No-grow Nevada

California’s neighboring state may simply not be growing anymore

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 Web site. But still the talk goes on that Nevada may not be growing anymore, that indeed it may be losing population.

The idea is almost a contradiction in terms. Nevada has always been defined by its growth.

The most recent official population estimate for Nevada is 2,738,777, with most of that in the Las Vegas area. In 2006, the state fell out of its longtime spot as the fastest-growing state in the nation, replaced by Arizona. Since then, the U.S. Census Bureau has dropped the state down another six places in the ranking. New arrivals have been declining for several years. This year, even school enrollments in Nevada dropped sharply. U-Haul recently reported that it helped move 1.6 percent more people out of Nevada this year than last.

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. But not talking about 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.

All of this could also 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, president 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 relook at delivery of [government] services. … It allows you to plan,” she said.

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.

“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.”

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 megaresorts on their drawing boards, which would hit Nevada particularly hard. Up to now, the heaviest loss of business to American Indian 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 noncasino ways to build its economy.