Nevada budget experts worry about economy if stimulus funding ends
One of Nevada’s top fiscal analysts said he is worried about the impact on Nevada’s economy if the federal stimulus isn’t renewed.
Jeremy Aguero of Applied Analysis said huge amounts of CARES Act money delivered to Nevada undoubtedly “buoyed up” the state’s economy by providing cash for unemployment recipients and small businesses to spend during the economic shutdown that shuttered large numbers of businesses. That included $9.7 billion in direct aid to benefit recipients paid out in addition to their weekly state unemployment checks and to small businesses.
As a result, he told the Economic Forum on Thursday, people furloughed or laid off had a large amount of disposable income despite being out of work. He said three-quarters of them used the money for household expenses, food, rent, and vehicle payments. But he said taxable retail spending was actually higher than during the great recession decade’s back, propping up all sorts of retail and, especially online spending.
Without added stimulus funding, Aguero said, “that will not be sustainable.”
Several people, including members of the five-member forum, said the projections they make in December for the revenues lawmakers and the governor must use to build the 2022-23 general fund budget will be impacted by how much Nevada’s economy is held up artificially by the loss of those stimulus dollars.
The forum projects those revenue streams.
He and others including Steve Hill, head of the Las Vegas Convention and Visitors Authority, said some parts of the economy will take much longer than others to come back. He said visitation in the Las Vegas area is down 57 percent and recovery will be especially difficult for the conventions, association events, and trade shows that brought 6 million to Las Vegas in 2019.
“It’s starting to recover but functionally, it’s really not in existence right this minute,” Hill said.
The problem there is air travel.
Forum Chairman Craig Billings said the question is, “how to get people comfortable getting on a plane.”
But Hill said the Southern California drive market has recovered because people are more comfortable visiting by car than by air.
Jennifer Cunningham of the Reno Sparks Convention and Visitors Authority said car traffic has largely recovered in the north as well.
But the data indicates that many convention groups are reviewing their plans for the coming year. Since associations and trade shows make money from those events, they have more incentive to find a way to hold their annual gatherings.
Caleb Cage, who heads the governor’s COVID response Task Force, said the key is getting an effective vaccine.
He said right now, the number of cases is again increasing in Nevada and, at this point, “we don’t know where the ceiling of that trend is.”
“Projections will be impacted by the development of a vaccine,” said Cage.
He and Julia Peek of the Health and Human Services Department as well as other experts said they are all hoping an effective vaccine is available next spring.