Nevada Taxable Sales Climb Higher

Nevada Taxable sales increased by 4.3% in February from the same month a year ago, as all but Churchill, Washoe, Douglas, and Lander counties saw growth. February is Nevada's eighth month of YOY consecutive increases. Within Clark County, motor vehicle & parts dealers grew by 20.2%, and clothing & clothing accessory stores grew by 12.9%.

Taxable Sales in Nevada were 5% higher for February this fiscal YTD, as compared to the previous fiscal YTD. Clark County and Washoe County (the two largest economic counties in the state) increased by 2.9% and .9%  respectively this fiscal YTD.

Job Growth Comes to Nevada!

According to the Bureau of Labor Statistics, 10,300 more people were working in Las Vegas in March compared to the month before. The increase in employment is partially due to jobs growth in hotels & gaming, service industries, and education & health services. Construction employment continues to fall with 57 thousand currently employed--down from 61 thousand the year before.


Nevada's unemployment rate fell to 13.2%--down from 13.6% in February as many unemployed workers found jobs. As jobs continue to improve in the U.S. and locally in Nevada, growth is likely to follow.

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Gaming Revenue--Not All Bad News!

February 2011 was not the best month for gaming. Nevada gaming revenue fell 6.8% in February YOY. The Las Vegas Strip and downtown Las Vegas fell 9.6% and 6.2%, respectively--pushing Clark County into a 7.0% YOY decline. Washoe County fell 8.6%, with Sparks, South Lake Tahoe, and the balance of county each with double digit YOY declines.

Gaming revenue on the Las Vegas Strip improved from FY09; however, it failed to match the spike it had in FY10. The Chinese New Year, which landed on February 3rd in 2011, has helped gaming revenue in years passed, but it wasn't enough to push February's revenue higher than 2010.  The good news for the Las Vegas Strip is FYTD 2011 gaming revenue is 2.3% higher than FYTD 2010.  

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New Business Entity Filings are Increasing

New business entity filings in Nevada, as recorded by the Secretary of State Ross Miller's Office, shows positive year-over-year growth starting in December 2010--a much needed improvement from the significant decline from 2007 to late 2010. It is unclear how many jobs will be created from an increase in new business entities; however, it's a positive sign to see the number of new ventures increase, which could contribute to job growth throughout Nevada.

It's interesting to see the shift from corporation filings to L.L.C. (Limited Liability Company) filings over the past few years as people utilize the different tax and corporate structure of L.L.Cs.

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Gasoline Prices: How High Can They Go?

Gasoline prices have been everything but stable during the past few years. Since early 2009, Nevada residents enjoyed gas prices at or below $3/gallon. Because of the unrest in Egypt, Libya, and potentially Saudi Arabia, fear of oil supply disruption pushes market prices higher.


According to the United States Energy Information Administration, the end cost of a gallon of gasoline has increased due to crude oil price spikes, while taxes, distribution & marketing, and refining have remained relatively fixed. Time will only tell if the short-term unrest in the middle east calms or becomes even more escalated. In the long-term, we can expect a steady increase in the price per gallon as the population in the modernized industrial world increases and fuel alternatives remain economically inefficient.


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Nevada Employment--Still in the Trough!

Brookings released their quarterly Mountain Monitor report covering "the six-state Mountain region’s 10 major metropolitan areas that lie within the 100 most populous nationally." According to this report, Phoenix-Mesa-Glendale, AZ area's employment improved the most since reaching their relative trough. Las Vegas, NV, Boise City, ID, and Albuquerque, NM, have yet to break out of their relative troughs--in other words, employment is still declining. It is uncertain how much further employment will decline before these three areas see employment gains.



The Top 100 Metropolitan areas show a slight improvement from the aggregate trough, supporting the recent Bureau of Labor Statistics positive jobs reports. The Bureau of Labor Statistics reported that over the past five months 671,000 jobs have been created. We expect those cities currently in their respective troughs to gain traction as the national economy continues to improve.

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Negative Home Equity--Where Does NV Sit?

When CoreLogic released their March 8th report, it was no surprise to see residents who hold a mortgage in Nevada on average are significantly underwater; or in other words, their mortgage exceeds the property value. Interestingly, Nevada is the only state where total residential home mortgages exceed total property values--giving some residents an incentive to "walk away" from their mortgages. According to this report, Nevada has a massive 65% of its mortgaged properties underwater, followed in second place by Arizona, with 51% and a national average of 23%.

The national loan-to-value total is 70%, with mortgaged properties having a market value of $12.7 trillion and mortgages totaling $8.9 trillion (click table to enlarge).  The Federal Reserve reports that approximately one-third of all U.S. homes have no mortgage.

State-Local Tax Burdens on NV Residents Decline!

The Tax Foundation, an organization dedicated to educate taxpayers on the tax burden each state's residents bear as a percent of their income, released their newest report in February. It is good to see Nevada has maintained it's competitive advantage compared to the U.S. average. 


One of the attractive attributes that draws people and businesses to Nevada is its low state and local taxes. Since 1977, Nevada has always been one of the top five states which provides the lowest tax burden to its taxpayers. We welcome the news that in 2009 Nevada's state and local tax burden ranking improved to become the 2nd lowest among the fifty states--beaten only by Alaska! (but it is a little colder there!)

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Nevada Census

Nevada's population increased by 57,470 from 2009 to 2010--a surprising gain considering Nevada's high unemployment and sluggish economy. During the last decade, Nevada averaged 3.1% annual population growth as compared to the national average of .95%.

The largest growth during the last ten years took place in Lyon County, which grew from 34,501 people in 2000 to 51,980 people in 2010. Esmeralda County shrank by the largest percent, but by the lowest amount--due to less than 1,000 people living in the entire county.


Within Nevada's population growth, Asian and Native Hawaiian & Pacific Islander populations doubled in size during the past ten years. Hispanic and African Americans also increased substantially, while the White population increased by a meager 19%.

The future of Nevada's economy is uncertain, but the national economic recovery will likely spill over into Nevada and buoy up our tourism industry.

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Nevada Taxable Sales Leap 11.2% in December

Taxable sales leaped in Nevada by 11.2% in December YOY! Taxation Deputy Executive Director Brody Leiser says that a large portion of the increase can be attributed to the Ruby Pipeline project which is being developed and passes through Washoe, Humboldt, and Elko counties. (See map here)

According to the official Ruby Pipeline web-site, "The project represents an approximate $3 billion dollar investment in new pipeline infrastructure that will connect clean-burning and competitively priced natural gas reserves in the Rocky Mountain region with growing markets in the western United States".

Clark County taxable sales increased by $28.9 million in December from the year before representing a 2.8% YOY increase.

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McCarran Airport Traffic Climbs Higher!

McCarran Airport passenger traffic climbed in January by 5% from the previous year. Southwest Airlines, McCarran's largest airliner, carried 1,276,960 passengers in January--up 5.6% from the previous year!

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Las Vegas Home Prices

Las Vegas home prices, according to Case Shiller Index, continue to lag behind the U.S. Since January 2000, the U.S. home prices are up 42.7% while Nevada home prices are down .47%!

Nevada Sports Books Super Bowl Wagers

Some of Nevada's sports books operators were predicting $100 million to be bet on last Sunday's Super Bowl.  Bettors wagered only $87.5 million on the Super Bowl, an increase of $4.8 million from 2010, but $7 million lower than 2006's $94.5 million, when the Pittsburg Steelers beat the Seattle Seahawks. 

If office pools and other illegal wagers were counted, maybe the betting handle was over $100 million!

Nevada Sports Books Super Bowl Win/Loss

Nevada sports books eked out a .83% win on last Sunday's Super Bowl between the Green Bay Packer and the Pittsburg Steelers.  Sports books posted a win of a meager $724,176, as compared to last year's win of $6.85 million.  The Packers were a 2 1/2 point favorite. 

The sports books have a good track record, winning in 15 of the past 16 years.  The only loss was in 2008, when the New York Giants upset the New England Patriots. 

Nevada vs USA GDP

Nevada's economy dramatically outpaced the U.S. economy during the past 20 years, particularly from 2003 to 2007, until the real estate bubble burst in the Silver State. We expect Nevada's economic growth to be lower than the national economy, as the state continues to lead the nation in unemployment and foreclosures.

Nevada's Taxable Sales are Up Again

The good news is taxable sales in Nevada are improving--although they have been much better in earlier years. November's sales improved 2.67% from the same month a year ago, but are down 8.55% from the same month in 2008.

A few notable YOY gains in Clark County:

Motor Vehicle & Parts Dealers--up 26.4%
Clothing & Clothing Accessory stores--up 10.9%
Accommodation--up 13.5%

Clark Co. Population Estimates

The Clark County Planning Commission estimates the county increased it's population in 2010 to 2,036,358--up from 2,006,347 in 2009. Clark County attracted an influx of new residents during the beginning of the decade, but suffered a severe drop in new residents since high unemployment and plummeting real-estate began in 2008. Official Census data will be distributed in the next few months.

Clark Co. Unemployment Rate Climbs...U.S. Falls

The unemployment rate in Clark County increased 0.6 percentage points in December compared to November 2010. The number of people employed fell 52,239 in December from the year before. The number of people unemployed increased 14,268 to 192,529 in December from the year before.

While Nevada continues to ache with increased unemployment, the U.S. unemployment rate ticked lower 0.4 percentage points to 9.4%. Nevada will likely gain significantly from any improvement in the U.S. economy--as more employed people can afford vacations in Nevada casinos.

Nevada's Economic Index

Nevada is bouncing at the bottom with slight increases from early 2009. Please review the Nevada Economic Report for January for more details.