With Detroit filing for bankruptcy July 23, is there anything we southern Nevadans can learn from the city’s travails?
The obvious parallel is North Las Vegas, which has teetered on the brink of a similar situation. In 2012, the city declared a fiscal emergency, which allowed it to wriggle free of pay hikes and overtime mandated by union contracts. In May 2013, North Las Vegas passed a budget designed to cut another $18 million, and after closing its detention center, reducing overtime for firefighters and cutting staff, City Manager Tim Hacker—an appropriate name when you have to slice up a budget—said more staff cuts or winning concessions from unions are all that’s left.
North Las Vegas doesn’t have quite the same problems as Detroit. The Motor City lost hundreds of thousands of residents from its urban core while North Las Vegas grew rapidly. While Detroit’s problems aren’t due entirely to its employee contracts (the average municipal retiree’s annual pension is just $19,000), North Las Vegas certainly can blame some of its troubles on deals it has made with workers. Yet North Las Vegas does have a few things in common with Detroit, and they should give us pause.
For one thing, neither city has benefited from what could be called enlightened leadership from politicians. One of Detroit’s recent previous mayors, Kwame Kilpatrick, went to prison and is supposed to head back. North Las Vegas saw a former councilwoman go to prison for what she did as a county commissioner, and while political corruption hasn’t gotten a lot of attention there, it has been a fact of life for decades.
But corruption isn’t the only political problem. Last year, when North Las Vegas declared a fiscal emergency, a union official called it “a typical right-wing philosophy.” For more than 15 years, the mayors had been conservative Mormon Republicans—first Michael Montandon, then Shari Buck—followed by the new mayor, conservative Mormon Democrat John Lee. Ideologically, they have tended to believe what Nevadans of all stripes too often have believed: that there are only two kinds of bad growth, no growth or government growth.
North Las Vegas also has had an odd political division through the years. The Mormon Church, whose members usually vote conservative, has been a dominant force. So has the African American community, which is more liberal. Both groups have done their best to appeal to the powerful police union, which back in 1976 pushed through the recall of three of the five councilmen and has been a force ever since. And voting by ward didn’t exist until 2000, meaning North Las Vegans voted for council members at large. That situation reduced the ability of any group to control a particular seat on the council, but it also enabled any of the groups to dominate the council at a given time. Today, the scars of those battles—the failure to sustain a policy that built up the old downtown core, the distrust that grew between factions—are still affecting the community.
When it comes to economics, Detroit is the engine of its region; North Las Vegas is not. So, North Las Vegas’s problems don’t necessarily bring down an entire area, as Detroit’s do.
But there are similarities between Detroit’s economy and that of our valley. The late historian Hal Rothman used to call Las Vegas “the last Detroit” because it was the “last bastion of remarkable prosperity for the unskilled made possible by unionization, the artificially low cost of living, and the elixir of life in Las Vegas, the tip.”
Unfortunately, southern Nevada, like Detroit, put all its eggs in one basket. The auto industry’s failures have had a lot to do with what afflicts Detroit, and relying on tourist dollars made Nevada, and especially southern Nevada, ground zero for some of the most devastating effects of the Great Recession.
Detroit didn’t learn and never did. Indeed, it was Richard Bryan, a U.S. senator from Nevada (1989-2001), who pushed for higher fuel economy standards on automobiles, and his congressional colleagues from Michigan who cut him off. As governor in the 1980s, Bryan made economic diversification his mantra. Others have spoken the same words, but without the melody, and a quarter of a century after Bryan left the governor’s office, we remain overdependent on one industry. Detroit can teach us a lot about where that leads.