At the Economic Forum meeting the committee heard reports on the overall condition of Nevada's economy and then specific projections on revenue streams for 2011, 2012, and 2013. While mining revenues are very strong, all other aspects of Nevada's economy are still weak. The general consensus is that the state's economy has stabilized, in other words hit bottom, but there is also consensus that our economy will not be able to improve just by waiting for our depressed industries to rebound.
This is evident when you look at what is behind the leading indicators. The unemployment rate has gone down, yet not because of job growth, but instead from people moving out of the state. The housing market is seeing increased traffic, but sales are still bad due to high foreclosure rates and the loss of high paying jobs. Current home purchases are mostly being made by large investors who are buying up distressed houses. Room taxes are up, but gaming taxes are down due to more people coming to Vegas to do things other than gamble. As was noted, Asian casinos as well as gaming in many states now directly compete with Nevada. Mining taxes for 2011 will be up, but mining taxes for 2012 and 13 will be down due to the sun-setting of the 2009 taxes.
Over and over again it was apparent that Nevada's economy is built on a foundation of sand that is being slowly eroded out from under our feet. We cannot hope to regain what we've lost because it cannot return. This is especially the case with the construction industry and jobs. The boom conditions were never sustainable.
In addition to the high foreclosure rates and slow job growth, the other major downward pressure noted by more than one analyst was the loss of current jobs. In this area it was the loss of public sector/government jobs that were mentioned. Our economy will not improve overall if jobs that currently exist disappear as they will offset any future, privately created jobs. The short-term bottom line is two-fold: the need for increased number of visitors as well as the capacity for residents to increase spending. Without both none of the revenue streams, with the exception of mining, will improve enough to pull us out of recession and put us into recovery.
The Forum voted to accept new, increased projections of $217.6 million. To improve that number please contact your legislator and ask that the 2009 revenue enhancements not be sunsetted and that other sources of more stable revenue be included.