Numbers tell the story, either good or bad, about Nevada’s ranking compared to other states, and this year the numbers indicate a slow but steady economic recovery that has the Silver State moving from eighth place to 11th in percentage of foreclosed homes and third place to sixth in unemployment.
However, Nevada continues to lag behind other states in factors such as education and crime statistics, which affect the quality of life for residents as well as the state’s ability to diversify its economy by attracting new businesses. Looking at these numbers show where Nevada started and where it is now, but it’s up to Nevada’s citizens, businesses, communities and lawmakers to decide where the state will go from here.
TRAVEL & TOURISM
Numbers in all categories related to travel and tourism are up from last year, which is good news for the entire Nevada economy. The leisure and hospitality industry is directly responsible for nearly 27 percent of the state’s jobs, and the state budget relies heavily on revenues from gaming, conventions and tourism. Although economic development agencies are working hard to diversify the Nevada economy, for the time being at least, a healthy Nevada economy depends on tourists bringing in their entertainment and gaming dollars.
Even with a myriad of solutions proposed by Nevada educators and legislators, the state continues to rank at or near the bottom in education rankings. This year Nevada has come in last in at least one ranking and second to last in another. The Silver State’s students rank lower in standardized tests than those in other states and are more likely to drop out of school. Root causes for Nevada’s continued education woes include the transient population, service economy and a high percentage of children whose first language is not English. Many believe the Nevada School Choice program is one step to helping fix the system. However, it’s also recognized that more needs to be done with some possible solutions including teacher accountability and revamping the state’s administration-heavy education structure.
In mid-year 2015, Nevada’s unemployment rate was 6.9 percent, the third-highest in the nation. This year, employment is up in nearly all sectors of the economy and the rate dropped to 6.1 percent. Construction employment, driven by the recovering economy and a rebound in homebuilding, led the way with an increase of more than 10 percent over last year’s numbers. Due to falling prices for precious metals, mining employment has shown steady declines for the last three years, adversely affecting Nevada’s rural communities. Nevada is now tied for sixth place in unemployment, and indicators point to the state being headed in the right direction.
The average Nevada resident pays out more than $4,000 to state and local government agencies each year, which compares favorably to other states, putting Nevada in seventh place overall. The absence of a state income tax is one reason for the state’s high ranking. As for business taxes, the Tax Foundation ranked Nevada fifth in business tax climate, which is down from third last year. However, fifth place is still low enough to make Nevada attractive to businesses looking to relocate from high-tax markets.
Nevada’s housing industry continues to improve from its disastrous crash nearly 10 years ago. Home values are up across the state, residential developers pulled nearly 18 percent more permits this spring than last spring and construction employment is on the rise. Last year, 2 percent of Nevada’s home mortgages were in foreclosure, a number that fell to 1.3 percent this year. Although Nevada still ranks first in home mortgages considered “seriously underwater,” the actual percentage fell from 25 percent in 2015 to 22.6 percent in 2016. While concerns about home mortgages linger, the housing market appears to have turned a corner.
Nevadans are less healthy than their counterparts in other states according to national rankings, which take into account not only general health measures, but also insurance coverage and access to quality medical care. However, this year’s rankings are slightly better than last year’s, when the Silver State ranked 38th overall. In addition, the effects of the Affordable Care Act may have not yet been realized in many indicators. Meanwhile, Nevada’s medical schools, hospitals and administrators are working to improve the health of Nevada’s citizens.
COST OF DOING BUSINESS
According to The Boyd Company, which tracks statistics such as payroll costs, lease rates, business taxes and workers compensation, it costs less to operate a large business in Nevada than in many competing markets. Commercial real estate rates in major Nevada markets also compare favorably with competitors, especially in California. Nevada’s proximity to major Western population hubs and the state’s business-friendly tax environment, combined with lower operating costs, make it attractive to companies looking to establish a business in the Western U.S.
Nevada received top marks from entrepreneurs for its policies affecting businesses, including taxes, regulation, property rights and government spending. Chief Executive Magazine ranked it the ninth best state overall for doing business and first in the West. However, the state’s ratings were highest for tax environment and much lower for workforce quality and living environment. These factors, among others, caused CNBC to rank Nevada only fortieth among the United States. The best efforts of economic development agencies to bring companies here could be thwarted by concerns over education, crime and healthcare — problems that many agree need to be addressed in order to diversify the state’s economy.
COST OF LIVING
Overall, the cost of living in Nevada is about 6.5 percent higher than the national average, with transportation making the most difference. Households in the Las Vegas metro area have higher costs than in Reno-Sparks in most categories. However, since these figures don’t take taxes into account, Nevadans may have more disposable income to support their families than citizens of other states.
Nevada’s crime rate, especially for violent crimes and car theft, consistently ranks in the top five among the 50 states. Many factors play into this, including the transient nature of the population. However, one thing to remember about FBI statistics is that they are based on crimes per 100,000 residents. With more than 55 million tourists visiting the state each year, more than 150,000 extra people are present in Nevada cities and towns on an average day, which skews the statistics.