LV, Henderson cautious about economic future

WASHINGTON -- Las Vegas and Henderson are two cities benefitting from the nation's strong economy and Southern Nevada's tremendous growth, according to a report released Tuesday by a municipal advocacy group.

The report compiled by the Washington-based National League of Cities paints a positive short-term financial picture for the nation's cities saying they are doing better now than at any point in the past 15 years.

But the group warns against the escalating fiscal decay of local governments if state and federal governments continue to horde revenue from taxable products for themselves.

The group said seven out of 10 cities were better able to meet their financial needs in 1998 than 1997, and more than 60 percent of the 314 cities surveyed will be better off financially in 1999.

Las Vegas and Henderson both responded favorably to the NLC survey used for the report, but the chief financial officers for both cities also expressed caution that the prosperity will not last forever.

"It is nice living in one of the fastest growing areas in the country," said Mark Vincent, director of finance and business services for the city of Las Vegas. "I think for the short-term the city is still going to continue to do well."

Steven Hanson, director of finance for the city of Henderson, said the city's finances are in good shape and Southern Nevada's growth boom has had a positive effect on his community.

"I think we are a very financially secure city," Hanson said. "If the economy continues to grow at the rate it is, it will mean a lot of good things for Henderson."

However, Hanson said, the tremendous growth does have some drawbacks on his city's treasury and points to the Lake Las Vegas subdivision being built in eastern Henderson as one such example.

Hanson praised the subdivision's developer for agreeing to build a $1 million fire station and purchasing about $700,000 worth of equipment to service the sprawling commercial and residential development. But, he added, the city will have to find funding to hire 36 firefighters needed to man the new fire station.

Don Borut, executive director of NLC, described public safety as one of the "pressure points" that constantly pull on the purse strings of larger cities' budgets.

Las Vegas, too, is having to pay for the price of expansion. The city has received $824 million in total government funds since 1996 and has spent $702 million.

However, Vincent said, the city is not expected to reap such a windfall this year because it will use most of the surplus to pay for new roads, flood control and construction. For example, fiscal year 1997 Las Vegas posted a surplus of $81 million, but Vincent said it will fall to $12 million this year to pay for the public works projects.

Both Vincent and Hanson said they were concerned by the growing trend of people purchasing services and products through the Internet that are not currently subjected to local sales tax. Much like any local government, Las Vegas and Henderson rely on the revenue generated by a sales tax. As the information age continues to evolve, both said they would like to see the federal government look into sharing some revenues generated by online commerce.

Borut said the his group will lobby to make sure the cities receive their fair share of future tax revenue derived from the information age.

"Growth in the economy is in the areas of technology, information and health communications," Borut said. "If that is where the economy is growing and that is where the jobs are, what we need to do is to find an equitable and fair way to generate revenue off of that part of the economy that is growing."

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