It’s been 20 years since the first “Power Poll” survey was sent to Nevada executives and the world looks very different than it did at the turn of the century. Nevada’s economy wasn’t quite as diversified, the population was growing at a record rate and the state’s housing crisis was just on the horizon.
A crystal ball may have helped the Silver State avoid some of the more challenging issues but nothing could have prepared Nevada, or the world, for the pandemic and fall-out of business closures on a wide scale. The massive fluctuations in worldwide economies and uncertain markets have led to a roller coaster economy that has hit some states harder than others.
For Nevada, the positive of riding that roller coaster is that executives here have become adept at seeing trends and adapting quickly to an economy that rapidly changes. When the state’s business community, which is chock full of optimists, is added to the mix, the roller coaster’s highs are more moderate, and the lows are more manageable.
“Our sense is that we are in the middle of that process now in terms of a retraction in the economy,” said Bob Brown, president and CEO of Opportunity Village, an almost 80-year-old nonprofit in southern Nevada which assists adults with disabilities. “The thing about Vegas is, you have the optimism that it’s not a hard recession, tourism will pick up and we’ll escape that [downward] trend.”
Opening the same year as the first “Power Poll” Vineburg Machining in Carson City has a unique perspective on the changes in the northern end of the state. “We’ve been here since 2003 and continue to grow,” said Gerd Poppinga, Jr., vice president of Vineburg. “Nevada is a good business state to work in and the local economies and businesses here have helped us succeed. There’s a lot of potential here so that, at any one time, we could have a million-dollar contract come through the door. There’s a lot of opportunities for us as a small business.”
The 2023 “Power Poll” was sent to business owners and executives based in Nevada over a month-long period earlier in the year. The questions on the poll may vary slightly year-to-year but those participating trend similarly each year. The past two years have seen a slight increase in business owners responding, as opposed to business executives, with 73 percent of the former filling out the survey this year. In 2020, the year of the pandemic, that number was more evenly split between executives and owners.
Those responding also follow the state’s population in that the majority of those participating are in southern Nevada with 16 percent representing northern Nevada, 82 percent in southern Nevada and only 2 percent in the rural areas. However, a large portion of participants have offices statewide (20 percent). The “Power Poll” also tends to attract respondents from older companies with over half indicating they’ve been in business for over 20 years.
Economic Health
The general consensus for Nevada’s economic health is that it continues to improve. No one would argue that the state has had more than its fair share of challenges. After the financial crisis and Great Recession, the state enjoyed a brief period of stability and was just beginning to flourish when COVID arrived. The pandemic brought challenges to every economy but economies that relied heavily on tourism were hit harder than most. For the first time in remembrance, the Las Vegas Strip went dark. For Nevada, that signaled a warning that economic diversification is more important than ever.
Fortunately, state leaders and regional development agencies took the lessons learned from the Great Recession to heart and had made significant inroads to diversification. Northern Nevada, in particular, has moved far from relying solely on tourism and brought in manufacturing and other industries to round out the economic growth.
“Gauging what we’ve seen and what’s ahead of us, Nevada’s economy should be somewhat better [in the next year],” said Poppinga. “We do have a more balanced government, hopefully they can work together. Northern Nevada has great growth potential with the industries coming here to put an influx of money, sales tax revenue and more employees. I think that will spread throughout the community which will benefit everyone.”
Even while state leaders work to bring in diversified businesses, tourism remains a huge part of Nevada’s bread and butter, especially in southern Nevada. And, many feel that with sports increasing in the state, the tourism economy is beginning to bounce back better than ever.
“Just go walk the Strip,” said Samuel Schwartz, principal, Schwartz Law. “You can see the economy is doing great as far as tourism goes.” That being said, Schwartz expects Nevada to see a slight dip in the next year or so.
Tonya Wagle, vice president of business development at First Savings Bank, has a slightly different perspective and believes that dip is already here. “People are still doing deals, it’s just a lot slower,” she said of the economy. “It does take some time for the cycle to move and [for] the Fed (Federal Reserve) to see the reaction they’re wanting. I expect sometime like mid- to late-2024 for it to pick back up and for the Fed to strategize a little differently.”
The majority of poll respondents felt that Nevada’s economy was about the same as last year (42 percent) and many of them also expected it to be somewhat better in the next year (39 percent). “My perspective is that the economy seems to be similar to last year,” agreed Dr. Christina Madison, founder and CEO, the Public Health Pharmacist. “Obviously, there’s been some things that have occurred in the banking sector and around inflation and interest rates that look like there may be some challenges down the road. But, as of right now, the prospects for me within Nevada seem to be very similar, if not slightly better than last year.”
Executives were mostly positive about the prospects for their own companies. Over 50 percent responded that their business’ bottom line is better than it was last year and over 60 percent expected it to be better still moving into next year.
The Tax Man Cometh
Everyone’s favorite topic, especially in early spring, is taxes. Well, maybe not. But it is certainly a topic of discussion and, as tax season winds down, business executives look to the legislature to see what’s next in regard to taxes. While running for office Governor Joe Lombardo made many promises in regard to taxes, all of them centered around his promise to not raise taxes. He reiterated that promise in his first State of the State address where he discussed how he would be spending his $11.4 billion budget. A budget that includes over $2 billion more than the last budget and is full of tax revenue from some of Nevada’s largest industries.
Two of those industries, gaming and mining, have been contributing massive funds to the state’s coffers for years. “Those are the two big ones everyone talks about,” said Poppinga. “I know gaming is probably paying the lion share, I know it’s billions of dollars of revenue for Nevada.”
“I think they’re pulling their weight,” said Schwartz. “I don’t know that there needs to be wholesale changes there.” Respondents to the poll agreed, 73 percent felt gaming was paying its fair share and 70 percent said the same of mining.
Overall, most executives agree that Nevada businesses don’t have too much of a tax burden and that Nevada is a business-friendly state. Only 38 percent said businesses have too much tax burden here and a whopping 89 percent agreed on the business-friendly nature of the Silver State.
“First of all, we have no state taxes,” said Wagle. “That’s big for a company, to be able to be pro-business. Additionally, we’re still a pretty young economy. There’s still the ability to grow.”
“I would say, generally speaking, businesses pay enough taxes, there’s enough money in the system. The problem is how we appropriate the money,” said Brown.
However, many executives realize that the business-friendly nature of Nevada is only as good as the state’s tax structure and Nevada is only a few bad legislative decisions away from a reversal in that nature. It’s clear that for Nevada to stay competitive it must refrain from adding taxes that would hurt businesses or restrict growth. One tax many states have that Nevada doesn’t is a state income tax. Only 9 percent of respondents would support any kind of state income tax if it were proposed. “That’s one of our key advantages,” said Wagle.
“It’s the reason we came here,” added Poppinga of the lack of a state tax. “The sales tax that’s in place is good, that’s adequate to cover a lot of the revenue needs for the state.”
Those that do support the tax have a caveat, it must support causes that rank toward the bottom and the state would need to be accountable for how its spent. “If that tax is going to be going towards things like education or healthcare access [I would support it],” said Madison. “Both of those things are not well in the state.”
The People Problem
Nevada needs a diversified and trained workforce. Finding qualified workers is an issue that has hit nearly every industry. Nearly 60 percent of poll respondents said their staffing has increased in the last year and just over 50 percent expected it to continue increasing. In addition, 53 percent of respondents said finding qualified employees was their biggest workforce challenge.
“We’re continuing to add staff because we are still behind from our pre-2020 enrollment numbers,” said Brown. “The only way we can add more people to serve is to add more employees.”
“We currently have openings. We’re going to continue hiring,” said Wagle. “As we were busy, we were hiring. As it’s starting to slow down, there’s still a lot of work to be done. Even if we’re not bringing in more volume, there’s still the same amount of maintenance.”
“We’ve had a little bit of a decrease in staff due to finding skilled workers,” said Poppinga. “It doesn’t matter if you’re in the healthcare industry or manufacturing, we’re all looking for skilled employees. We’re having to automate our processes due to [a decrease in staffing].”
The state has indicated that workforce development has become a big issue moving forward, and it ties to diversification. Executives agreed with state leadership; 95 percent said it was a critical issue for Nevada.
“It’s hugely important, especially as it relates to diversification,” said Madison. “As a state, we rely more on gaming and we need to diversify. We saw during the pandemic, when we had to shut down the Strip, it really hit our hospitality workers hard. Anybody [who is] part of the entertainment industry had a hard time coming back from that. Further workforce development and additional skills training are hugely important.”
“It’s critical,” concurred Poppinga. “We don’t have the population that other states have. Our education has to be bolstered to adapt to our current needs. The workforce is in high demand because everyone’s looking for employees at the same time.”
When discussing workforce, and workforce training, it’s natural for the topic of unions to come up. Unions began as a way to protect some of the nation’s most vulnerable employees. As employee protection laws were added to the books, the necessity of unions began to be questioned. Many executives agree that unions have had their place but poll respondents felt that a union’s place just might be in the past. Over 60 percent indicated they disagreed that unions are necessary for Nevada’s workforce.
“We’ve always made it a point not to be a union,” said Poppinga. “A lot of times with unions, you pay higher wages for the lowest paid worker, it’s not always based on skill. For us, we need the skill up front and we pay very competitively in our field. I know unions work [and] have helped in different industries but, for us, it’s just never been a good fit.”
“I think unions are still important,” said Wagle. “But, not as much as they were in the beginning. In the beginning they really were there to be able to have equality in the workforce, allow people to take breaks and to provide training.”
The Lowest Scores
In most areas, Nevada hits it out of the ballpark. The state is business-friendly, has a wonderful and diverse climate and a myriad of activities and opportunities for those that live here. There are two flies in the ointment when it comes to Nevada’s reputation, however: healthcare and education. State leaders and stakeholders have been striving to improve both rankings and have, at times, found themselves spinning their wheels.
For healthcare, executives ranked it between a “C” and a “D” grade. Schwartz ranked the system at “C-“ and said it’s, “not quite failing, but barely passing.” Respondents indicated they were very concerned about cost, quality and access. Over 90 percent indicated concern with cost, 89 percent were concerned about quality and 81 percent were concerned about access.
“[The challenge with] healthcare in general is the cost, number one,” said Schwartz. “Number two is the quality of treatment.”
“We need more competition,” added Brown who gave Nevada’s healthcare system a “D-“. “We need better reimbursement rates; we need more doctors. The medical school is incredible but we need more of that.”
All executives seem to agree that a potential fix to healthcare is simply more – more providers, and more access. “We’re lacking doctors and nurses. They’re doing their best to build more hospitals,” said Poppinga who graded the system at “C”. “We don’t rank too well in the nation as far as overall healthcare and access.”
“We don’t have enough providers,” agreed Madison who gave healthcare in Nevada a “C-“. “I think Nevada is uniquely bad. I’m from here, born and raised. I feel like, more so recently, it seems harder and harder to get an appointment, to get quality care. The providers don’t spend enough time with you.”
Wagle graded the system at a “C+” or “B-“ and is hopeful the system is moving in the right direction. “We’re making strides,” she said. “We have a strain on that industry when it comes to skills and being able to keep [providers] in Nevada.”
Education is the other challenged industry in Nevada. Many executives believe the system is outright failing here. Not a single executive ranked education at an “A”, only 6 percent said it deserved a “B” and over 60 percent graded it at “D” or below.
“The private schools do a great job but if you’re trying to use the true public school system, I have not seen a good product out there,” said Wagle. “And it’s not for the teachers not trying. Most of the time, they’re just overwhelmed.”
When it comes to fixing education, executives ranked accountability as most important with 31 percent. “Accountability is the key to everything,” said Brown. If we’re accountable to the student and their education, then we’re focusing in on what it is that’s keeping them from learning.”
School choice was ranked as least important with 27 percent. “For me, school choice is not a big issue,” said Madison. “Definitely pay is an issue because we don’t pay our teachers enough.”
Poppinga agreed. “Just like any other industry, you get what you pay for,” he said. “Getting a quality teacher is going to require more pay.”
The State of Things
The new year brought Nevada some new politicians, including a new Governor, Joe Lombardo. Participants were asked to grade Nevada’s leadership based on how well they are, or will be, working for the state. Overall, executives are hopeful about Governor Lombardo, he was given a statewide average of “B-“ for how he’s expected to do.
“I met Governor Joe Lombardo recently and I like his stance on being pro-business and industry and his understanding of the state,” said Poppinga. “He has the most potential to do well. I know he’s new to the position so there’s a lot to be seen, but I have faith he can work within the government to maintain or better the state as it currently stands.”
“So far I’m optimistic about Lombardo,” Schwartz added. “It’s too soon to know whether he’s screwed anything up yet but I think he’s in the right frame of mind.”
Nevada’s other politicians didn’t fare quite as well and none of Nevada’s Federally elected officials garnered a statewide average higher than “C+”. President Biden lowered slightly from his 2022 grade to “D-“. However, Senators Cortez-Masto and Rosen both went up from last year’s average statewide grade of “F” and Representatives Titus and Amodei jumped up from the “D” grades they had previously received.
When it comes to voting for those in office, 86 percent of executives felt ID should be required to vote. Madison felt it should be required, “only for the purposes of making sure people are who they say they are. It doesn’t have to be a government issued ID but something that confirms their identity.”
Executives also felt that a combination of elected and appointed judges would be best and 88 percent of respondents wanted to see all elected officials have term limits.
Nevada executives seemed more focused on the issues facing the Silver State than they were on the politics. The availability of water jumped up to the most concerning issue for executives this year, going from 11 percent in 2022 to 30 percent in 2023. Healthcare and education closely followed in Nevadan’s list of concerns.
“Water is obviously very important because that’s about our growth,” said Brown. Madison added, “I worry so much about all of the new construction. Where are they getting the water?”
When it comes to national social issues, Nevada executives are most concerned about government overreach (35 percent) and least concerned about gun control (52 percent). However, homelessness was also high on the list of priorities for executives with over 50 percent saying it was “Concerning” or “Most Concerning”.
“Homelessness as a whole is probably most concerning, not just here, but everywhere,” said Wagle. “At the end of the day, it’s a nationwide issue, not just a Nevada issue. There are homeless everywhere.”
“The one that sticks out to me is homelessness,” Poppinga added. “It’s an increased situation that should be addressed. A lot of it is mental [health]. I know there are a lot of industries that would like to help.”
For all of the issues Nevada is facing, the Battle Born state is doing a lot right. This year’s poll revealed that executives and business owners are hopeful the changes implemented to solve Nevada’s problems will make this roller coaster economy a little easier ride for Nevadans.
“My hope continues,” said Brown. “[I hope] we continue to be one of the fastest growing economies and that we have so many new business starts. That’s part of the vibrancy and energy we have in Nevada.”
