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Jul. 30, 2008
Copyright © Las Vegas Review-Journal

NEVADA ECONOMY: May sales soft for state businesses

Taxable revenue from deals down 12 months out of 14

By ED VOGEL
REVIEW-JOURNAL CAPITAL BUREAU


Graphic by Mike Johnson.

CARSON CITY -- Nevada's economy continued to sputter in May as business sales of taxable goods dropped 1.5 percent from May 2007, according to a report released Tuesday by the state Department of Taxation.

Through the first 11 months of the fiscal year, sales in Nevada are off 2.1 percent from the same period a year earlier.

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    • The report was just more bad news for a state already reeling from growing unemployment and falling gaming revenues.

    Since the Legislature concluded its special session on June 27 by cutting state spending by $275 million, the Nevada unemployment rate has risen to a 14-year high of 6.4 percent and gaming has gone through its worst month in at least 10 years, with gaming tax receipts dropping 22 percent.

    However, Gov. Jim Gibbons said the lower-than-expected sales tax revenue won't require any "immediate adjustments" to the state budget.

    "The sales and use tax collections for the month of May confirm what we have already seen from other economic indicators, that Nevada's economy struggled during the second quarter of 2008," Gibbons said in a statement.

    "Nevada continues to see strong construction activity in the south and a modest increase in consumer spending," Gibbons said.

    Gibbons and the Legislature have cut state spending by a total of $1.2 billion since January. The cuts come on the state's two-year budget that ends June 30.

    In 12 of the last 14 months, sales tax revenue has declined compared to the same month a year earlier. The two months where increases were reported had gains of less than 1 percent.

    In May, businesses sold goods valued at $4.05 billion, dropping 1.5 percent, although actual sales tax receipts for the month were off by 3.87 percent.

    That was $3.1 million less than the state Economic Forum projected when it met on June 20.

    For the first 11 months of the fiscal year, state sales tax receipts were $881 million, or 3.3 percent less than the $911 million collected during the same period the previous year.

    The bright sectors of the economy included accommodations, up 21 percent; construction industry sales, up 16.2 percent, and sales at food and beverage stores, up 7.6 percent.

    One of the biggest declines was in automobile and auto parts sales, down 14.8 percent to $436.4 million.

    During May, businesses in 10 of the state's 17 counties reported declines in taxable sales.

    Clark County businesses sold goods worth $3.031 billion, down 0.5 percent, while Washoe County sales were $554 million, down 6.2 percent.

    Since July 2007, only businesses in Humboldt, Lyon, Mineral and Lincoln counties have reported overall increases in business sales.

    Contact Capital Bureau Chief Ed Vogel at evogel@reviewjournal.com or 775-687-3901.

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    Ebb and Flow wrote on July 30, 2008 01:24 PM: This is a cyclical economic downturn. The pendulum will eventually swing the other way and Vegas will once again be prosperous. Not this year, but maybe late 2009 or early 2010.


    Truth wrote on July 30, 2008 12:29 PM: hilobomacaine - it really isn't as difficult as media and doom and gloomers make it out to be...Vegas will have between 2300-2400 resale closings during July 2008 vs 1535 July 2007...so buyers are coming back into the market and banks are lending.


    hilobomacaine wrote on July 30, 2008 12:04 PM: where are all these buyers going to find a bank to loan them the money for your house??


    Quatto-lives wrote on July 30, 2008 11:22 AM: Mac,
    What you need is to get one of those government jobs. However, you may first want to go back to school and learn spelling and grammar. Wait, those schools are paid for with that stolen money. Darn!


    Robert London wrote on July 30, 2008 11:18 AM: Dan - interesting idea, splitting Nevada into two along a north-south divide. Only problem is that Las Vegas will have no water if they cannot siphon it from northern Nevada groundwater. Just ask Utah what they think of our quest for their groundwater.

    For those waiting for a spike up in Las Vegas real estate I will remind them of the worst four letter word in any trader's vocabulary - hope.


    Mac wrote on July 30, 2008 11:09 AM: I wonder if the point of this article is really about the business health in NV or simply about the amount of stolen money the state can take from folks thru the process of taxation?

    All the gov't employees and the ones who are the recipients of the stolen loot are all crying their eyes out. Mo' money! Mo' money! To heck with stuggling businesses, we need mo' money!


    Truth wrote on July 30, 2008 10:57 AM: dudeimtheman - I agree, and you said it, if "someone" is selling because they are relocating or because of financial hardship SOME will sell lower, but, 98-99% of the population is not going to relocate or face the hardship. Many of those relocating may also choose to rent the house out to you, rather than let it go for substantially less than what they paid.


    Truth wrote on July 30, 2008 10:40 AM: Creep - Think of it this way - Let's say you live in a community of 200 homes. 8 of the homes in the community go into foreclosure and sell at 50% less than what you and the other 192 homes in the community paid. The 8 foreclosures sell. Now what? Can I purchase your home from you at the same price of the foreclosures? No. What about your neighbor? Oh, they won't either. Well, now if I want to live in your community, I guess I'm going to have to pay more...A LOT more than the current foreclosures are selling at.


    dudeimtheman wrote on July 30, 2008 10:29 AM: "the 98-99% of LV homeowners who are not in foreclosure are not going to give their homes away like the REOs". Hey Truth, wanna make a bet? If someone is selling because they are relocating or because of financial hardship, they will sell at the going market rate or they will not sell their home. Oh, good luck with that "spike" theory as well.


    Rob L. wrote on July 30, 2008 10:29 AM: "Great news.
    Its about time the residents stop giving sales tax money to the cops by not shopping. We have too many cops already and they are sending a bad message to the visitor's.

    Best shop on line or in another state.
    Anything is better than this state.
    Stop supporting terrorist hiding behind the badge."

    Then move, loser.


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