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October 25, 2014

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More Nevadans will need help as economic storm worsens

Total of Nevadans on food stamps jumps 45 percent; state projects greater hardship, more in need of aid by 2013

Hard times

Gloria Roxas hands Nikisha Bangerter her Women, Infants and Children benefits while Danyka Bangerter plays with a plant Wednesday, Sept. 23, 2009. Launch slideshow »

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The parking lot at Catholic Charities, which shares space with a state welfare office, is packed these days.

That’s a new thing. In the past, clients were the type to take the bus or walk to the service center on Las Vegas Boulevard in North Las Vegas. Now it’s the middle and working classes driving here, desperate for help.

Same at the Women, Infants, and Children program offices at Flamingo Road and Torrey Pines Drive, its waiting room teeming with young, weary mothers who need nutrition assistance for their toddlers.

Nevada’s spiking unemployment rate, which officially hit 13.2 percent recently, is forcing the newly destitute to seek help from the state as unemployment checks stop coming, savings accounts run dry and there are no jobs to be had.

This spreading pain is measured in the ballooning number of Nevadans receiving government help — food, medical care, cash assistance.

In June, for example, the number of residents on food stamps rose 45 percent compared with a year earlier. That was the second-fastest rise in the nation, behind Utah’s, according to the Kaiser Family Foundation.

Recently revised state planning documents obtained by the Sun last week offer a grim forecast for where those numbers are headed. By summer 2013, according to the state Health and Human Services Department, hundreds of thousands of Nevadans will need public assistance to survive:

• Nearly one in five Nevadans will be on food stamps;

• Enrollment in Medicaid, the federal-state health insurance program for the poor, will increase nearly 25 percent, to more than 250,000;

• Enrollment in welfare will increase by one-third.

For so many Nevadans seeking assistance, it wasn’t supposed to be this way. Many have never been unemployed for an extended period and never imagined signing up for food stamps or going to a food bank.

James Kowalski, a National Guardsman and a union carpenter, said his family went through its first serious bout with poverty when he was laid off at CityCenter. He lost his truck and home, and moved his wife, four children and four pets into an affordable apartment.

Kowalski, 40, thought he was back on track when he got picked up at the Hoover Dam Bypass project, only to be laid off again. He went from making $1,100 a week on the job to a $400-a-week unemployment check.

“I didn’t think it could get this bad,” he said, echoing others interviewed by the Sun who were lulled into thinking that Las Vegas was a place of limitless growth and plentiful jobs.

Kowalski was at the state welfare office last week planning ahead so that as soon as he depletes his savings and becomes eligible, he can get food stamps.

He would move elsewhere for work, but right now he can’t afford it, so he’s out looking in the valley.

Given what has happened to him, he seemed upbeat: “I’m still trying to get my first one to college,” he said of his 16-year-old.

In a state that hasn’t seen a serious recession in nearly three decades, policymakers have been consistently blindsided by the turn of events, with repeated rounds of fiscal havoc.

As the recession began two years ago, wildly optimistic state tax revenue estimates fell short of actual dollars, which forced elected officials to make deep cuts to programs.

As the Legislature met this year, Nevada faced the largest deficit as a percentage of its total budget of any state in the nation.

Now, even though policymakers have brought revenue estimates in line with reality, they seem to have underestimated the spiking need for services.

The new Health and Human Services forecasts are sharply higher than estimates the agency submitted to the Legislature earlier this year, and money for welfare and health care for the poor will run out before the Legislature convenes in 2011.

Chuck Duarte, administrator of the state’s Medicaid system, told a legislative committee last week that the program is on track to spend $37 million more during the next two years than was predicted in May, when the Legislature set projections and budgeted the money.

“These projections are a sign of how people of Nevada are coping with the economic downturn,” said Ben Kieckhefer, spokesman for Health and Human Services. “More and more people are out of work, and that drives them to assistance programs to sustain themselves.”

The revised estimates appear to be prudent, according to public and private economists. The experts caution, however, that even these strikingly dour forecasts may not be pessimistic enough.

Ellen Crecelius, a Health and Human Services economist, said the model used to make projections assumed peak unemployment of 13.3 percent, to occur in the first quarter of 2010. Unemployment already has reached 13.2 percent and is expected to continue rising.

“Clearly unemployment is going to get worse instead of getting better,” Crecelius said.

John Restrepo, vice chairman of state government’s official forecaster, the Economic Forum, and a principal of a consulting firm, said unemployment could rise to 15 percent or 16 percent by next year.

Moreover, as UNLV economist Keith Schwer noted, the official unemployment rate is a relatively narrow measure of economic malaise. A broader measure, referred to by economists as “U-6,” includes the marginally employed and people working part time who would rather be working full time. It is already likely 20 percent, Schwer said.

“We’re in uncharted waters here,” he said.

Economists also generally agree that recovery will arrive in Nevada well after the rest of the country.

“Have we seen the worst? No,” Restrepo said. He said there won’t be tangible recovery in the state’s economy — six months of positive job growth — until late 2010 or 2011.

Until then, the state has few options to prevent a deepening fiscal hole.

In the past, Nevada has sharply limited the number of people on public assistance by creating tough eligibility requirements. But under provisions governing the federal stimulus dollars that Nevada accepted this year, the state cannot tighten eligibility.

Once the recovery begins, a significant lag time will occur before pressure lets up on the state’s social programs. That’s because hundreds of thousands of jobless will be fighting for a relatively small number of new jobs, with the long-term unemployed relying on public assistance to survive.

For Nevadans suffering under the weight of the recession, the effect on the state budget is the least of their worries. They are merely hoping to find work — any work.

After construction worker David Twine was laid off at CityCenter, he ran out of money and entered a Salvation Army program that provides temporary housing and vocational training. He refuses to burden family or friends, or live on the street, he said.

When Twine is not working off his room and board at the North Las Vegas facility, where scores of homeless people gather every morning, he takes the bus to busy commercial areas and goes door-to-door for work. At this point, he’ll take anything.

Twine, 58, said he’s a Vietnam-era veteran and worked on Las Vegas icons such as the Mirage and MGM Grand.

He asked a question already answered by the thousands who have given up on the Las Vegas dream the past few years and have gone home. “How much longer can I stay here before I have to think about leaving Las Vegas?”

Nikisha Bangerter was at the office of Women, Infants, and Children last week with daughter Danyka, 2, so she could get help with milk, juice, eggs and other staples. She also has a 6-year-old.

An Army veteran, Bangerter said she’s looked everywhere for work, but to no avail, so she enrolled at the local University of Phoenix, from which she’ll graduate in 2011. She’s getting by with a little help from her parents — she lives with them but pays rent — plus student loans and the GI Bill, although that will run out in November.

The stress of poverty is a trigger for her migraine headaches and arthritis, which go untreated because her application for Medicaid has been denied.

She is 29.

“I just want to support my kids on my own,” she said.

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