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StumbleNevada budget:
New economic reality: Pessimism
Economic Forum’s latest tax-revenue forecast portends dramatic cuts
Cathleen Allison / Nevada Appeal
Economic Forum Chairman John Restrepo listens to gloomy economic projections during Friday’s hearing in Carson City.
Saturday, Jan. 23, 2010 | 2 a.m.
Gov. Jim Gibbons
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In this economy, it’s easy to be a pessimist. The latest to join their ranks Friday was a panel of five business leaders, who predicted a painful next 18 months for Nevada’s economy, setting the stage for deep cuts in state government’s current budget during a looming special session of the Legislature.
At the onset of the recession, no one predicted just how steep the drop in Nevada’s tax revenue would be, least of all the Economic Forum. Every time the savvy business leaders thought they were being pessimistic enough about the state’s near-term future, reality showed they weren’t.
“The Economic Forum had five bites at the apple of the 2009 budget, and were too optimistic each time,” said Russell Guindon, the Legislature’s financial analyst.
When the Economic Forum is too optimistic, the Legislature spends more than the state receives in taxes.
Take this from May, when the Economic Forum last met. The Las Vegas Sun observed: “No one was optimistic. The economy wouldn’t rebound until fiscal year 2011, they said. Most of their questions dealt with the appropriate level of pessimism they should express in their forecasts — really pessimistic, or sky-is-falling pessimistic.”
On Friday, they seemed to take the “sky-is-falling” approach to things. Major tax revenue would come in $580 million below what they had predicted in the spring. Add to that money the state guarantees to schools and additional Medicaid costs, and legislators will face a deficit of more than $800 million, according to the best estimates available Friday.
Indeed, it was a harsh take on Nevada’s short-term future.
The Silver State has lost 120,000 jobs since December 2007, when the recession began, said Bill Anderson, chief economist of the Employment, Training and Rehabilitation Department.
“This is an unprecedented time in Nevada’s history,” he said. “Recovery, when it does unfold, is going to be relatively slow and choppy.”
It’s accepted that the old reliable crutch of growth is gone. State Demographer Jeff Hardcastle said the state lost 1 percent of its population last year.
Depending on the growth model, Nevada could lose 100,000 people between now and 2015, or, on the optimistic end, gain 100,000.
Gaming will sink, the business leaders predicted, weighed down by a weak locals casino market, which makes up 20 percent of gaming in the state. Retail sales will also remain weak, and slide back.
Employment, insurance premiums, live entertainment, cigarette and business filings taxes — down, down, down, down and down.
Of the sales tax, Matt Maddox, chief financial officer of Wynn Resorts and a member of the Economic Forum, said: “This, to me, is (the tax source) most at risk” in this economy.
Speaking about the insurance premium tax, another Economic Forum member, Reno certified public accountant Bill Hartman, said his clients were looking at their mothballed heavy equipment and wondering what they could cancel insurance policies on. “This one, once again, is highly at risk.”
This is what passes as good news these days: November sales tax figures dropped 12 percent compared with numbers from a year ago.
“It’s not an 18 to 19 percent drop,” said Dino DiCianno, the Taxation Department director. “I’m not going to say that’s a rosy picture. But that’s positive.”
Legislators had for weeks dismissed the need to come back to Carson City for a special session, arguing that the state could shift money around and make cuts through interim committees.
After Friday, only the biggest optimists would bet they can avoid the trip.
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Gaming will sink, the business leaders predicted, weighed down by a weak locals casino market, which makes up 20 percent of gaming in the state. Retail sales will also remain weak, and slide back.
Local gaming companies want to increase profits, all the while cutting jobs. The more jobs they cut, the fewer customers for their casinos. You can't have your cake and eat it too.
If the past track record of the group holds up (consistently wrong on the direction of the local economy), we are now at the bottom!
How many of the 120,000 jobs lost since Dec 07 came from the mistaken attempts to curtail Yucca Mountain?
Of all the stupid things that could of had happened, is to stop this project from going ahead due to the false fears generated by Dirty Harry and others who have no concept at all of the safety factors that would of had been implemented.
What is very disturbing to know is that we, the United States of America are outsourcing the removal of nuclear waste, to Russia to the tune of billions of dollars a year!!!
Can you imagine how just one billion dollars of that money could benefit our community? It was wrong, absolutely wrong to try to make this Yucca Mountain a political issue, versus a true jobs creator and a source of revenue via a variety of new businesses that would cater to this industry here in Southern Nevada!
I support and believe that the only way this country can achieve energy independence is to build more nuclear energy producing plants. In the country of France, approximately 70% of the power used there comes from nuclear energy. Think about that, 70%!
I believe the jobs lost via the scientists and the engineers that walked away from their homes in the communities of Summerlin and other communities were a god send to this community. Now they are gone, for now. The homes, they walked away from are now part of our foreclosure levels.
The opponents of Yucca Mountain literally destroyed the economy and the housing market via their misguided and feeble mind set.
Yucca Mountain is not dead nor shall it ever be. There is a market for the facility and when we have spent billions on building this facility, all under the eyes of Sen. Dirty Harry, you have to ask yourself, why did he not try to stop it decades ago instead of wasting valuable tax dollars? Because he was all for it, until he went on ballistic in wanting to destroy Las Vegas and Nevada because he knew he was going to be retired permanently from being known as a senator from Nevada! He has done nothing to benefit this state and has done nothing to encourage business development here.
The green jobs which are highly subsidized by the federal government are not cost effective and they are misleading as to the benefits of which may be deprived from them.
If there are to be 10%+ cuts in education let the cuts take place where they have the least direct impact on students, and that is in the overloaded, bloated administration of the CCSD.
Reduction in Force (RIF) across the board of all administrative positions by no less than 50-75% would do a great deal to eliminate the budget crunch in this district.
For decades more and more administrative posts have been created and filled for superfluous reasons. Every high school has far too many administrators that must justify their jobs by developing make work, mundane and nonsensical paper work for teachers. If every high school had a principal and VP only, there would be far greater production from teachers and less vindictive harassment at the same time.
Why does this school district need former CCEA president Mary Beth Scow as administrative liaison between teachers and administrators at a salary of $70,000+? Why? If there was less harassment teachers might be more productive, creative and innovative.
Why did this district need to hire an analysis to determine the 'brain colors' of trustees and determine their compatibility to each other and the administrative staff? Why? Why was this guy hired at $100,000+ salary? Because the money was there and they need spend it or lose it in the next round of state allocations.
Why is more important to hire administrators at $100,000 salaries and not more certified and fully qualified classroom teachers? Because the 'good old boy/girl' network is strongly imbedded and the philosophy of 'help me up, and I will pull you up after me' prevails stronger than ever in this district.
Why are there not textbooks, adequate paper and consumable supplies for all sudents and classes? Because the emphasis continues to be on building up the administration and re-hiring ex administrator buddies as crony adjunct supervisors and specialists.
MSgt Durbin--Most of the job losses have been in tourism and residential construction so I don't think Yucca would have changed that. In fact it would probably have made it worse. Scientists walked away from their homes--really?? How many scientists exactly were working on Yucca--are these the same type that manipulated their tests and reports much in the same way as the enlightened global warming scientists were found to have done?
I for one do not want toxic waste in my backyard. I don't care if it will create jobs or produce revenue. It is toxic waste. People seem to want to compare this to Alaska and the revenue that state receives for its oil. Oil is a natural resource. Toxic waste is garbage. People in general do not want to live near garbage dumps....this is even more the case when the garbage is toxic and the threat is invisible and can cause death, birth defects, etc. Others, though I suspect not you, also suggest we should legalize marijuana to solve the revenue problem. I don't think we should be looking for solutions by creating new problems--people don't generally desire to live near trash dumps or drug dealers. Let's keep looking for better answers. I think we should look for solutions around industries that people desire to be around.
Clearly you dislike Harry Reid. So for this you embrace toxic waste. Seems very similar to those who embraced Hugo Chavez or Mahmoud Ahmadinejad because they disliked GWB to me.
"It's the lottery, stupid". We need new revenue streams and the lottery is the fastest and most profitable to put into place immediately.
With the huge debt burden being carried by the gambling houses, and the continued expansion of California casinos, Las Bugsy will never produce the revenue stream needed as they will fall like dominos in the next few years.
We need NEW revenue streams and if the gambling houses have a better idea than a lottery - let's hear it. Otherwise just get the hell out of the way.
LOTTERY will not work all these politician have casino money in there pocket. yucca mountain is a health issues
TEXEXNEV: u are right now we have to compete with indian gaming. we have indian gaming almost every state. why would any people deal with airport security and driving 3 to 4 hours to loose money and get treated like s***. i am realistic we are f***. like i said this city and state depends on casino and construction we didn't diversify and we never will. because this city has nothing to give employer to move. and people who oppose healthcare don't worry it will not passed the scare tactic work aagin. i just hope and pray that none of your family get in a situation that not passing cause them death.
or yea our great GOV. not. drop medicaid there will be death because lack of medical care. in the disabilty and retirement community. nthis guys sucks. i am sure sandaval and montandon will be the same. go rory. maybe a democrat get in there maybe we might get our elusive lottery game here. we have raise money one way or another.
Last time we made mostly imaginary cuts as we raised taxes in an attempt to make sure the budget did not decrease...we literally passed a budget that was nearly the same size as the previous budget.
Of course, kicking the wealth generating part of Nevada's economy when it was down was a stupid idea. Democrats and Republicans thought this would be a short recession so they could get away with a tax increase and no one would notice the damage it did. They were wrong.
Now its time for adult decisions. The budget has to be cut. Either figure out a creative way of providing the services at a lower cost, or get rid of the people running those departments and find someone who can.
Yucca Mountain is an imaginary health issue. It takes hundreds of years for water to ruin one of those casks. You can drop them a hundred feet, set fire to them, or run them over with a train and they're still fine.
People have attacked the project on the infinitesimally small chance their might be a leak no one would detect and contain for hundreds of years! This is stupid.
People should have attacked the project as a waste of money. We could have eliminated the restrictions on nuclear power plants allowing the latest technology to develop in house recycling for nuclear waste. But again, the environmentalists stop technological progress.
If the casks are no threat and virtually impervious, as Patrick says, then there is no reason to transport the material anywhere. The material can and should be kept where it is produced.
Patrick has unwittingly revealed the RJ/NPRI/Big Business philosophy in his statement that the Yucca casks last hundreds of years, so let's get on with the dump.
They justify all capital projects, from Yucca Mountain to Coal plants, on the basis that they are entitled to immediate financial benefits--and future generations who inherit our mess can be damned.
I hope that when the education cuts come that they hit the universities harder than they take from the schools for children. Every child deserves a basic K-12 education. However, college, well, it's great if there is enough money to subsidize it, but if there isn't, then students should pay for their full tuition. It won't hurt as much to pay for some of your education when you are an adult, but children have no way to pay for their education and they shouldn't get less of an education just based on when they were born and how the economy was.
FWIW:
Those interested in viewing nuclear cask crash testing videos -- enjoy.
http://www.youtube.com/watch?v=U1nvRBk4W...
http://www.youtube.com/watch?v=jQaKeXZYR...
For those interested in weapons test results on nuclear shipping/storage casks:
http://www.lasvegassun.com/news/2002/feb...
http://www.lasvegassun.com/news/2002/mar...
http://www.nirs.org/factsheets/nirsfctsh...
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We would love to move to Nevada. It's cold and boring where we live. We like the diversity and gambling opportunities that Nevada provides. I love the area especially near Reno but hubby loves Las Vegas. Why aren't we there? Construction jobs. Not houses but industry to support our lifestyle. Where we live they are investing in converting nuclear/radioactive material into a stable form for storage. We are so far ahead of just putting it in containers. I say go with Yucca Mountain and while you are at it get on the train and discover a solution to the storage problem. Think outside of the box people.
why do people think a lottery in nevada will save us? These must be the same people who cheered Clinton when he passed the expanded cobra package
If people are out of work, unemployment benefits drying up, etc etc for months and months and in fact moving into years now they don't have the money for the lottery. heres an idea they can spend what they have on it and apply for government assistance, thereby further increasing the strain on the economy
We live in a state where there are three cities
Las Vegas(gambling)Carson City(Government)Reno(gambling)
Brilliant idea--- A Lottery
Does the titanic mean anything? Run for your lives and hopefully get a seat on the life boat! If you don't, the politicians are going to steal those and watch us all go down!
No one knows what direction to go!
Hold on and good luck! If someone finds the greener grass, send word back!
the fools of Nevada blew their chance at Alaska Pipeline-like Govt Subsidies by Unanimously rejecting Yucca Mountain instead of negotiating for that, now even bigger fools even bring up the idea again LMAO
I pray every night the Mayan's are right
Patrick--it is so incredibly funny to hear someone as childish as you are say "Now its time for adult decisions."
As usual, you ignore the fact that Nevada's government has fewer employees per capita than nearly any other state which means it is already operating far more efficiently than most every other state.
Instead, using your typical big-boy 'buzz' words that you learned from your publicly subsidized education, you want to ignore any facts that jeopardize your foregone conclusions.
heres a plan that will immediately save Nevada millions upon millions upon millions of dollars
If you are illegal and caught-- You will will be immediately deported along with any children you have. No food stamps for your children, No medical services for your family. Sneak back in again and you will be executed(since closing the borders is
Un-American)
No to the twelve years of English as a second language classes/bi lingual study materials for the children as well, dang even saving the county school districts money
davesgood--a few facts for you--Henderson and North Las Vegas are the second and third largest cities in Nevada.
A lottery may not be the only or best answer, but when one of the most profitable lottery sites for the California lottery is located in Primm, this should tell you that this state is losing a lot of revenue to California. So maybe you're right--brilliant idea--lottery!
Im done posting lol but heres an Idea for why Primm may be one the most profitable spots
1)California residents driving back from vacationing in Vegas,last bathroom stop at Primm, and "wouldn't it be funny if I won the lottery after losing all my money in Vegas".
2)The California Lottery obviously doesn't do as well in other parts of California
3)Boulder City is the only place in NV that gambling is Illegal so that would include Henderson and N Las Vegas as well as parts unknown as "Gambling Meccas"
4) Nevada had a powerball type lottery sponsored through the casinos as regulators -- It was a dismal failure
Trust me We are not losing that much
whatever is the right solution for nevada you can be sure that if the politicians cant benefit from it it wont be done. the mother of god could come down from heaven with blueprints to show the elected officials how to overcome this recession and if a profit cant be made, they'll bury the blueprints in the vatican.
our problem is not national our problem is local. we can't depend on washington d.c we have to fix ourselve we need a major meeting with company from small to large and ask what can we do b 4 we loose more company. this include casino,union and nounion company we must work together or we will repest we will be a dust bowl
davesgood--'trust you'--no thanks. I am glad you acknowledge we are losing. We clearly disagree on how much is too much. I'd prefer none. Thanks.
Everyone acts like it's major end of the world problem. I could fix it in minutes. It really is simple
Let the games begin
vsestini---RIGHT ON---ccsd is so overloaded at the admin level it is truly disgusting. I've been to meetings at the elementary school level with 10-12 administrators for 1 meeting with a parent-over what should take 1 or 2 people tops and the parent--all of these feel good "specialist" are involved in the smallest issues.---Why are all these people on staff at a stinking elementary school???? you could have had ten more classes being taught with all these "administrators" --imagine all the memos being sent back and forth to each other all day long trying to justify their positions.
vestini
keep it up. You are making sense.
"'It's the lottery, stupid'. We need new revenue streams and the lottery is the fastest and most profitable to put into place immediately."
A lottery can't be put into place immediately -- they're currently illegal under Article 4, Section 24 of Nevada's constitution. Changes to the state constitution require voter approval on two ballots, meaning that the soonest that a state lottery could be implemented is sometime in the year 2013.
We don't need new revenue; we need to get rid of career welfare recipients and illegal immigrants. Nevada would realize instant savings and our economic disaster would be cured.
I for one hope that many more homes get foreclosed on and the budget crisis continues to get worse. If anyone of you fail to realize that the Democrats are the primary reason for our budget problems then you're just as stupid as they are and deserve what occurs in your life.
Nevada has become Calnevada; we have way too may illegal immigrants and way too many slow, dumb, and lazy career welfare recipients living amongst us that have no right to coexist in our communities. They need to pack their lazy pathetic lifestyles choices back to California and Mexico where they belong and leave us alone and stop relying on the Democrats to create their happiness. We're sick of you and your not wanted here anymore, now leave!
let me in there. I can guarantee I'll find LOT'S to cut. I'm betting and random 10 people off the street can do a better job with the budget than these clowns.
Yucca is a great idea, because there won't be a Las Vegas if we keep these leaders.
See todays LVRJ (01/25/2010. They report that it is costing taxpayers $2 million dollars per day to treat illegal immigrants. That would save us over $700 million per year if we sent the scum back to the toilet from whence they came.
@TheFacts:
I like ironic names like yours.
That said, you obviously know very little about the Yucca Mountain Project, its staff, and its voluminous body of scientific study.
To begin with, thousands of respected scientists from our nation's national laboratories (Lawrence Berkeley, Lawrence Livermore, Sandia, Oak Ridge, Idaho, etc.) have contributed to the YMP. The incident you allude to involved three USGS scientists who never falsified data, which was proven by multiple independent investigations. (All they had done, essentially, was complain about burdensome quality control requirements via email, and propose fudging some software qualification reports so they wouldn't have to re-run a model; they hadn't completed the proper paperwork, but there was absolutely no manipulation of data.)
Your attempted analogy to Climategate is entirely inapt, for those scientists actually did falsify and omit data, not to mention their campaign to corrupt the peer-review process and suppress dissenting interpretations.
And here's another substantial difference: The YMP data called into question by the bad behavior of a few USGS scientists was purged from the Project, even when it was demonstrated that it was perfectly good and accurate data. Instead, DOE rebuilt its infiltration model from scratch, at a cost of tens of millions of dollars. Just the appearance of scandal or impropriety was enough to require that the questioned data be jettisoned.
But that's the irony and the difference: The YMP is so heavily regulated and monitored, and so transparent, that any fool can find an axe to grind. By contrast, the scoundrels at UEA were able to conduct their own shadow campaign against the scientific method itself, and most die-hard environmentalists (i.e., the kind that ignore and in some cases even hate science) will continue to sing their praises.
Its2hot, you are 100% SPOT ON. Just look at east Las Vegas, never an upper class bastion, but once a basically solid blue collar to lower middle working class neighborhood.
How's everyone liking the way the things are going in that area NOW? You think it's looking good and is a desirable place to live in 2010?
Thanks to the massive influx of illegals that BOTH parties are responsible for allowing to remain in Clark County, that area has been decimated into what can only be described as a third world toilet, and I defy anyone to dispute that contention.
Yet, this state continues to spend MILLIONS of dollars accomodating these people, if only because, God forbid, people won't think Americans as "nice" if we don't bend over backwards for a group of people that, collectively, have ZERO loyalty to this country, and that are here for one reason and one reason only; to send often times under-the-table earnings- earnings, which, under any other circumstance would and should be poured back into the U.S. economy, to Mexico.
Oh, and managing to crap out an anchor baby is always an added bonus.
You readers would have a stroke if you knew the extent to which our Nevada state and federal coffers are burdened by these anchor babies. Oh, I could tell you stories of how Nevada illegals benefit from their little bonuses at the expense of lawful residents and citizens, but I can't for obvious reasons.
I know of one illegal with FOUR anchor babies. BTW, this man was a UNION roofer, for those of you idiots that are naive enough to think that illegals aren't contributing to the massive unemployment rate because they're only doing "jobs Americans won't".
This man's "babies" are ALL on federal and state assistance, not to mention "free"
education. 12 years in Nevada, he still can't speak a word of English. He is soon to be deported. BUT, guess who has FIVE brothers and sisters that are ALSO
living here iegally in east Las Vegas? And, yes, each of those five siblings have their OWN numerous anchor babies that take advantage of taxpayer-funded government goodies.
And, that's just ONE example, folks. Multiply thatby 250,000-the approximate number of illegals infesting Clark County, and then tell me how greatly the Las Vegas economy is benefitting from "diversity" and ALL the money we're saving with their, umm, "cheap labor".
Good thing Harry and the Kenyan will be fighting tooth and nail to ensure that these highly educated folks- whose tax contribution is a pittance compared to the services they and their famously statistically high-achieving, second generation offspring use-will soon be American citizens.
Si se puede!!!
We definitely need to show today's kids that they are termite food, and they will not be spared any pain from Depression 2010. More education cuts!!