Projecting a $24.9 million deficit to Las Vegas’ general fund budget for the upcoming fiscal year, city officials have called for a “belt-tightening” approach in managing the city’s finances.
“We have some fiscal challenges this year,” City Manager Mike Janssen told the City Council Wednesday. “Those fiscal challenges can be summarized by three primary ones.”
“One is the Badlands settlement that does require some belt tightening that you will see in this budget,” he added as he presented a tentative spending plan for fiscal year 2026, which kicks off this summer. “It has a significant impact on our general fund reserves.”
The second fiscal challenge is a higher-than-expected city-funded increase to public employees’ retirement benefits of between 19.25 percent and 58.75 percent, according to city officials.
The third is a decline in revenue from consolidated taxes, Janssen said.
The so-called “C taxes” include fees collected by the DMV and certain sales taxes. The consolidated taxes this fiscal year saw a $7 million deficit, according to the presentation.
“Of all of our sources of revenue, the C tax is the most volatile,” Janssen said. “And that’s because that C tax is very dependent on what’s happening internationally and nationally as it relates to visitation; to our community as a whole.”
The city is expected to collect $855.7 million in revenue to cover $880.6 million in expenditures for the general fund during the next fiscal year, a shortfall of $24.9 million, according to a presentation.
The overall budget consists of seven funds. Las Vegas is presenting a balanced budget to the state, said a city spokesperson, adding that any deficit will be covered by city reserves.
The City Council voted to push forward the tentative budget of $2.3 billion, which will now be reviewed by the state before it comes back for a final vote on May 21.
No additional hiring freezes or layoffs planned
Earlier this year, the city reached an agreement to EHB Cos. $286 million to settle lawsuits related to the defunct Badlands golf course.
The agreement called for a $250 million payment before May 20, with the remainder to be paid on or before July 1, the first day of the upcoming fiscal year.
To help offset settlement costs, the city offered voluntary buyouts, which 21 employees accepted. Their positions were frozen and will remain so for 2.5 years, saving the city $6.1 million, Janssen said.
There are no additional hiring freezes or layoffs planned, he said.
“We are hiring,” said Janssen about other open positions.
The city is also using funds raised from the recent $36 million sale of Cashman Field and paused several capital improvement projects to the tune of about $50 million.
Janssen said the city had been preparing during recent years for a potential Badlands expenditures.
City departments were asked to identify cost reductions between 5 percent and 10 percent and to minimize requests for additional funding, Janssen said.
“This year, we had to make sure we funded all the ‘must haves’ and a smaller amount of the ‘nice to haves,’” Janssen said.
Public safety ‘priority’
Just over one-fifth of the $880 million general fund in the next fiscal year will go to fund the Metropolitan Police Department, which asked for a 2.8 percent increase, according to the city, which funds the agency along with Clark County.
Overall, public safety accounts for 58.7 percent of general fund expenditures. The next most costly expense is $393 million for salaries and employee benefits.
Contact Ricardo Torres-Cortez at rtorres@reviewjournal.com.
