Nevada is worse off

Economic development and diversification in Nevada have for decades been largely ineffective.

The problem over the past decade is that for every nongaming job created by economic development initiatives, dozens more jobs in the gaming industry were created with the opening of megaresorts such as Wynn Las Vegas, Encore, Palazzo and CityCenter.

State statistics show that despite all the talk and money spent on economic diversification in Nevada, the economy is less diversified as gaming’s domination has actually grown.

About 305,000 Nevadans were employed in the leisure and hospitality sector through May — equaling 27.2 percent of the state’s 1.123 million jobs.

With the near-decimation of the construction and real estate development industries, that percentage is up from 26.4 percent of the state’s workers employed in leisure and hospitality in May 2006.

The growing dominance of the gaming industry in Nevada’s economy has created two problems.

Despite being bigger players in the state’s economy, gaming companies are suffering from an oversupply of hotel rooms and excessive debt taken on during the boom years. As gaming companies have cut jobs in response to the recession, the laid-off workers have had difficulty finding other work because of the lack of nongaming job opportunities.

Second, the state and local governments have by necessity been forced into excessive reliance on gaming taxes and other taxes largely passed on to tourists.

Nongaming businesses, in the meantime, pay nowhere near their fair share of taxes.

This means the state’s colleges, universities, K-12 schools and other government programs have long been woefully underfunded and face more deep cuts because of the slowdown in gaming.

We’re hopeful that a new commission set up by Lt. Gov. Brian Krolicki — head of the state Economic Development Commission — will be the impetus for action or at least for heightening the discussion on this issue.

The 27-member commission, called the New Nevada Task Force, has a distinguished membership including former Govs. Richard Bryan and Kenny Guinn; Glenn Christenson, chairman of the Nevada Development Authority; Steve Hill, Las Vegas Chamber of Commerce senior vice president; Danny Thompson, AFL-CIO executive secretary-treasurer; Mike Klowden, Milken Institute president and CEO; and Brian Greenspun, whose family owns this newspaper.

We’re hopeful that as the commission investigates the issue of diversification, it will help move the state’s economic development efforts past the current “cheap place to do business” mentality.

Nevada needs companies that are eager to reinvest in the communities they do business in. Nevada needs companies that want high quality government services and good schools for their employees’ children.

Keeping in mind that smart businesspeople know you get what you pay for, consider the advantages of doing business in Nevada that don’t involve cheapness:

• Nevada’s growing alternative energy industry — powered by abundant sunlight and geothermal resources — offers numerous opportunities for both entrepreneurs and established companies.

• Our state and local governments are quick to assist companies looking to expand with permits, licenses and site-selection services.

• Reno and Las Vegas are strategically located and have ample highway infrastructure and airline service so companies can effectively serve customers in other cities throughout the West.

• Small businesses will find plenty of private and government contracting opportunities in Nevada. Nellis Air Force Base and the Nevada Test Site are just two of the many government agencies constantly soliciting bids for work and supplies. The gaming industry, even during the recession, is a big source of business for small contractors.

• From Lake Tahoe to Great Basin National Park to Lake Mead, we offer outstanding recreational opportunities.

Our negative elements — inadequately funded schools and government agencies, and the “Sin City,” family-unfriendly reputation of Las Vegas — are things that can and should be fixed.