Comparing Nevada to other states includes assessing social factors like education and healthcare, as well as economic measurements such as employment and cost of living. Overall, Nevada’s economy is recovering after the economic downturn precipitated by the COVID pandemic and the accompanying travel restrictions and business closures. Nevada’s employment figures still lag behind the rest of the nation, but travel, tourism and convention attendance show healthy gains. Chronic social challenges remain, however. Nevada’s education system receives failing grades, and access to healthcare lags behind national averages. Comparisons to other states not only show how far Nevada has come, but also illustrate how much remains to be done.
Travel & Tourism
Although all the numbers for Nevada’s travel and tourism industry indicate an ongoing recovery from the effects of the pandemic, one statistic best sums it up: convention attendance for the 12 months ending in March 2021 was only about 44,000. One year later, it was nearly 3.6 million. The Las Vegas airport set a new record in June 2022 for volume in a single month, with nearly 4.7 million passengers. Gaming revenue in major markets across the country, including Nevada, is up by double digits from last year, providing an important source of tax revenue for state governments.
Lifestyle
While Nevada is unique among the states in many ways (most mountain ranges, driest state, largest gold producer, etc.), its urban citizens don’t live much differently than people in other parts of the country. They take their families to parks, museums and professional sporting events. Residents may enjoy a day of golfing or a visit to a winery. The main difference is seen in the “population per square mile” figure, which illustrates the vast distances between Nevada’s population centers.
Education
Nevada’s education system has been receiving failing grades in national rankings for decades. Overall, Nevada students are less proficient in math and English than students in other states and are more likely to drop out of school. In the Nevada Business Magazine “Power Poll” earlier this year, 71 percent of local executives surveyed gave Nevada’s educational system a “Below Average” or “Poor” rating. A failing education structure not only affects the future of Nevada’s children, but it also impacts economic development efforts, making it more difficult to attract companies looking for an educated workforce as well as good schools for employees.
Tax Burden
Although there is no state income tax, Nevadans pay an average of 8.19 percent of their household income in other state and local taxes, making it 33rd in the nation for tax burden. Nevada ranks seventh in the nation for business tax environment, with no corporate income tax, no inventory tax, no franchise tax and no unitary tax. Each legislative session brings opportunities to create or increase taxes, especially for businesses, so Nevada’s business-friendly tax environment is always at risk.
Cost of Living
Compared to national averages, goods and services cost slightly more in one of Nevada’s metro areas than in the average city. These numbers are chiefly driven by the state’s red-hot housing market, as well as the relatively high price of gasoline in areas where mass transit isn’t widely utilized. Nevada fares better when the state tax environment is figured in, and a $100 bill actually buys $102.90 worth of lifestyle in the Silver State.
Cost of Doing Business
Locating in Nevada makes sense for any mid- to large-sized business that wants access to West Coast markets without paying California’s high lease rates and dealing with its higher taxes and regulatory environment. Cost estimates provided by The Boyd Company compare, not only lease rates, but also business taxes, payroll costs and workers comp rates. Both northern and southern Nevada offer easy road and rail access, as well as numerous warehousing and distribution facilities. Commercial real estate lease rates for office, retail, and industrial space are less expensive than in many comparable markets.
Healthcare
Access to healthcare has been an ongoing challenge for Nevada, reflected in its rankings compared to other states, where it’s listed as 48th in primary care physicians per population and 45th in access and affordability. Healthcare companies and the educational systems are making concerted efforts to improve the situation by building more facilities and creating programs to provide residencies for new doctors. The pandemic brought the shortage of healthcare professionals into sharp focus, making it more urgent than ever to make progress in training and retaining doctors and nurses to serve Nevadans’ healthcare needs.
Housing
Nevada housing prices in the first half of 2022 were up around 20 percent from the previous year, a trend seen across the U.S. In response to increased demand driven partly by low interest rates, the seller’s market was characterized by bidding wars for scarce residential properties. Builders across Nevada responded by pulling permits for more housing. Home sales finally cooled in June as the Fed raised interest rates in an attempt to curb inflation, but prices still remain substantially higher than last year. Compared to other states, Nevada has a relatively low rate of foreclosure filings.
Employment
Before the pandemic (February 2020) Nevada’s unemployment rate was a healthy 3.6 percent. After the bottom dropped out of the travel/tourism industry, unemployment peaked at 28.7 percent in April 2020. Since then, it’s been a tale of recovery and reinvention. Overall, unemployment stood at 4.7 percent in June 2022, the third-highest rate in the nation. While the tourism sector is still down 10 percent from its pre-pandemic peak, trade/transportation/utilities, which includes warehousing and distribution, is up nearly 10 percent. It remains to be seen whether this shift is permanent; depending less on tourism and diversifying into other sectors has been a long-term goal of Nevada’s economic development agencies.
Business Rankings
Compared to states with high tax rates and less business-friendly regulations, Nevada is an attractive place to start or relocate a business. Commercial real estate rates are competitive, open land is plentiful, and the climate is more favorable than in states with severe winter weather. However, companies looking to relocate must consider the state’s education system, access to healthcare, and availability of affordable housing for employees. Nevada must overcome these challenges to ensure it remains competitive with other states.
