State’s historical structure holding back Southern Nevada
Editor’s note: As he traditionally does around this time every year, Brian Greenspun is turning over his W here I Stand column to others. Today’s guest is David F. Damore, professor and chair of the department of political science at UNLV and interim executive director of the Lincy Institute and Brookings Mountain West.
Post COVID-19, Southern Nevada’s attention must turn to balancing growth and economic diversification while mitigating the effects of climate change and a decreasing water supply.
To move these discussions forward, last spring the Lincy Institute and Brookings Mountain West, two public policy centers at UNLV that I direct, released “Nevada Economic Development and Public Policy 2022-2022: A Sustainable Future for All Nevadans.” Instituting the report’s recommendations will require a regional-based approach that embraces four key principles.
1. Leverage your 2.3 million person metro, don’t loot it
The pandemic once again demonstrated that economic activity elsewhere in Nevada is insufficient in scale to offset downturns in a region that comprises three-quarters of the state’s population and generates the vast majority of the state’s general fund revenue.
The lack of investment needed to diversify Southern Nevada’s economy is no accident. For decades tax revenue from the South has been redirected to pay for infrastructure and government services elsewhere while economic development in the North has been prioritized. Consider between 2012 and 2020, 77 percent of tax abatements granted to incentivize business investment were in Northern Nevada.
Meanwhile, Southern Nevada must rely on private resources to compensate for the state’s under investment. Take for instance the education building for the Kirk Kerkorian School of Medicine at UNLV. The state invested $25 million while local philanthropists contributed an astonishing $125 million! The project’s planning and construction was overseen not by NSHE but by a nongovernmental organization, the Nevada Health and Bioscience Corporation, that delivered the project on time and under budget.
The recent approval of federal dollars
to support the state’s health care infrastructure offers more of the same. UNR received $75 million for an expansion of its health lab. Southern Nevada was appropriated $30 million for a health lab and $40 million for an ambulatory care facility at the Kirk Kerkorian School of Medicine.
Nevada’s longstanding “one for the North, one for the South” resource distribution mentality does little to remedy Southern Nevada’s glaring deficits in industrial infrastructure and wet and dry lab space. The failure to leverage Southern Nevada’s size through scaled investments delays economic development in the region and, by extension, Nevada’s ability to buffer its economy from future shocks.
2. Organize regionally
The creation of the Southern Nevada Forum a decade ago has helped to develop regional policy consciousness across party lines and levels of government. The fragile coalition of that delivered the Build Back Better Regional Challenge application is a welcome sign that Southern Nevada is learning how to collaborate at the regional level.
Still, compared to Mountain West metro competitors like Denver and Phoenix, Southern Nevada lacks governance structures to facilitate regional-based decision making. Building this capacity takes on increased importance in light of federal opportunities that are available at the regional level and the need to coordinate policies related to infrastructure, growth, climate mitigation, and natural resources.
3. Strengthen local governments by increasing home rule
The two pillars of Nevada governance — limited at the state level and constrained at the local level — create a mismatch between government capacity and Southern Nevada’s size and complexity.
State government is small, concentrated hundreds of miles away and poorly aligned to meet the needs of a large, dynamic metropolitan region. Local governments have dedicated, professional staffs and are locally accountable but have limited charges.
Where locality matters in the delivery of government services such as community college governance, the administration of cooperative extension and workforce development authority should be in the hands of Southern Nevada representatives and institutions
Why should Nevada’s economic and population engine have to wait two years for the Legislature to be in session to have its policies priorities addressed and then passed down from Carson City?
4. Capture geographically concentrated taxes to support local initiatives
Nevada, perhaps more so than any other state, relies on geographically-based taxes to fund state government. Taxation of mining revenue in the rural counties and taxes imposed on cannabis, live entertainment and gaming that are centered in Southern Nevada illustrate this point. The distribution of these taxes is a different matter. Revenue from the net proceeds on minerals tax is split between the state and counties where the minerals are mined. Tax collections that are highly concentrated in Southern Nevada are centralized at the state level and distributed through the state budget.
Southern Nevada should apply the model used to fund the public contributions for Allegiant Stadium and the expansion of the convention center by capturing shares of locally generated taxes to support the workforce, public safety and infrastructure that drive Southern Nevada’s economy.
The challenges facing Southern Nevada are incompatible with the state’s antiquated governance structures that have short-changed regional investments and constrain the region’s local governments and institutions. Bold, regionally-based policy and governance interventions, paired with strategic investment of federal resources, are the path to ensuring Southern Nevada’s sustainability and resilience.