Sunday, February 29, 2004
Copyright © Las Vegas Review-Journal
EDITORIAL: Don't bar the door
Study on growth controls confirms the costs
A study on growth commissioned by the Southern Nevada Water Authority released Thursday affirmed what we've been saying all along: Any attempt to impose Draconian, artificial limits on commercial and residential development in the Las Vegas Valley would have a devastating impact on every aspect of the local economy, not just the industries most directly affected, such as gaming and construction.
While the study won't put to rest calls by radical environmentalists and some short-sighted members of the community to raise the drawbridge and shut down the economic engines which make Las Vegas the most dynamic city in America, the findings should put the slow-growthers on the defensive.
The study investigated in detail a scenario in which drastic growth controls were placed on the local economy: an immediate, 65-percent reduction in residential construction followed by a 10-year period allowing growth to return to normal rates. Such limits would cost the local economy 1.3 million person-years of employment over a 14-year period, along with a 12.3 percent drop in local economic activity (translating into $148 billion in overall economic losses) and $15 billion in forgone tax revenues.
And that's just one model the analysts from Hobbs, Ong & Associates considered. Other scenarios could lead to similar results.
As the report noted, it's easier to limit growth than stimulate it. There's no guarantee that once policy-makers have artificially interrupted the flows of investment and trade, businesses and consumers will start them up again. It's quite possible the local economy might not rebound in an orderly fashion from a precipitous downturn, which would additionally stress cash-strapped residents and taxpayer-financed public services.
Not surprisingly, anti-growth types were quick to pounce on the study's conclusions. Daniel Patterson of the Center for Biological Diversity pooh-poohed the real-world impacts growth controls would have on the everyday lives of all Southern Nevadans, saying that the impact of additional development on water supplies and air quality outweigh the benefits that result from job creation, economic development and capital formation.
Tell that to an unemployed local resident who's desperately seeking work. Or a growing young family that hopes to move to a larger home at an affordable price. Shutting down economic growth always causes the most damage to those who aren't already well-to-do.
Besides, local policy-makers are responding to many of the concerns environmentalists have raised. The water authority is accelerating plans to obtain new water resources from the Virgin and Muddy Rivers and from heretofore untapped groundwater supplies in Clark, Lincoln and White Pine counties. Conservation has its role, but so does the development of additional water supplies.
The study did not conclude that every type of growth is positive. As we've stated consistently, there's an important role for effective, predictable, transparent planning and zoning policies that protect the rights of property owners and preserve local communities.
So while the report concentrated on the impacts limiting growth imposes on the private economy, by design it left discussions about appropriate fiscal and regulatory policies for another day. That's understandable, but unfortunate.
Where growth controls must be imposed is on the local bureaucracy, which is expanding like kudzu, far in excess of the healthy pace tax revenues are flowing into government coffers. And we don't need to commission a study to arrive at that conclusion.