Las Vegas Faces Rising Pension Liabilities, Earning a “C” Grade

Las Vegas’ financial condition worsened in fiscal year 2023, with the city facing a $123.5 million shortfall. This equates to a Taxpayer Burden™ of $500, earning Las Vegas a “C” grade and classifying it as a “Sinkhole City” in Truth in Accounting’s latest report.

Despite reporting a $159.5 million revenue surplus, Las Vegas’ financial position declined by $20.9 million due to increasing pension liabilities. The Public Employees’ Retirement System saw unrealized gains of 9.2% on investments and made contributions to the pension fund, but these efforts were not enough to offset the rising costs of accrued benefits and interest.
The city relies heavily on property taxes ($175 million) and state-shared taxes ($428 million), which together account for nearly 49% of total governmental revenue of $1.23 billion. While these funds are essential for balancing the budget, the growing pension liability presents a challenge to the city's long-term financial stability. On a positive note, Las Vegas’ unemployment rate dropped to 6.3% as of June 2023, though it remains higher than the U.S. average of 3.6%.
Key findings from the report include:

• Las Vegas had $1.4 billion available to pay $1.6 billion in bills.
• The city’s financial shortfall amounted to $123.5 million, leaving each taxpayer with a $500 burden.
• Rising pension liabilities remain a significant concern despite strong revenues and reduced unemployment.

Las Vegas must manage its growing pension obligations while ensuring long-term financial stability. Strategic financial planning will be critical in maintaining the city's fiscal health.

For those interested in a deeper dive into Las Vegas’ finances—and how it compares to other major U.S. cities—you can read the full Financial State of the Cities 2025 report here.