In March 2003, Nevada Business Magazine (then Nevada Business Journal) sent, via snail mail, survey forms to several hundred business leaders in the state and asked them to participate in what would become an annual tradition: the “Power Poll”. Twenty years later, much has changed. But, as philosopher Heraclitus once said, “Change is the only constant.” Now the survey is sent via email, and the state has seen a multitude of legislative and social changes. However, much like those early poll respondents, business executives today continue to be adaptable and thrive within constant change.
These days, Nevada, like the rest of the country, is struggling with rising prices in nearly every arena after having just come out of the pandemic, which was preceded by the Great Recession. It seems the hits keep coming and business executives are doing their best to keep up. The 2022 “Power Poll” was sent out over a month-long period in February and March to Nevada-based business owners and executives. As busy as they are, business owners represented nearly three-quarters of respondents to this year’s poll and just over half of the respondents have been in business for over 20 years.
“Nevada is a good fit for having your own business,” said Dr. Ali Nairizi, president and CEO of Reno Tahoe Pain Associates and United Pain Urgent Care in northern Nevada. “It’s still ideal, the laws are favorable here to run your own business.”
Back on Track
The outlook for business in Nevada continues to improve. Just over 60 percent of respondents indicated their business was doing better than it was last year and almost 80 percent expected further improvement in the coming year. For Nevada, executives weren’t quite as certain with only half of respondents seeing improvement since last year. However, 65 percent expected Nevada’s economy over the next year to be somewhat or much better.
“In regard to recovery, there’s still some way to go for Nevada to be back to the old numbers,” said Frank Rieger, CEO of Sol-Up, a southern Nevada based solar power company. “I predict that next year Nevada will be completely back to its original state, as it used to be before the pandemic.”
“You see it all over the place,” explained Steve Kalb of improvements to Nevada’s economy. Kalb is CEO of Kalb Industries of Nevada, a multi-generational construction company with a presence in both northern and southern Nevada. He added, “There’s more cars on the road; there’s more people in the casinos. And, the construction business is just, really, going crazy.”
“Other than [COVID] we’ve had a good long growth track record,” said Chuck Mohler, president of Eagle Corporate Advisors. “I’d be nervous to say it’s going to keep going but if we’re just talking twelve months, I think we’re okay [to say] it will continue to go positive.”
The mood in the business community could be described as cautiously optimistic. However, uncertainties on the national and world stage have trickled down to the Battle Born state and, depending on the industry, have made doing business challenging. Nearly half of respondents have been affected by supply chain challenges in recent months.
For many business owners, the slowdown in the supply chain has seriously affected the ability to effectively do business, simply because it’s hard to know what will be available and when. On the construction side, “there’s just so many mixed signals in the economy right now with material,” said Kalb. “We’re now starting to have problems where we change the way we build things because you just can’t get the material to do it one way or the other.”
“We’re just running out of normal supply things we need,” added Nairizi of the healthcare sector. “It requires so much time and effort to look for things. The other problem is, you may find something, but it’s two or three times more expensive.”
“If you’ve got a year-long project, you’ve got to anticipate price increases along the way and that’s very difficult,” said Kalb. “Right now, we’re only able to get price quotes that will be good for 14 to 30 days.”
While every industry works to get back on track after recent challenges, businesses could benefit from a crystal ball to predict what comes next. However, until an effective predictive device presents itself, owners and executives are doing their best to guess at what the future holds.
Now Hiring Everywhere
Workforce challenges are nothing new to Nevada but seem to have become worse in the past few years. Nearly 90 percent of the business leaders polled said finding qualified employees was their biggest challenge. That challenge is exacerbated considering, of those polled, 72 percent expect to be actively hiring in the next year and almost 60 percent added to their staff in the last 12 months.
“I could probably list off five different client companies or associates looking for people,” said Mohler.
Looking at historical data from the “Power Poll” indicates that this issue grew in the midst of the pandemic. In 2019, the number of companies looking to hire was 64 percent and grew to 72 percent this year. However, workforce development and finding qualified employees has been a consistent challenge for executives. A whopping 98 percent said workforce development is a critical issue for the state; in 2019 it was 97 percent.
“Workforce training is very important,” said Jennifer Braster, owner of southern Nevada law firm Naylor and Braster. “[I’m from] the east coast where there generally appears to be a higher emphasis on post-high school education. There are challenges here because, in the past, [individuals] have been able to make fairly [good] salaries without having any post-high school education.” Braster went on to add that retraining qualified candidates should have more emphasis in the state.
When it comes to the state’s efforts in workforce development, Mohler acknowledges that work is being done but more is needed. “It’s talked about a lot,” he said. “If everything gets implemented and done, we’ll be able to see [improvements]. But I don’t think it’s there yet. It’s a work in progress.”
“Everyone is aware the state has diversified into other industries and cannot just completely be dependent on mining and gaming,” said Rieger. “A lot of people are moving to Nevada because they want to live here, they think it’s an attractive place. But we have to create the infrastructure so they can grow their families, educate their kids and build this society – which is based on knowledge and education.”
Hand in hand with workforce development is education – an arena in which Nevada has proven woefully inadequate. The pandemic only showcased those inadequacies all the more. Only a quarter of respondents thought education in the Silver State could be described as average. Just over 70 percent said the system should receive a failing grade of “D” or below.
“Nevada is known for not doing a good job on education,” said Nairizi.
“We have huge class sizes here,” said Braster. “Teachers are underpaid, they don’t want to stay in the school district. We have problems with the graduation rate and there really is a lack of school choice here. I also think you have huge disparities based on income level. There’s great teachers and great public schools but, as a whole, we’re failing.”
“The gap is dramatic, and this is going to be a huge problem in the future for this country. We don’t educate our kids like other nations do; this needs to change,” added Rieger who is originally from Germany.
Identifying the problem is a necessary first step but fixing it is another matter entirely. When asked what might be most important to fix education, accountability and funding ranked at the top with 44 percent and 39 percent of respondents, respectively, marking those as “important” or “most important”.
“We have one of the lowest per pupil funding and I have to think there’s a correlation between that,” said Braster.
Mohler indicated, “accountability of what’s there,” is also necessary. And, some executives, including Mohler and Kalb, felt that, in southern Nevada at least, the school district is simply too large to be effective.
While Heraclitus mentioned change as the only constant, some might argue that something else fits that description: taxes. While not every topic on the 2022 “Power Poll” appeared on this first poll in 2003, taxes were heavily featured. That year the tax structure was listed as most important to attract new business.
Executives today would likely agree with that assessment. One aspect of attracting new companies is the way the state interacts with business and 62 percent of executives and business owners felt that Nevada is a business-friendly state. However, almost 60 percent of respondents also felt that Nevada businesses have too much of a tax burden. So, while they’re necessary to fund important state programs, such as education, some executives feel that Nevada is in danger of losing its business-friendly status if taxes continue to increase.
“Generally, I’m against high taxes because I don’t think they work,” said Kalb.
Mohler added, “I definitely don’t want to have to pay more taxes. We can manage, just being wise with what we’ve got.” He wants the state to be more effective in the way funds are managed and said its important Nevada leaders are, “holding people accountable and balancing what we’ve got.”
Braster agreed that accountability was vital when it comes to taxes. “I want to see where the money is going,” she said. “Part of the sales pitch for getting marijuana legalized was the taxation on it. I don’t think we have a clear picture on where those taxes are going. So, before we’re taking more, I want to know where it’s going.”
Along those same lines, very few respondents indicated support for a raise to either Nevada’s sales tax or the addition of a state income tax. Only six percent favored a state income tax and less than 20 percent agreed to an increase in Nevada’s sales tax.
“Of course, we want to have a state that is functioning,” said Rieger. “But I would not support a state income tax, it’s the wrong measure. There must be better ways.”
Historically, some of those ways had been tried through increases to taxes on the state’s largest industries. Thoughts on taxes regarding two of those industries, mining and gaming, were polled again this year. For gaming, just over 30 percent felt that industry paid its fair share and just over 40 percent felt mining was paying a fair share. Those sentiments may change, however, as funds from the recently passed mining tax begin to accumulate.
Businesses are slowly getting back to pre-COVID activities but scars from the pandemic will remain for years to come. Arguably, one of the most effected industries was healthcare. Beyond simply being overwhelmed in providing care, the industry saw massive shortages in personal protective equipment, patient care supplies and people. One problem remains persistent, 41 percent of those polled said employee shortages related to COVID have had the biggest impact on their business. Financial losses were a close second at 34 percent.
Even so, memories can be short and the number of executives that indicated their business was negatively impacted by COVID declined from 65 percent in 2021 to 48 percent this year.
“We were in the lucky position that it really didn’t impact us a lot,” said Rieger.” We had to deal with the same issues as everyone else. We had to shut down the office for a certain amount of time. But we were able to maintain the installation work which was crucially important because that was the exemption for the construction industry.”
“Nobody knew what was going on with how transmittable COVID was in the early days. There was a lot of fear going around that probably proved not to be as bad as what they thought it was going to be,” said Kalb.
When asked how the state and federal government handled various issues, sentiment was somewhat mixed. Less than 10 percent felt the pandemic overall was handled exceptionally well. And opinions on how well the state handled everything from testing to vaccine roll outs and business closures and re-openings declined sharply from 2021 to 2022. For example, only 8 percent of respondents in this year’s poll thought Nevada handled the vaccines well, compared to 39 percent in 2021. “It was new territory for a lot of people,” said Mohler.
“We learned over time,” Nairizi agreed. “Overall, I thought we did a fair job because it was very unknown. This was not something we had seen before. I can look back and say, ‘Now we know what could have been done differently;’ but not then.”
When it comes to healthcare in general, Nevada needs a serious booster shot to improve. Over 90 percent of executives polled are concerned about the quality of healthcare and over 95 percent are concerned about cost. However, concerns over access have slightly decreased in recent years with only 37 percent saying that was most concerning. That number is down from the pre-pandemic poll which listed access as 43 percent most concerning.
“[Healthcare] certainly doesn’t have the best reputation,” said Rieger. “But I see reasons to be optimistic, there’s improvements. There’s a new medical university, a lot of hospitals being built and new infrastructure. As the city grows, I believe the whole healthcare sector will improve.”
Executives gave Nevada’s healthcare system an average grade with 58 percent saying the system deserved a “C”. However, only 15 percent ranked the system above average and none of the participants thought healthcare deserved an “A”.
“I think we’ve got a good healthcare system in Nevada,” said Kalb. He added, however, that the cost of healthcare was a concern, as health insurance costs increase.
“Premiums are going up,” said Nairizi. “That needs to be looked into and [we need] a better way to address that so people can get the right care and treatment when they need it.”
In an ideal healthcare system, quality, access and cost would all be plentiful. But, if forced to choose between quality and cost, Mohler said, “I’d rather have quality. I would lean to have a better quality even if it cost a little bit more.”
Politics as Usual
When it comes to politics, one thing everyone seems to agree on is that no one agrees on anything. A new question on this year’s poll asked respondents to list their political affiliation. Forty percent of respondents were in the Republican camp, nearly 30 percent indicated they were Democrat and 21 percent said they were Independent.
More Republicans responding to this year’s poll may be why politicians in Nevada, a blue state in the last election, were ranked so poorly. It’s clear business owners and executives believe politicians are failing Nevada. President Joe Biden dropped from a statewide average of “C+” to a “D” this year and Governor Sisolak dropped even further, from “C+” down to an “F. Among Nevada’s federally elected representatives, all received failing grades, and none received above a “D+” on this year’s poll.
These poor grades reflect the state of Nevada, and the sentiment executives have on how vital issues are being handled. The quality of education, in particular, is a huge issue for business owners because, for one, it has a trickle-down effect into their companies through workforce availability. Nearly 70 percent of respondents rated education as concerning with 40 percent listing this issue as what they are most concerned about for the state.
“We don’t really have a well-educated workforce, which then rolls down into education,” said Mohler.
On a broader range of social issues, crime rate took the lead with 69 percent of those polled ranking it somewhere between “Somewhat Concerning” and “Most Concerning”. However, government overreach also received high ratings with almost 50 percent of respondents indicating some level of concern.
Nairizi said that, while government regulation has a time and place, the government “shouldn’t overregulate”. What was concerning is that anything that comes, it is just going to be more government overreach. Instead of helping, that can cause a restriction of growth.”
The majority of respondents once again indicated ID should be required to vote (79 percent). “I’m a liberal thinker,” explained Rieger. “But in this case, I really support having an ID to [vote]. Election and democracy are the Holy Grail of our constitution. We have to make sure it’s done in a safe, trustable way.”
“You have to have an ID to get on a plane, to buy alcohol, for lots of things,” added Kalb. “Why shouldn’t you have one to vote?”
Finally, term limits were viewed favorably by respondents, with 85 percent of the vote. And 60 percent of respondents wanted to see judges put into office through a balanced combination of election and appointment.
This year’s Power Poll tells a story on what the Silver State’s business community is most concerned about and what issues they expect to see in the next year. The state has seen challenging times and many of these issues are not new for Nevada. As the business community emerges from the latest crisis, executives want to continue to grow their companies and they see the value in private corporations stepping up to help.
“I want to see improvement,” said Rieger. “I’m an engineer and engineers always want to improve the world. I want to get the opportunity to be able to do that and not be blocked by institutions that don’t want to see any progress.”