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Higher Nevada Property Taxes Likely, Economist Forecasts

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Associated Press

Nevadans can look forward to increasing economic opportunities in 2017, but property taxes and interest rates might be on the rise as well.

So say economist John Restrepo of RCG Economics and Mike PeQueen, a money manager at Hightower Las Vegas. The pair read data and tea leaves and for their clients as well as for their Stat Pack website.

The two, who are featured speakers at the Jan. 24 Preview Las Vegas forum put on by the Metro Chamber of Commerce, are mostly bullish on this year’s economic prospects locally and nationally.

PeQueen said potential tax cuts being discussed in Washington might mean more visitors — and their cash — find their way to Las Vegas.

“We, Las Vegas, are the ultimate consumer discretionary destination,” he said. “People  have to feel richer to come here.”

Restrepo said he doesn’t expect the Legislature to cultivate any major new revenue sources following boosts of business and room taxes in recent years.

“There is going to be some hesitation in voting on any more large tax increases,” Restrepo.

Still, he said, lawmakers  might slightly raise property taxes by changing how automatic increases pegged to inflation are calculated.

Support comes from

“They’re going to set a floor on the increases,” he said, noting lawmakers face revenues that are failing to keep up with a growing population and demand for government services.

Interest rates, which affect the health of Nevada’s vital construction industry, are likely to continue trending upward, PeQueen said.

“We did see the clear signs that interest rates are rising,” he said. “We think that in 2017 we could see the 30-year mortgage rate touch 5 percent.”

While moderate by historical standards, PeQueen said those who came of age in the recent ultra-low-rate environment could possibly be less likely to buy homes.

Overall, both PeQueen and Restrepo are positive about Southern Nevada's economic prospects in 2017.

“I think the trajectory is still very good,” PeQueen said, “We have great trends in place. We have momentum. We have growth in jobs. We have construction underway. So I’m very optimistic that we’ll see decent growth in 2017.”

Restrepo said all the indicators are showing the kind of growth that he likes to see: steady.

“What I like is that growth rates are moderate," he said, "We like moderate growth rates. We don’t like them declining and we don’t like them increasing too much because neither one of those situations are good or sustainable.” 

Hightower Las Vegas supports Nevada Public Radio, which is a sponsor of Preview Las Vegas.

Guests

John Restrepo, principal at RCG Economics; Mike PeQueen, money manager at Hightower Las Vegas

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