Capital losses

It’s not all that difficult to tell whether one downtown Carson City café is a mom and pop-style business. Its name is Mom and Pop’s Cafe. It does a good business, in part because it’s principally a breakfast and lunch place and is practically hemmed in by government office buildings filled with customers. Just north is the attorney general’s building and the secretary of state’s annex office. Across the street are City Hall, the Nevada capitol, the Supreme Court building, and the Nevada Legislature.

Pop is Doug Cramer, and he says that in this economy, he’s getting along better than most businesspeople in town. But business is still down for him.

“I noticed that semi-regular, regular customers were not coming in as much. … A lot of my neighbors are really complaining how slow it is. Their overhead’s really high. … But I know my own spending is way off compared to what it used to be, the last few years. I don’t spend as much money.”

He’s happiest when the legislature is in town.

“I’m the only guy in Nevada that wants them to meet every year, and I’ve been saying that since 1995. I remember the first year, ‘95, I opened up, and this place was packed with suits and ties, and I’d been smiling and enjoying it, and one of the gentlemen said—senator, same food every day, chicken sandwich, corn and beans—and so he said to me, ‘You’re going to miss us when we’re gone.’ “

Cramer hadn’t realized the lawmakers were in session for only a few months every other year. An 18-month period when the legislature was out of session was a jolt.

When the lawmakers meet, it’s always an economic shot in the arm for the capital. Winter in Carson City, as in most Nevada tourist towns, is a down time. The legislators take apartments or motel rooms. A few bring their families with them. They use dry cleaners and grocery stores, barber and beauty salons, gas stations and drug stores, go to movies and restaurants.

And it doesn’t stop with the legislators. An entire temporary workforce is hired to serve them, sending paychecks out into the community for 20-plus weeks. Ten times more lobbyists than lawmakers come to town, and they engage in the same kind of spending, some of them also taking lodging in the capital. So far this year there are 634 lobbyists registered, 483 of them paid, the remaining 151 volunteer—but who still spend money in the capital.

Thus the lawmakers and their living costs help the capital, and it’s been a long time since it was so badly needed as this year.

But also this year, the capital is serving a purpose for the legislators—helping to keep them in touch with what life is like outside the legislative building.

Lawmakers lead an unusual life when legislative sessions are held. All their equipment, like computers, is top of the line. Aides and security officers hold doors open for them, and as weekends approach, chauffeur them to the airport for flights to Las Vegas. More often than not, the building itself has been renovated during the 18-month interregnum. It’s like living inside a privileged, hermetically sealed can. Their ventures outside, particularly when times are as bad as they are now, are helpful in reminding them that people are hurting.

Sen. Mike Schneider of Clark County is staying in an apartment in south Carson. “It’s the same complex I stayed in the last two sessions, so it’s my third session there. … Last session it was full, and this time the apartment complex is looking like it’s probably 40 percent vacant.”

Surprisingly, the rent is still the same as two years ago, another sign of the economic slowdown.

Schneider was chatting at the Glen Eagle with a bartender who told him there are a number of restaurants that are managing to stay open, but only until the end of the legislative session. Then they’ll close. Schneider said wryly, “They wish it was a full-time legislature.” The same day Schneider made these comments, the front page of Carson City’s Nevada Appeal reported that Chili’s Grill & Bar on College Parkway in north Carson would close four days later. A Sizzler on North Carson Street had already closed down the previous weekend. A few days earlier, the Appeal had carried a photo of a sign at the Dura Bond Bearing Co. plant in the city: “We are not accepting applications for employment.”

December unemployment figures released a few days ago showed both Carson City and adjoining Lyon County—where some Carson workers reside—each had jobless rates higher than the 9.1 percent statewide average—9.4 in Carson, a whopping 12.1 in Lyon. The Carson City figure reflects 80 people laid off last month from a Chromalloy plant. That’s a lot in a town of 50,000 people (100 workers were affected by the Chili’s closing). The Carson workforce is estimated at 29,700, with those out of work at 2,800.

The plight of Carson and adjoining counties is a constant reminder to lawmakers of their first task this year, and some legislators like Sen. William Raggio and Speaker Barbara Buckley are saying they need to give job creation more attention and funding than they had originally expected as recently as last month.

Nevertheless, except for immediate impact such as apartment rentals and restaurant meals, some local businesspeople have difficulty seeing linkage between what the lawmakers are doing inside the legislative building and any impact on Carson City’s economy. “It’s hard to relate it,” Cramer said.

The legislators, however, see what is happening in the capital as evidence of the urgency of their work. It even affects some seemingly unrelated issues. In November, Washoe County voters approved an advisory ballot question on whether they would support giving the Regional Transportation Commission the authority to raise local taxes, supposedly in keeping with the cost of living. The notion faced an uphill battle at the Legislature, where lawmakers are always reluctant to give home rule to local officials. But it is now being sold as a “job creation” measure, the idea being that if more money becomes available, RTC will be able to hire more people. (Something similar happened in the 1980s after a recession, when diversification of the state’s economy was seen as a remedy to future Nevada business downturns. Everyone, such as university lobbyists seeking a second engineering school, advertised their projects as aids to “economic development.")

How much effect state legislators can have on the state’s economy is not altogether clear. In the best of times, a state government doesn’t have a lot of money for job creation. This year, there are expectations that the lawmakers will get some funding from the yet-to-be-approved federal stimulus legislation that state legislatures can use for that purpose. But a substantial portion of that money is expected to be earmarked in some fashion, either for existing programs like Medicaid or as the federal match for money the state must provide.

It will be some time yet before legislators know clearly the difference between what they want to do to create jobs and what they can do. In the meantime, the import of those decisions is all around them.