Terror behind 10 percent dip in Clark County sales

Wednesday, Nov. 21, 2001 | 10:50 a.m.

CARSON CITY -- Retail business in Clark County dipped by 10.3 percent or more than $200 million in September as fewer gamblers visited the city and consumers curtailed spending after the terrorist attacks, the Nevada Taxation Department reported Tuesday.

Taxable sales, a key indicator of the economy's strength, fell to $1.7 billion in the month in Clark County. And 12 of the other 17 counties experienced a downturn in sales, the department said.

Gov. Kenny Guinn announced Tuesday that tax collections statewide for this fiscal year have produced $25 million less so far. But he predicted the economy will pick up and he doesn't intend, at this time, to make cuts in the state's budget.

Restaurants and bars in Clark County reported a 10.1 percent decrease in sales compared to September 2000. Car sales, one of the other major sales tax producers, dropped by 2 percent in September.

Guinn told a news conference, however, he has reports that car buying rebounded in October when the zero interest financing became available. He said room occupancy in Las Vegas hotels is recovering and that should help food and alcohol sales.

Taxable sales statewide fell 9.1 percent to $2.4 billion.

The slowdown in business has produced less tax revenue for the state. But Guinn said there was an unexpected extra $24 million balance from last year that will offset the loss of tax collections so far this year.

In Clark County, which produces about 75 percent of the tax revenue, taxable sales for car dealers were off 2 percent; clothing sales fell by 17.5 percent; home furniture sales dropped 7.8 percent to $108.4 million and building materials were down by 4.7 percent.

The taxation department reported taxable sales fell in Washoe County by 4 percent; declined in Douglas County by 23.1 percent; fell in Elko County by 13.2 percent and dropped in Nye County by 6.7 percent.

Guinn has already ordered a freeze on state hiring, which has saved $1 million a month. That is expected to increase to $1.7 million a month because 88 new positions were due to come on board on Oct. 1 -- but they have been held in abeyance.

The governor hopes for a strong holiday shopping season to push the sales tax collections back up.

In addition, Guinn is hoping the federal government will start sending out incentive grants quicker. For instance, he wants highway construction money sooner so the state can start projects that will help revive the economy.

He doesn't see any need at this time to make further cutbacks in addition to the hiring freeze. But the governor cautioned the public that service may be a little slower. While there is an increase in population, he said the state work force has remained nearly the same over the past three years.

The Economic Forum had predicted the sales tax collections would grow by 6.1 percent this year. In the first three months, the sales tax receipts have increased by only 2 percent.

Taxes from casinos were forecast to grow by 4.5 percent this fiscal year. But the collections are down by 2.1 percent for the first four months of this fiscal year.

The state's budget is built on these estimates by the Economic Forum, a group of five laymen who are experts in various fields of finance. They made their projections last May.

Sales and gaming taxes are the biggest supplier of money to the state's general fund budget, accounting for more than 75 percent of the collections.

Despite the downturns, Guinn doesn't see any need to call a special session of the Legislature to dip into the state's "Rainy Day" fund of more than $136 million.