Research Division, Legislative Counsel Bureau, State of Nevada
Nevada’s severe downturn has brought to light many of the long-term challenges facing the state. Not only is its economy subject to painful swings, but Nevada’s primary drivers— consumer services (primarily gaming, hospitality and housing) and resource extraction—will provide less support than they have in past business cycles. Less economic vitality will make it harder to offer Nevadans the quality of life they expect.
The importance of the economy to quality of life is equally clear—quality of life is a hollow promise without a healthy and supportive economy. Similarly, a proper fiscal structure—both in terms of spending and revenues—is critical to delivering on a quality of life promise.
Nevada’s consumer and hospitality industries will feel downward pressure on their revenues as aging baby boomers scramble to make up for low lifetime savings. The state’s gaming industry faces new competition across the U.S. and abroad. And in rural Nevada, the growth of primary resource industries will be modest, since commodity prices (other than for gold) are not expected to return to their recent peaks for several years.
The state’s long-term growth is still expected to exceed the national average. Nevada’s relative cost advantages, its hospitable culture, and its vast natural beauty will continue to attract migrants, mitigating shifts in demand for its core industries. Yet population gains, while still significant, will not match the trend of the last 30 years. Residential, retail and hotel construction will therefore no longer be a primary driver of regional growth.
Nevada’s slowing growth potential is troubling because, even during the state’s boom years, many of its residents’ needs were not being met. For example, a wide range of educational yardsticks suggests Nevada could do a better job of teaching its children and training its workers. Tight state and local budgets notwithstanding, now is the time to make the structural changes and investments Nevada needs, lest its obstacles become insurmountable in the years ahead.
While Nevada’s challenges were put into sharper focus by the recession, these issues have been known and discussed for many years. State and private agencies have developed numerous strategic plans, with the goal of providing public services more efficiently. There have also been numerous studies related to the state’s economic structure, but little has been done to act on their findings. It is time for us to address the issues directly, to act on them and to achieve meaningful progress in the six focus areas detailed in this report. It should also be recognized that there is interdependence and crossover among the six focus areas.
Economic development; Education--Standards; Nevada; Quality of life; Recessions
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Nevada Vision Stakeholder Group,
Envisioning Nevada’s future: Goals & strategies for advancing our quality of life.
Available at: http://digitalscholarship.unlv.edu/brookings_pubs/14
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