What state was Sandoval looking at? It couldn’t be ours

By J. Patrick Coolican

Thursday, May 5, 2011 | 2:01 a.m.

Have no worries because all is well!

That was the message Tuesday night from Gov. Brian Sandoval as he announced that glimmers of economic recovery are on the horizon, which has made our fiscal crisis slightly less dire and allowed him to put $267 million back into education.

To bolster his point, Sandoval noted the creation of 10,000 jobs in March and a reduction in the unemployment rate to a mere 13.2 percent.

His plan: Give a tax cut, which is the effective result of allowing taxes passed in 2009 to sunset as the law requires, and ... well, I’m unclear on the next part. I guess it includes reforming education, albeit with less money, and a $10 million “catalyst fund” to lure businesses.

But the plan is working! Urban Outfitters, the hipster clothing and housewares retailer, is bringing 150 full-time jobs and as many as 655 construction and other jobs to Reno with an “Internet Fulfillment Center,” according to the Associated Press and proudly tweeted by Sandoval.

Doesn’t it sound magical? Or vaguely obscene. It’s a warehouse. In Reno.

I shouldn’t mock. Those are needed jobs, and the employee discount will improve Reno’s flagging hipster quotient.

For a dose of reality, I called John Restrepo, chairman of the Nevada Economic Forum, the state’s official forecasting body that gave the more upbeat assessment this week.

I asked him to characterize the economic recovery in Nevada and particularly in Las Vegas.

“Anemic.”

What’s the main reason for the drop in the unemployment rate? “It has nothing to do with a spike in economic activity,” he says. The unemployment rate has dropped because people have quit looking for work or left the state.

What are the odds that we’ll develop a new economic cluster that will free us of the chains of our one-dimensional economy?

“Not in the short term because of the amount of public and private investment and time required to create new economic clusters and transform the economy from one based on discretionary spending to one based on producing.” (Restrepo emphasized he wasn’t commenting on the governor’s policies.)

Are retirees coming here in droves because of our cheap real estate and nice weather (and quick flight to Reno’s Internet Fulfillment Center)?

No, Restrepo says, because health care is a key priority for retirees. Ruh-roh.

Tourism and conventions are recovering, as we knew would happen once President Barack Obama stopped bad-mouthing Las Vegas and got busy catching Osama bin Laden. That’s great. But the other pillar of our economy for two decades — construction — is flat on its back and not getting up any time soon. Las Vegas construction employment in March sank another 9.6 percent compared with a year earlier. There are 65,000 vacant housing units. More than 10,000 housing units received a foreclosure notice in March, according to RealtyTrac, and half the homes sold in Las Vegas that month were to investors. If only we could blow blow blow up the housing bubble.

These stark facts are part of the reason the Nevada Resort Association and the Las Vegas Chamber of Commerce — the Chamber of Commerce! — have called for a tax increase, although conditioned on education and government reforms. They’ve recognized that giving teachers and professors a 5 percent pay cut is not a way to attract talented teachers and professors. Nevada teachers earn 4 percent less than the national average and professors earn 9 percent less, according to a chamber study. They probably recognize that Nevada has one of the most business-friendly tax environments in the country — fourth best, according to the Tax Foundation — and yet, and yet, we’re the nation’s economic basket case, so maybe being a tax haven doesn’t lead to economic dynamism?

Sandoval has rightly criticized Democrats for not having a plan. (Democrats will apparently release their tax plan, finally, today.)

You know what is not a plan? Delusional hope.