The Indicator Brief is a publication of the Clark County Monitoring
Program. The Monitoring Program was developed to provide a foundation
for on-going policy discussions and a baseline from which economic, fiscal
or social changes could be monitored over time.
As a briefing document, the Indicator Brief is not intended to be
comprehensive. Rather, this summary is intended to highlight the salient
findings of the research conducted during the fourth quarter of 2010. It is
subdivided into the program's five core study areas:
economic,
fiscal,
public health and safety,
environmental and
demographic. |
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Summary Overview: Fiscal
Since the Great Recession commenced in December 2007, local governments in Nevada have faced sharp revenue shortfalls in attempting to meet continued demand for services.
With a revenue distribution formula driven mostly by population and property value growth, consolidated tax distributions to counties (or C-Tax) - which include sales tax distributions, cigarette taxes, liquor taxes, motor vehicle registrations and real property transfer taxes - have been severely impacted by falling property values and out migrating residents.
During the past three quarters, however, taxable retail sales activity has shown signs of improvement. Clark County taxable sales totaled $7.3 billion during the final quarter of 2010; rising 2.1 percent when compared to the same three-month period last year, or an increase of $152.3 million. Perhaps the most significant increases countywide occurred in the two core tourism and service categories: the accommodations sector, at $486.0 million, reported an uptick of 14.9 percent in the fourth quarter compared to the same quarter prior year, while the largest single sector in the county, food services and drinking places, came in at $1.3 billion (+8.9 percent). Other sectors to report year-over-year increases include clothing and clothing accessory stores (+9.8 percent) and electronics and appliance stores (+13.6 percent).
As a result, Clark County collected an additional $8.8 million in the form of Basic City-County Relief Tax (BCCRT) and Supplemental City-County Relief Tax (SCCRT) distributions during the final quarter of 2010. Other C-Tax categories that made up the 14.1 percent remainder share of distributions reported declines year-over-year. Clark County cigarette taxes were down 2.5 percent as 768,300 fewer cigarette packages were sold at the state level during Q4 2010. Liquor taxes in Clark County were down 4.0 percent despite a 1.7-percent increase in the gallons of liquor sold statewide. Government services taxes, which are derived from vehicle registration payments, totaled $19.9 million; down 7.2-percent year-over-year.
Real property transfer tax revenues for Clark County amounted to $4.2 million during the fourth quarter, representing a 4.3-percent increase from the previous quarter; however, a 12.6-percent decrease from collections during the same quarter of the prior year. Worth noting is that demand for new residential construction remains low; in 2010, new units comprised only 9.6 percent of closed sales, a far cry from 2005, when new units represented 41.4 percent of sales.
A number of year-end 2010 figures show no material recovery from 2009 lows. Baring taxable retail sales, we anticipate continued weakness in C-tax distributions as southern Nevada is faced with an estimated 66 percent share of “underwater” housing mortgages and commercial real estate - office, retail, and industrial - vacancy rates remaining at all-time highs reported at 24.2 percent, 10.2 percent, and 16.9 percent, respectively.
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CURRENT QUARTER
INDICATOR BRIEF: |
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