State leaders say Nevada needs to diversify from reliance on gambling, and they are aiming at making the state an energy Mecca with facilities like the Ormat geothermal plant. But the state may have waited too long to get serious. Advertisement



Few living Nevadans remember a time when the state was not growing in population. But now they may all be experiencing it.

State Demographer Jeff Hardcastle on Dec. 30 reported his latest population estimates, which indicate the state has begun to lose population.

In what may be an indication of how ingrained is the notion of Nevada as ever-growing, his news release was emailed with the incorrect subhead of “Nevada is still growing, but at a reduced rate.” A correction was sent out later in the day.

Hardcastle’s statement said his figures showed that, “Overall, Nevada lost an estimated 27,677 persons or 1 percent since July 2008. That compares with a 20,396 or 0.8 percent gain from July 2007 to July 2008 and a 95,287 or 3.6 increase percent from July 2006 to July 2007.”

A few days earlier, U.S. Census Bureau estimates showed Nevada still growing. But their figures were scarcely more encouraging, showing only a 1 percent increase in population, dependent entirely on residential births outpacing deaths. In terms of migration, the Bureau showed more people leaving the state than moving in.

Is this necessarily bad news, or are there benefits that can be gained from declining population?

Two former governors say it is bad news, while offering a caveat.

“I don’t think there are benefits that can be gained, but I do think that the rate of growth we experienced before was not particularly helpful,” said former governor and U.S. senator Richard Bryan, who became governor at the tail end of a crippling recession and set up a program to diversify the state’s economy.

“This lull may give us some breathing room after that extraordinarily high rate of growth we had,” he said. “But we need to have some moderate growth.”

Former governor Kenny Guinn agrees, sometimes in the same kind of language.

“I think we need growth, though the kind of growth we have had recently has been difficult to cope with,” he said.

Bob Fulkerson, director of the Progressive Leadership Alliance of Nevada, disagrees. He said government should focus not on encouraging growth but on serving a stable population with sustainable use of the available resources, particularly water. Indeed, he said, the lack of prosperity now was produced in part by assuming that growth was the key to prosperity, an assumption that does not work when premises like cheap gasoline and a monopoly on gambling change.

“First, workers and their families have endured extreme hardship as a result of the downturn,” he said. “That downturn was the inevitable result of terrible public policy on the state and local level that depended on seemingly endless growth; cheaply built but expensively sold houses in ugly suburbs sprawling into the desert, where you had construction workers building homes for construction workers; and cheap oil to bring us the tourists to sustain our only real industry, especially in Southern Nevada.”

One of the benefits of this decline in population growth, Fulkerson said, is a chance to approach progress in a different way, not by a dependence on growth but on creating a positive quality of life for those already living in Nevada.

“Ed Abbey said ‘growth for its own sake is the pathology of a cancer cell.’ Now that the cancerous growth of urban sprawl has been slowed, we should talk alternatives to the current way of making money that depends largely on desecrating our wild and open spaces with housing tracts. Why do we insist on the growth-is-good paradigm? Who chiseled that into stone? … We can retool our thinking, and then our communities, to be based on sustainable and renewable business practices.”

Nevada Taxpayers Association director Carole Vilardo said one benefit of the population decline is that there is less demand for public services. But she also noted that the population decline happens to be taking place during a recession, when that demand rises, so the state lost whatever benefit it might have gained. She said the state’s school system may benefit from being able to catch up with school construction.

She said the state’s economy and tax system are not particularly well structured if the population loss becomes an extended problem and the recession continues. (A recent Moody’s study of a dozen states showed Nevada the only one not showing signs of recovery.)

“In a downturn, you don’t usually see all segments of the economy fall at the same rate, so a diversified economy gives you some protection from recession,” Vilardo said. The state has been trying to diversify the economy with limited success since Bryan was governor.

Bryan agreed with Vilardo and, when asked if the drop in population would force changes in the tax structure and other policies, he said, “I hope so. I hope so. That would be a benefit.”

Many authorities on the state’s economy see the downturn in population as recession-related. Bryan is one of them. But some have been saying otherwise, that the rise of tribal gambling and other factors, such as the rise in gas prices, made changes in Nevada’s fundamental ways of doing business almost certain, and when the state failed to make adaptations, population loss resulted.

One of those is former state archives administrator Guy Louis Rocha, who said the state’s problems are more deep seated than most community and commercial leaders have been willing to admit, and that they have been less than daring in dealing with it.

Vilardo said the state is taking a look at some ways to build a new economy. Nevada has for many years been overwhelmingly dependent on tourism and construction.

“It’s almost impossible to ship things across country without crossing Nevada,” she said. She noted that a state legislative committee is conducting a study to try to find ways related to warehousing and other commercial factors through which the state could take advantage of that location. Democratic candidate for governor Rory Reid wants to beef up Nevada’s warehousing laws: “Nevada could become one of the leading trans-shipment centers of North America with smart planning and implementation.”

But Rocha says the state is already well down that road. In 1949, he said, the legislature provided “for a freeport tax exemption, whereby all inventories held for resale within or outside the borders of the state were tax-exempt, spark[ing] a warehousing boom.”

Vilardo further points out that efforts are underway to link up power grids around Nevada that will help foster energy research and development in the state.

The Nevada Legislature last year took some halting steps to encourage an energy industry, but critics have called those steps half-hearted and say they lag behind other sun drenched Western states. Some say the current two-year period is critical and the fact that the Nevada Legislature did not take bolder steps puts the state far behind. Lawmakers say they could not do more—particularly in enhancing the kind of educational facilities energy research needs—because Gov. Jim Gibbons’ veto would have stopped the expenditures needed and the taxes required. “It was penny wise,” said one legislator. “Gibbons keeps thinking there’s a free lunch.”

Rocha said other Western states have leaped ahead of Nevada in laws encouraging investment and the substantial research facilities to attract it. “If I wanted to put a company somewhere, I’d look at the Wasatch Front,” he said, referring to the chain of urban areas—Salt Lake City, Provo, Ogden and others—in the Wasatch Range in Utah that contain 80 percent of that state’s population and a half dozen universities, including Brigham Young University and the University of Utah.