What if Nevada stops growing?
Does the state know how not to be the fastest growing state?
The notion has been creeping around elite circles for months, though there has been little public discussion of it. And the state demographer—the person who keeps track of noses in Nevada for the state government—has nothing about it on his website. But still the talk goes on that Nevada may not be growing anymore, that, indeed, it may be losing population.
The idea, to those who have lived here for a while, is almost a contradiction in terms. Nevada has, in the memory of most living residents, been defined by its growth. So if Nevada isn’t growing anymore, what is its identity?
The most recent official population estimate for Nevada is 2,738,777, with most of that—71 percent—in Clark County.
In 2006, the state fell out of its longtime spot as the fastest growing state in the nation, replaced by Arizona. But while Nevada and Arizona had occasionally switched spots on the list in the past, this time Nevada is showing few signs of regaining its place. In fact, there are indices that suggest the state is losing population. Since then, the Census Bureau has dropped the state down another six places in the ranking. New arrivals have been declining for several years. This year, school enrollments have dropped sharply. Even in Lyon County, usually the state’s fastest growing county, they’re down. No one can remember the last time school enrollments declined in the state. U-Haul recently reported data indicating it helped move 1.6 percent more people out of Nevada than in so far this year.
Las Vegas once had so many businesses flooding in that it didn’t even have a retention program like the state and Reno (a retention program works to keep businesses from leaving). Now it does.
California, traditionally a supplier of new Nevada residents, has a lower jobless rate than Nevada, even though it too is hurting.
The idea that Nevada might actually be losing population is one that state leaders avoid discussing, as though ignoring it will prevent it happening. Losing population, after all, is so South Dakota. Nevada can’t be that. This kind of denial has a history. For decades after the collapse of the Comstock Lode, according to historian Guy Louis Rocha, “there was a belief that there was more ore in there if they could just find it. … By the time they got to the 1880s things were looking very, very bleak.”
Still, as late as Oct. 22, 1933, Reno’s Nevada State Journal carried a front page story on the “comeback of the Comstock,” a story that ran regularly in Nevada newspapers in the years after the Lode’s decline without ever actually being true until the onset of major tourism driven by the television program Bonanza.
But not discussing it doesn’t make it go away. What it does is prevent the state from planning for a post-growth future, if such turns out to be the case.
It also could mean an end to low taxes for Nevadans, of no more living off growth. Former Nevada higher education chancellor Jim Rogers wrote in a recent report:
“Monies generated by newcomers created a Ponzi-scheme economy. Those coming in subsidized those already in Nevada. Over time, neither long-timers nor new residents were required to pay any substantial taxes, causing necessary services, including education, to suffer.”
A lull in growth could be good for Nevada, said one surprising source—Carole Vilardo, executive director of the Nevada Taxpayers Association, a business group. She thinks it would be a good time to take a look at the state’s tax system.
“If recovery comes, and we don’t return to the fastest growing state in the nation, I think it gives us breathing room to re-look at delivery of [government] services. … It allows you to plan,” she said. “And hopefully people would think more about putting away—and I mean governments—putting away money and not spending every last cent that we get in when the economy returns, so that there is a cushion, so that we’re not sitting where we are right now that you’re looking at ‘Where do we get more tax revenue?’ Because the lunacy is you try raising taxes at a time when the reason you’ve got a problem is because people aren’t spending money, whether they’re business or individuals, so your tax revenue is down. So what do you do? You increase taxes or you expand the taxes in a bad economy, and you get less. So hopefully when we return to a good recovery, we get the breathing room we need to take a long hard look.”
And if the state never returns to being a growth state?
“So long as your economy diversifies, you’re not going to have a problem if we don’t have the same type of growth.”
There’s the rub. Nevada has in living memory always been built on tourism and construction. Efforts to diversify the economy have been minimally successful.
University of Nevada associate professor Alicia Barber has written a book, Reno’s Big Gamble, that focuses a lot of attention on how the city’s economic life has changed and evolved over the years. A low growth era, she said, jeopardizes some positive things that seemed to be underway downtown.
“[I]t seems to me a lot of the impetus initially for a lot of the changes happening downtown came from out of state. I think a lot of people have been moving here from other cities who are interested in kind of an urban lifestyle.”
She points to the downtown conversion of the Golden Phoenix casino building into apartments and the construction of the Palladio as properties that could bring people who want a sophisticated downtown lifestyle to Reno. But, she said, the rest of the package after the condos isn’t there to get them to actually make the move. Many retail spaces are vacant or being vacated (including those on the first floor of condo structures), a large drug store between the Montage and Palladio never opened, and there is no grocery store in the downtown.
“It had this potential to have this vibrant, energetic downtown. We’ve already seen some of this kind of falling off because of the economy, you know, with the condos not being able to get filled,” Barber said. “But I think there’s a lot of potential.”
Rocha said there’s a difference between the denial that followed the decline of the Comstock, and today’s reluctance to plan for a post-growth Nevada, though it has the same kind of attitude behind it: “We’ll come back.” This time, he said, the denial comes with consequences of not getting the state ready for the future.
“What I see now is the same kind of thing, and it has been for a while—‘We came back after 1981-82. We came back after ’91-92. We came back after 9/11.’ You know, ‘We came back.’ And they kept growing, and they kept getting bigger, and I think the attitude was, ‘Well, this is not going to stop. We’ll always get bigger and better.’ And what they were failing to do or maybe what makes this different is, ore is where you find it. … But the signs on this one, the indices were out there. All you had to do was look across the state line and watch these Indian casinos growing to be substantial operations and that the landscape was going to change. I don’t know how they could have missed this.”
The state has made efforts to diversify the economy beyond gambling and construction, but the results have been less than spectacular. For a long time, growth of gambling kept up with the growth in businesses lured to Nevada, with the result that the casino sector of the economy did not change. Yet the state did not accelerate its efforts.
That era of casino growth is clearly past. There are reports that tribal casinos in California have Las Vegas-style mega-resorts on their drawing boards, which would hit Nevada particularly hard. Up to now the heaviest loss of business to Native American operations in California have been in Reno while Las Vegas and Lake Tahoe have escaped major losses in customer shares.
There are also indications that the bloom is off the rose on expansion of gambling generally, that the industry may have reached its zenith. Atlantic City, an east coast gambling Mecca, for instance, is struggling to survive and looking to non-casino ways to build its economy.