Economic recovery brings in more taxpayers’ money than expected | Nevada News

By SAM METZ, AP / Report for America

CARSON CITY, Nevada (AP) – Nevada’s economy is recovering faster during the pandemic than in some past recessions, but variants of coronavirus continue to raise questions about the state’s path to full recovery.

The five-person panel responsible for economic forecasting on Tuesday reviewed how the pandemic, federal funding, and changes approved by state lawmakers earlier this year will affect their previous projections.

Although hotels and casinos continue to struggle, Nevada has received 34% more tax revenue than forecast last year. The state has collected $ 385 million in sales and use taxes and $ 38 million in live entertainment taxes as of June. Economists initially planned to raise $ 294 million and $ 5 million, respectively. The sources of income are of special importance in Nevada, which does not impose state income taxes on residents.

The state’s economy is heavily reliant on tourism and personal entertainment, and casinos and hotels employ 66,200 fewer workers than before the pandemic. However, the number of residents employed in industries such as warehousing has exceeded pre-pandemic levels, and restaurants and bars employ almost as many people as they did before the pandemic. The unemployment rate in Nevada fell nearly 5 percentage points from October 2020 to October 2021, but it remained the highest in the country at 7.3%.

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“We have been in a slower growth phase for six to nine months. The current recession has been incredibly concentrated in the Las Vegas area and in the casino hospitality industry in particular, ”said David Schmidt, economist in the Department of Employment, Training & Rehabilitation.

The recovery has been uneven, disproportionately affecting minorities, people without high school diplomas and women with young children, economists said.

The state will probably be able to spend more in the next two fiscal years due to the federal aid fund and an increase in the mining tax decided in May.

The Nevada Supreme Court ruling that a payroll tax extension was unconstitutional because it wasn’t two-thirds approved in the statehouse will cost the state an estimated $ 197 million over three fiscal years, economists said. The reimbursement and reduced tax rate are partially offset by the increase in mining tax. Russell Guindon, a fiscal analyst in the Legislature, said Nevada expects to generate more than $ 80 million in mining revenue in each of the next two fiscal years.

The state expects to receive $ 6.7 billion in federal coronavirus aid, most of which will be earmarked for specific services like health care, education, or housing. However, the funds will enable the state to better cope with losses in wage tax revenues and replenish budget reserves spent by the pandemic.

“Money is money,” said Craig Billings, a casino manager who is a member of the five-member Economic Forum.

“If you can use it for government services, don’t use any other revenue stream for government services.”

Metz is a corps member of the Associated Press / Report for America Statehouse News Initiative. Report for America is a not-for-profit national utility that places journalists on local newsrooms to cover undercover issues.

Copyright 2021 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

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