State’s economy on mend, experts say
Experts told the Economic Forum on Monday that Nevada’s economy is recovering – albeit slowly – with improvements in most sectors.
General Fund revenue collections for the 11 months of this fiscal year through May 31 were $58.9 million, or 2.7 percent above the forum projections made during the 2011 Legislature, according to the analysis presented by economists with the state Legislative Counsel Bureau.
Among the major revenue sources, sales tax, gaming taxes, the modified business tax and gaming/live entertainment tax collections were all above projections. Only the insurance premium tax and real property transfer tax were below projections. The projections are used to build the current state budget.
All the minor revenue streams together did much better, raking in $11.4 million more than projected – 8.8 percent.
For the General Fund’s two largest revenue generators, taxable sales are up 7.2 percent and gaming revenue is up 3.9 percent. Taxable sales have now increased for 21 straight months.
Gaming Control Board Chairman Mark Lipparelli told the forum that Nevada casinos’ gaming revenues have been up 12 of the last 16 months and were up 6 percent for April. When baccarat is taken out of the mix, he said, the numbers show a slow but positive trend upward.
At the same time, economist Bill Anderson of the state Department of Employment, Training and Rehabilitation said unemployment rates continue to slowly decline. He said April’s rate was 11.5 percent – the lowest in three years.
Anderson said there has been much talk about the unemployment rate being underreported because those who stop looking for work aren’t counted. He said the actual percentage of those without jobs may be as much as 22.3 percent, but only half of that number represent the discouraged who aren’t looking and the part-timers who would like full-time work. He said the other half is the increasing number of baby boomers who are retiring.
From its peak, he said, Nevada is down about 160,000 jobs, but the construction industry accounts for about 100,000 of those lost jobs.
Overall, Anderson said, the private sector has added some 12,000 jobs. But that is being offset by continued losses in construction fields and reductions by state and local governments. Some 14,500 local government jobs have been cut statewide, along with 2,000 state positions.
Mining Association Director Tim Crowley said that industry is doing extremely well, adding 2,500 jobs in just the last two years. Mining now employs some 16,000 people and expects to add another 1,500 this year.
While it accounts for just 1 percent of employment, the industry’s gross domestic product is $6 billion a year, and the average worker in mining makes $83,000 a year.
John Stater of Collier’s International, a commercial real estate firm, told the forum that commercial real estate may see some construction in the near future. He said that there are numerous vacant commercial buildings, but that they aren’t what incoming businesses want.
“Even with the vacancy rate in the (Las Vegas) Valley, we’re liable to see some construction,” he said of the area that was hit hardest in the real estate crash.
Brian Gordon of Applied Analysis said the residential real estate market is still overbuilt in the south.
The reports were designed as an update for the newly reconstituted Economic Forum. No projections were made at this meeting.
In December, the five-member panel will meet to project all of Nevada’s revenues for the next budget cycle. Those projections must be used to build the state budget.
Gov. Brian Sandoval reappointed three members: Matt Maddox of Wynn Resorts, Linda Rosenthal of IGT and Ken Wiles of Acceleron Group. The new members are former Las Vegas Finance Director Marvin Leavitt and Chris Nielsen, chief financial officer of online retailer Zappos.