The long view

The long view

Washoe County is planning for another 10 years of recession

The county government is making budget plans based on the assumption that Nevada’s economy will not recover in the foreseeable future. The working assumption is that recovery is a decade away. That stance is drawing praise for its realism.

Washoe County’s Organizational Effectiveness Committee (OEC) commissioned a study of how to cope with budget problems during a decade-long recession and will get the results of the study on Aug. 9.

“I don’t pretend to be an economist, but everything I’ve read and heard indicates that we will be one of the last states to recover,” said John Breternitz, who chairs both the Washoe County Commission and the OEC.

That view contrasts sharply with the public statements of most other politicians. Many state and local leaders have constantly engaged in boosterish rhetoric about the condition of the economy that has borne a strained resemblance to reality.

The study is being done by Management Partners Inc., an Ohio and California consulting firm. It surveyed 1,800 county workers as part of the study, which is expected to recommend numerous specific proposals for increasing revenue—such as renting out jail cells to other jurisdictions—and cutting expenditures.

Nevada Taxpayers Association director Carole Vilardo said Washoe County is making some good decisions in taking such a long view.

“I hate to think that that [a long Nevada recession] would be the case, and you want to believe that it won’t take that long, but planning for that far out is a very smart thing to do,” Vilardo said. “It is always going to be easier to amend a budget to increase spending than it is to reduce a budget. So if you’re looking right now at the measures you have to take over this period and how you’re going to have to operate, I think that’s very wise.”

There could be some election campaign drawbacks to this stance, with challengers accusing county commissioners of showing a lack of confidence in the local economy. In May, the business administration school at the University of Miami released a study indicating that economic recovery is stronger in states where surveys show the public to be more optimistic.

Vilardo said if the process is open to the public, it will reduce those political risks.

“You have to hope at this point that the public understands, that [county officials are] able to articulate why they’re doing what they’re doing and that the process they use for this planning is very transparent,” she said. “I think if that happens, then you have people who can look at it and might not agree—but my experience has been when they understand the issue, whether they like it or not, they’re more receptive to the consequences that had to be imposed.”

Vilardo is more accustomed to local governments looking about a year down the road.

Political scientist Fred Lokken said he thinks campaign liabilities from this process are unlikely. What should be of greater concern, he said, is whether the county government does the kind of scrutiny of its operations that is necessary as part of that process. He’s not confident that OEC and Management Partners Inc., are up to that.

“What’s more problematic for me are, then, the decisions within county government, with limited resources, what services you offer. And the question would be, ‘How efficient is Washoe County government?’ That’s the part that I think has more political liability and not the decision to be realistic about the slowness of the recovery. But have they been doing a thorough job of making sure every one of the 34 departments of the county government are as efficient in the use of their funds as they can be? I don’t think they’ve done that.”

He said county officials tend to put too much trust in—county officials.

“They have that group of businessmen [the OEC], and they’ve hired a consultant, but they’ve really relied on agency heads or department heads to tell them that they’ve cut what they can do. And I think that when you have the bottom drop out like it has for a government as large as Washoe County’s government, a complete reevaluation of every department would have been the more pragmatic step rather than simply trusting an agency head that they did the best job they could, and this is what they’ve got. I think of the sheriff right now, or I think of the D.A. right now. Both of those are touted as core services of the county. Both of those, of course, are incredibly important to us. But are they as efficient as they can be, given the moneys that we no longer have? They generally accept at face value the statements by the D.A. and by the sheriff that they’ve made the right cuts and that’s as much as they can do.”

He said, as an example, that there are still arraignments handled by deputies taking defendants to courtrooms, which eats up deputy time and fuel compared to video arraignments.

There is surprisingly wide acceptance of the scenario that Nevada will not recover in the foreseeable future.

This month IHS Global Insight, an international economic forecasting firm, put Reno at the top of a list of cities likely to take a decade to recover economically (“Reno: A decade to recover,” Upfront, July 14). Factors were the steady decline of Nevada gambling under pressure from California tribal casinos and the resulting ill health of the state’s construction industry.

Chuck Alvey, who tries to lure new business to the area as head of the Economic Development Authority of Western Nevada, is also a member of the county’s OEC. He said he could not fault the IHS prediction.

“I don’t know for sure but I don’t think they are too far off. … Frankly, I would not argue with them. There’s just so many unknowns.”

Breternitz said he accepts that Nevada will be in recession “for the foreseeable future, without a doubt. I would say at least five years.” He also said most of the economic information he has read indicates Nevada will be in recession longer than other states.

Historian Guy Louis Rocha, who believes Nevada is in a period similar to the long depression that followed the collapse of the Comstock mining boom, has been critical of political figures and journalists for “pulling their punches” and putting an upbeat spin on economic news in the state, saying it deprives the public of full knowledge of the state’s difficulties. He praised Washoe County for not doing the same.

“That kind of realism needs to be out there,” he said. “People need leadership.”