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 second quarter of 2008. 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
Tax collections for local governments have been negatively influenced by
declining taxable sales and gaming revenues, in addition to slowdowns in vehicle
registrations, real property transfers, and falling hotel occupancies and
average daily room rates. State and local budget cuts have been implemented
and reserves have been materially reduced. Many of these cuts, however, utilized
one-time funding sources, threatening the state’s ability to maintain essential
service levels into the next fiscal years when those one-time monies must be
replaced with recurring revenue sources. According to the latest statistics
released by the Nevada Department of Taxation, taxable retail sales activity
totaled $9.0 billion during the trailing three-months ending July 2008. This
translated into a 2.2-percent decrease in taxable retail sales for Clark County
when compared to the same three-month period in the previous year. The largest
retail sales category, food service and drinking places, posted a decrease of
6.3 percent when compared to the same timeframe in the previous year, although
collections were impacted by the Nevada Supreme Court’s ruling that the "use"
portion of the tax is no longer required on “comped” food and beverage. Motor
vehicle sales, the second-largest contributor to aggregate retail sales volumes,
also reported a 7.9-percent decrease. This is the second lowest reported sales
value for this category within the last three years.
Commercial construction, buoyed by significant investments in the hotel-casino
sector, continued to bolster taxable sales collections during the quarter.
Construction of buildings and specialty trade contractor categories in
particular, posted quarterly gains of 45.8 percent and 37.5 percent,
respectively, from the same 3-month period previous year.
Inflation-adjusted per-capita spending in Clark County declined by 6.4 percent
when compared to the same three months of the prior year (ending July 2007).
With current expectations likely to influence the future longer-run sales, we
expect per-capita spending growth to remain soft as the housing market continues
its current trend and impact on resident spending. In addition, we anticipate
expansions in the employment sector to be softer than in previous years, also
affecting spending.
Clark County’s consolidated tax distributions for the three-month period ending
July 2008 (most recent data available) amounted to $225.5 million, representing
a 6.8-percent decrease when compared to the same period in 2007. Annual
comparisons for Clark County liquor tax revenues were up 0.1 percent when
compared to the same period of the previous year, while cigarette tax collected
in Clark County reported a 4.7-percent decrease during the same three-month
period.
Motor Vehicle Privilege taxes, which stem from vehicle registration payments,
were down 3.9-percent year-over-year. During the past 12-months a total of
$106.1 million was collected, representing a 0.7-percent decrease when compared
to the $106.7 million collected in the same 12-months of the previous year.
Continued declines are expected as less sales activity make vehicle depreciation
the stronger force. Real property transfer tax revenues amounted to $7.1 million
at the end of second quarter 2008 (latest data available). This represents a
significant increase from the previous quarter (18.1 percent); however,
substantially less than the collections during the same quarter of the prior
year (-27.1 percent).
From a gaming perspective, gross gaming revenues for Clark County fell 7.7
percent year-over-year for the trailing 3-months ending August 2008. The Las
Vegas Strip, which accounted for 63.1 percent of Clark County gaming revenues
during the past twelve months, reported annual declines of 8.8 percent.
It remains clear that consumer spending has significantly cut back when compared
to previous quarters. Residents have experienced a decline in their perceived
value within their investment portfolios, retirement plans, as well as any real
estate properties owned. With that said, consumers are hesitating to spend, and
will therefore directly affect the overall fiscal collections and monies
collected by the local government. |
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CURRENT QUARTER
INDICATOR BRIEF: |
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FISCAL
HIGHLIGHTS: |
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1. |
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Taxable sales for the three months ending July 2008 were $9 billion, down 2.9
percent over the same period in 2007 |
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2. |
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The largest taxable category, food beverage and drinking places posted a
6.3-percent decrease |
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3. |
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Clark County consolidated tax distributions were down 6.8 percent for the three
months ending July 2008 |
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4. |
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Gross gaming revenues were down 7.7 percent for the trailing 3-month total
ending August 2008 |
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PREVIOUS QUARTER |
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