Economy still slow

The final state tax collection numbers are in for 2007-08 and, as expected, the fiscal year closed with a whimper.

Sales tax revenue from June fell 6 percent when compared with the same month a year ago, the worst dip of Nevada's 15-month economic downturn. Among the biggest hits to business: a 16.1 percent drop in motor vehicle sales and a 23.8 percent decline in home furnishing sales.

Those numbers, largely attributable to this summer's spike in gasoline prices, left the state with $2.71 billion in total general fund revenue for the first year of the biennial budget, a 4.1 percent drop from the year before. That's unprecedented during Nevada's remarkable three-decade building and population boom, during which tax collections typically increased by about 10 percent per year.

Unfortunately, there is still little to suggest the stumbling Nevada economy is turning the corner. Yes, home sales have shown modest month-to-month growth this summer, which is great news considering the fiscal upheaval that has resulted from a 30 percent drop in home values over the past two years. But visitor counts, McCarran International Airport traffic and convention attendance are down despite big room discounts on the Strip. The normally lucrative Labor Day weekend likely won't fill hotels despite room rates as much as 50 percent lower than for last year's holiday.

Worse, major airlines this month announced plans to eliminate scores of flights across the country to help offset high fuel costs. Even reliably profitable Southwest Airlines, the biggest carrier in Las Vegas, plans to cut nearly 200 flights, including 13 that go through McCarran.

That means that even with full flights to Southern Nevada, airlines simply won't be able to deliver enough visitors to fill Clark County's hotel rooms on a consistent basis. The city will have to hope gasoline prices continue to fall and thereby encourage more regional travelers to make the drive to Las Vegas.

"The cost of higher fuel prices will, in the end, probably come out of the pockets of Vegas casinos," Robert Ashcroft, vice president of planning for Las Vegas-based Allegiant Air, told the Review-Journal's Benjamin Spillman.

Amid all these discouraging developments, Nevada Democrats continue to agitate for higher taxes to feed the public sector, seeking to restore budget cuts that few taxpayers have noticed. At this point, shouldn't lawmakers be talking about what they can do to stimulate the economy and speed its recovery, rather than delivering a coup de grace?