 2014

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With tax revenue up, Las Vegas could see first balanced budget since recession

With revenues from consolidated and property taxes inching steadily upward, Las Vegas is aiming for its first balanced budget since the recession devastated the region’s economy.

The city has been making cuts to staffing and services over the past five years to drive down costs as revenues plunged during the crash. But those measures haven’t been enough, and the city has been forced to tap reserves to make ends meet. During the current fiscal year, which runs until July, the city is budgeted to draw $10 million from reserves to cover a deficit in its $481 million general fund.

During a financial forecast presented during Wednesday’s Las Vegas City Council meeting, the staff brought some positive news about the state of the recovery and the outlook for future years.

For the first time since 2009, the city is projecting it will bring in more than it spent during its most recently completed fiscal year, which ended in June. Although the city started the year with a projected deficit of $10.4 million, improving tax revenues and other cost savings efforts managed to turn that shortfall into a $10 million surplus.

The budget is looking brighter for future years, too, with total revenues expected to grow by about 4.5 percent in the next fiscal year, compared with a 2.5 percent increase in costs. That growth will be fueled by increases in both the consolidated and property taxes, projected to be between 2 and 4 percent.

The result is a budget shortfall conservatively projected at $2.3 million for next year, a figure City Manager Betsy Fretwell hopes can be eliminated through cost savings or continued improvement in the economy.

“One of my key goals is to turn the corner this year on this budget. We’ll be working really hard to try and mitigate that small deficit that’s left,” Fretwell said. “(We'll) keep our fingers crossed that we can meet your needs and the community’s needs while maybe having a budget that is in the black to start the year with.”

The financial forecast presented Wednesday is an early step in the budget process that will begin in earnest early next year. A final budget must be approved by the City Council by the end of May.

The figures presented Wednesday are only projections and will change slightly before the end of the budget process.

The council seemed heartened by the positive outlook and commended staff members for their work managing the city’s budget over the past several years.

“We’ve been watching our expenditures and our revenues and adjusting appropriately,” Councilman Steve Ross said. “Ms. Fretwell, your team has done an incredible job at recognizing the economy, recognizing places where we can cut and save, recognizing that we’re still trying to provide a level of service that this community expects from us.”

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