It would be easy to perceive the city's plan to buy out some employees as a sign of economic panic. After all, there are unmistakable dark clouds on the horizon of Carson City and the nation.
But rather than be alarmed, residents should gain a measure of confidence from the buyout plan. A long-held criticism of government is that it often operates in a vacuum, ignoring good business sense and spending more than it can afford. The result in some communities has been severe cuts in service and crisis-style management.
But any business that wants to stay solvent reacts quickly when those dark clouds appear. In this case, the trouble comes in the form of a drastic drop in sales tax revenue from auto dealers, a cooling housing market and a general economic uncertainty that might convince consumers to spend less. And if people stop spending, the impact on a city that relies on sales tax for 45 percent of its revenue could be devastating.
City leaders approved the buyout plan after hearing the amount of money available for vehicles and equipment will drop from more than $4 million to roughly $1 million during the next fiscal year. Employees taking the buyout offer would receive up to $25,000 to leave.
Will it mean a reduction in service for city employees? That's something to keep an eye on, but the city's stated priority is to preserve public safety.
At the same time, the city is taking another business lesson to heart, and that is the importance of diversification. Work is under way to encourage other types of retail to reduce the reliance on auto sales taxes.
There's no way to know how this will work out. It's even possible the economy will reverse course and bring sales tax riches to the city. But if not, at least the city will be prepared.
Maybe if the federal government, and even Ford Motor Co., for that matter, had as keen a business sense, they'd be in much better shape financially.