Statistics about Nevada in 2019 provide reasons for both optimism and concern. In this 14th annual study comparing Nevada to other states, economic indicators show that the state is thriving: tourism numbers are up, unemployment is down and home values are steadily rising. However, Nevada is still dealing with the same chronic social issues noted in the first edition in 2006. The state’s education and healthcare rankings are near the bottom once more, and the violent crime rate is near the top. Compared to last year, Nevada is making incremental progress on some of these statistics. For example, one healthcare ranking in Nevada moved from 37th in the nation to 36th and one education ranking inched up from 49 to 47. While it’s not quite cause for robust celebration, it offers a glimmer of hope that we are at moving the needle in the right direction.
Travel & Tourism
Nevada’s travel, tourism and gaming numbers are increasing at a steady pace, which is good news for a state where more than 25 percent of jobs rely on this industry. In addition, gaming taxes accounted for more than 21 percent of the state’s general fund revenue for the 2017-2019 biennium, and Nevada also depends on sales taxes paid by visitors and business taxes levied on tourism-related companies. While efforts to diversify the state’s economy continue, travel and tourism remain vitally important for Nevada’s economic health.
The state’s education numbers have been a major concern since Nevada Business Magazine first started compiling these rankings. Nevada lags far behind other states in almost every category. Many students still place below “Basic” in math and reading, a level even lower than “Not Proficient”. Nevada’s workforce is also less educated than the national average, which is a concern for businesses dependent on a qualified workforce. Recent efforts have been made to address the problem, primarily through additional funding.
Nevada is famous for many things, from its glittering lights, world-class entertainment and dining, to desert ghost towns and Cowboy Poetry. However, most Nevadans aren’t that different from residents of other states. Their median household income, age and number of persons in the household are comparable to the U.S. average. They commute to work, take their kids to school and live in houses and apartments (not hotels). Nevadans enjoy access to parks, museums, local sporting events and cultural amenities. The Raiders’ arrival in Las Vegas next year will add another exciting option to the Nevada lifestyle.
National healthcare rankings take into account, not only the health of the average person, but also their access to quality medical care. As a whole, Nevadans are less healthy than their counterparts in other states, more likely to die of cardiovascular disease, and less likely to be covered by health insurance. Nevada ranks 48th in the number of physicians per capita, as the medical profession struggles to keep up with population growth. New and expanding medical schools should help ease the doctor shortage, while Nevada’s medical professionals are hard at work improving Nevadans’ health.
Nevada has historically ranked among the top 10 states for violent crimes, and the latest statistics from 2017 show the Silver State ranking sixth. These figures are troubling to a state that wants to attract tourists, conventioneers and new businesses. However, Nevada has improved from its 2016 position (No. 4) and 2015 ranking (No. 3). The property crime standing is also down, from 25 to 19. The FBI’s numbers are based on crimes per 100,000 residents, so they don’t take into account the 56 million tourists visiting Nevada each year.
Not long ago, Nevada led the nation in foreclosures, and more than 50 percent of homes were considered “underwater,” with mortgages totaling more than the homes were worth. Thankfully, the housing market has rebounded dramatically, due to the improving economy and an influx of new residents. Home values have increased at least 4 percent in all the state’s metro areas, and Nevada’s foreclosure inventory ranking dropped from seventh last year to fourteenth. A slowdown in home sales and construction during the past few months may not be a bad sign, hinting that homebuilders are trying to avoid another boom-and-bust cycle.
The cost of living in either metropolitan area in Nevada isn’t much different from the cost in other states, with southern Nevada averaging 4.7 percent higher than the U.S. average, and northwestern Nevada averaging 12.3 percent higher. Housing and transportation make up most of the difference. However, the Cost of Living Index doesn’t account for taxes, which are lower on average. Nevadans have more take-home pay to spend on goods and services, so $100 goes 2.67 percent further in Nevada than in the average state.
The jobs picture in Nevada continues to improve. At 4 percent, the June unemployment rate ranked Nevada fifteenth in the U.S., down from 4.5 percent and fifth last year. Weekly hours worked in May were up 2.4 percent over last year, and unemployment claims were down 3.6 percent. There’s reason to believe employment numbers will continue to improve, as a recent statewide survey by UNLV’s Center for Business and Economic Research showed that 31.5 percent of respondents predicted an increase in hiring in their industry, and 50.6 percent expected no change.
Nevada’s state tax burden is comparable to other states at 8.26 percent of personal income, not including county and local taxes. As one of only seven states with no state income tax, Nevadans make up the difference by paying more in sales taxes and fees as a percentage of their income (6.02 percent), and are second only to Hawaii at 6.56 percent. Businesses are often attracted to the Silver State because Nevada has no corporate income tax, no inventory tax, no franchise tax and no unitary tax.
Many businesses relocate to Nevada because of its regulatory environment, moderate tax rate for both businesses and individuals and relatively low cost of doing business. These factors are among the reasons Nevada consistently ranks in the top 10 states to start or operate a business. However, the Silver State continues to face serious challenges in the quality of its education system, the crime rate and access to quality healthcare. Finding solutions to these persistent problems is necessary if Nevada is to attract new businesses, diversify its economy and create a better quality of life for its citizens.
Cost of Doing Business
The Boyd Company ranks Nevada locations favorably for annual operating costs on a scale that includes payroll costs, lease rates, business taxes and workers comp costs. Whether it’s a corporate office, a distribution warehouse or a manufacturing plant, operating costs are often less in Nevada than in competing markets. Lease rates for commercial real estate are also attractive compared to competitors. When factoring in Nevada’s relatively low business tax burden and its proximity to major West Coast markets, the Silver State is increasing attractive to many types of businesses.
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