A New Hope: Power Poll 2015

With the recession having reaffirmed Nevada’s “Battle Born” motto, this recovery has added a new twist on another name for this state, the Silver State. Company owners and executives are seeing the silver lining in a tough economy as businesses grow and are leaner and more efficient than ever. And, while hopeful of the sustainability of this growth, executives remain cautious, ever aware of the ups and downs this state has seen in recent history.

This year marks the thirteenth annual Power Poll conducted by Nevada Business Magazine. In this series, business owners and executives have been asked to weigh in on a variety of issues. From business to personal viewpoints and beyond, they were asked to give their thoughts on what the future may hold for the state. While not a scientific poll, the series has traditionally been representative of the mind-set of executives in Nevada.

This survey was sent at the beginning of 2015 to decision-makers throughout the state. They were asked to answer a series of questions designed to give readers a fairly accurate gauge of what Nevada executives’ thoughts are in today’s social and economic landscape. The poll also helps predict where the state may be headed in the future. This year’s survey garnered hundreds of responses, the results of which are illustrated in the following pages. In addition, previous year’s polls are shown for comparison purposes.

As is typical of the Power Poll, there was a nearly even split between business owner and executive responses with the former making up 55 percent of respondents. It is interesting to note that, while fairly even, the majority of respondents have switched from executives to business owners this year. Regardless of which title is held, they represent companies that are firmly rooted in Nevada. The majority of poll-takers work for businesses that have been around for 20 plus years and 79 percent have been doing business in Nevada for more than a decade.

The Silver State’s Silver Lining

As the state moves further from the oppressive recession, it becomes apparent in several key industries, most of which continue to show signs of improvement. When asked how Nevada’s economy compares to last year and where they expect it to go this year, the vast majority felt that both indicators were much improved. Nearly 80 percent affirmed that Nevada’s economy is better than it was a year ago and just over 80 percent expect the economy to improve over the next 12 months.

“It’s going to be strong,” said Don Bruce, manager and owner of 1-800-Got-Junk?, a disposal service based in Reno. “Last year it was the bounce back, now it’s building with progress. Things are solidly better in the Nevada economy.”

“There’s a lot of hope in the market with the diversity of the economy that has happened as a result of the downfall,” added Chet Opheikens, vice president of R & O Construction. “A lot of leaders in our community have reached out to see what kind of opportunities are out there for all of us.”

Individual businesses, in many cases, reflect Nevada’s improving economy. And, while Edward Vance, CEO and founder of EV&A Architects said he is, “cautiously optimistic,” many executives indicated that they expect the coming year to bring a boom to their business. Vance added, “I hope it will be better. Things are on the upward swing, but it’s not as robust as I’d like to see it. I think it could be slightly better.”

While the majority (65 percent) of respondents reported a bottom-line that is better than it was a year ago, a whopping 81 percent said they expect next year to be either somewhat or much better for their business. Windom Kimsey, president of Tate Snyder Kimsey Architects said that as, “an architecture firm, the recession lasted a little bit longer in our business, especially for people who do public projects, because of a lack of funding from government agencies. I see that frost melting away and some opportunities coming up.”

Speaking to Nevada’s distressed commercial real estate industry, Lonnie Roy, principal engineer at Broadbent & Associates, Inc. added, “We will be better. I see additional construction going on in Southern Nevada. There’s a slight uptick in the clients we serve and projects we’re proposing on. I see positive signs.”

Taxes

Business owners tend to think of Nevada as a business-friendly state; with nearly 90 percent agreeing, there’s a clear consensus.

“We really are business-friendly,” said Vance. “That’s a strong positive because I do work all over the country. We can get entitlements on projects and property faster than any place I’ve ever been.”

However, many executives expressed concern over taxes in the state and whether Nevada is headed in the right direction in that regard. Sixty-eight percent of respondents felt that Nevada businesses already have too much of a tax burden.

“Recent speeches by the governor lead me to believe that you may be seeing higher taxes,” said John Kley, division president for First Savings Bank in Las Vegas. “We need to be attracting and growing our industry and diversifying our marketplace. We can’t do that if we have unfriendly tax laws that don’t encourage businesses to move from California, Arizona or other surrounding states.”

Gabrielle Sansone, director of large group sales with Anthem Blue Cross Blue Shield added, “A lot of companies from California move to Nevada because we have a more positive business tax structure. However, I worry about this new tax the governor is going to pass. I get that we need to raise money for schools but I’m concerned it’s going to hurt businesses to the point where they don’t come here.”

Speaking of concerns over future taxes, only nine percent of respondents said they would support a state income tax if it were proposed. Sansone said that, “part of the reason Nevada is so attractive is because we don’t have a state income tax.”

When asked about two of the state’s largest industries, gaming and mining, in relation to tax burden, many felt they pay a fair share. Just over 70 percent said Nevada’s gaming industry pays their share and nearly half of respondents said the same in regards to Nevada’s mining industry.

“We need to be smarter about how we spend money, not figure out how to get more so we can spend more,” said Vance.

Help Wanted

One area with dismal numbers in the midst of the recession that has seen an uptick in recent years is employment. In the past year, 52 percent of executives hired, with only 8 percent of those polled showing a decrease in their staff. Even more encouraging, nearly 60 percent of respondents expect to hire in the next year.

“In my industry, we have to look ahead,” said Opheikens. “As far as my own internal staffing, that will likely stay the same, there may be a slight increase. However, I do see the trades, the subcontractors, their needs will increase dramatically because of the type of projects that are being proposed at this time.”

Two employment-related issues that are unpopular with business owners are a proposal to increase the minimum wage and the necessity of unions. Only 39 percent of executives support a call to increase the minimum wage in Nevada.

Kley said that companies, “should be controlling their own bottom line through the use of things that make sense relative to their business. You should be a good corporate citizen and pay your people appropriately. I don’t think it needs to be dictated to us.”

In addition, union’s have declined in popularity in recent years with only 23 percent of respondents calling them necessary to the state’s workforce.

“It’s a right-to-work state,” added Kley. “I encourage people to allow free economies to operate freely.”
Impacting Society

Key issues have become a focus for Nevadans in recent years. One such issue, education, has been an blemish on Nevada’s record for years. As the state strives to overcome an appearance on the bottom of several rankings for education in this country, executives add their voices to the mix. Sixty-two percent of respondents would give education in Nevada a D or below; unfortunately, that’s a failing grade.

“We’re overburdened with administration and policy rather than [having a] focus on teacher’s needs to appropriately progress the students,” said Bruce. He added that, “We could do so much better and, for long-term economic growth, we need to do so much better.”

When asked what the most important need is for Nevada to fix education, the highest percentage (31 percent) was found with parental involvement. Reform and funding tied for second-place with a voucher-program being ranked last among the six options given.

Kley suggested that, “we spend an awful lot of time re-reforming without necessarily getting to the cause. There’s a lot of new conversation about reform of education. Perhaps we should just concentrate on the fundamentals of education.”

Other issues that were addressed in this year’s poll include the Affordable Care Act (ACA), legalization of marijuana and gay marriage. Although not as concerned as last year, there is still concern amongst executives regarding the ACA. Over half indicated that they were “somewhat” or “very” concerned about the Act.

“The paperwork part of it has become more of a struggle for the company,” said Roy. “There’s been a complete lack of clarity of where we’re going for the past two years.”

Sansone added that, “When they wrote this law, they didn’t take into consideration all of the ramifications and abrasions that are going to happen. What it does is force employers to cut back hours, lay off people and start thinking differently because of the ways the laws are written. It’s not employer-friendly.”

For marijuana legalization, executives are closely split at 55 percent against legalization. Gay marriage shows a wider margin among executives with only 33 percent unsupportive.

Referring to gay marriage, Sansone said, “I don’t care one way or the other, it doesn’t bother me.” While Bruce, who spoke out against the practice added that, “It conflicts with everything I know ethically and morally. While I support people’s freedom of choice, I do not support that it becomes a government-sponsored choice.”

Politics As Usual

The most recent election showed a dramatic change in elected officials with Republican gains in many states, including Nevada. This change is indicative of the people’s demand for change. When asked to grade elected officials, executives responded, in many cases, as they had in previous years. However, with new names on the list this year, it’s interesting to note what grade executives would give some officials based on how well they’re expected to address Nevadan’s interests.

As has become a trend for the past several years of this poll, President Barack Obama received a “D” for his work performance.

“I don’t get the feeling he’s been as good at compromising,” said Kimsey. “His agenda requires more compromise and it just hasn’t worked out that way.”

On the opposite end of the spectrum, Governor Brian Sandoval has consistently been given a “B” for his efforts on behalf of the state. Opheikens said, “He’s put together the proper leaders within the community and has created opportunities through economic development and diversification. He has helped lead us from the greatest recession we’ve ever known. Do I agree with him raising taxes on all small businesses? Absolutely not.”

Issues of State

For the past few years, this poll has asked respondents to rank how concerned they are about six issues that continue to plague Nevada. This year, leading the list for executives is the quality of education in Nevada which received the highest percentage (37 percent) in the “Very Concerned” category. The least concerning issue was transportation which implies that executives think our state agencies are doing their job in that respect.

Another relatively new section we’ve asked executives to rank is government involvement. This question asked respondents to indicate how concerned they were with the government being involved in certain areas that affect their lives. The majority (32 percent) said they were concerned about government involvement in education.

“I am a little bit concerned that we have centralized so much power in the Department of Education,” explained Roy. “There may not be economy for school boards and the other local parts of education.”
Non-ACA related health issues was the least concerning for executives (15 percent) with religion and surveillance or privacy issues running a close second and third place, respectively. Kimsey did indicate that the, “government should be 100 percent steered clear of religion. Church and state don’t mix very well.”

All in all, this year’s poll illustrated the new, hopeful attitude that many business owners and executives have towards the economy. With companies looking to hire and expand and a state economy that has seen several economic boons in recent months, the Silver State’s future is looking bright.