State gets blame for inflated pay
The solution to the financial difficulties cited by local governments in their campaign to raise your property taxes should be simple. Reduce compensation for the thousands of employees making $150,000, $200,000 and $250,000 a year by 5 to 10 percent.
Boom. Here come the budget surpluses.
But local government officials don’t have that option — thanks to rules imposed by state lawmakers.
State law mandates that local governments engage in collective bargaining with unions representing local government employees. Tellingly, Nevada doesn’t allow state employees to collectively bargain because it would cost too much.
Collective bargaining sounds like no big deal. All employees negotiate their wages. When we negotiate, though, our employer makes an offer based on the market. If a local government and union can’t come to an agreement, the case moves to potentially binding fact finding or binding arbitration, where the factors considered include the financial ability of the local government to provide raises and how much is paid to other government employees, both in Nevada and high-cost states like California.
This is like telling your boss that he has to pay you more because the company has a big financial reserve and employees with a competitor in San Francisco are earning more.
During Las Vegas’ boom years, local governments doled out lavish pay increases. A 2006 contract with Las Vegas police officers included 10 percent total yearly raises for four straight years. Totally unsustainable, but would the result have been much different if the contract had gone to arbitration, where a determining factor would have been the ability of Clark County and the city of Las Vegas to pay?
Local government officials face a Catch-22. They should acknowledge that the system is broken and demand that state lawmakers reform it. Off the record, local government officials will say it. But Democrats control the Legislature and are backed by union campaign contributions, endorsements and volunteers. Reforms go nowhere in Carson City. Local governments that want reform rightly fear that unions would retaliate by pressing for even higher pay increases. When Republicans controlled the Legislature in 2015, they passed some reforms but balked at making collective bargaining optional — or eliminating it entirely.
So now local government officials are at the Legislature asking to raise your property taxes. Even if they succeed — which isn’t likely — their budget deficits are sure to come back. As soon as local governments collect more in taxes, they have an enhanced ability to afford raises. This leads to more expensive union contracts, which produce budget deficits and future calls to raise taxes again.
It’s the Nevada way. Victor Joecks’ column appears in the Nevada section each Monday, Wednesday and Friday. Contact him at vjoecks@reviewjournal.com. Follow @victorjoecks on Twitter.