Closure of Sahara casino another blow to economy

High school students marched in the streets, chanting sing-song “Save our teachers,” waving picket signs and crying during a School Board meeting. They protest that a couple of hundred teachers will have to reapply to keep their jobs.

In the halls of the Legislature and meetings of local public agencies, irate public employees predict doom, gloom and apocalypse now at the potential prospect of a modest pay cut, or that a couple of dozen college professors or social workers or clerks might lose their jobs. Taxes must be raised to continue the status quo, they insist emotionally and volubly.

All that hand-wringing was put into perspective Friday.

The owners of the 60-year-old Sahara hotel announced it will close in two months, throwing 1,050 taxpaying employees out of work. SBE Entertainment of Los Angeles said it is “no longer economically viable” to keep operating the 1,720-room Moroccan-themed hotel-casino.

Analysts were unsurprised by the move given high unemployment, rising inflation and reduced discretionary spending. Companies hemorrhaging cash bleed to death.

The news came on the morning the banner headline in this newspaper was about the unemployment rate falling — not because more people found jobs, but because thousands either left the state or stopped looking for work.

Fewer workers in the state’s employee base means fewer workers to help cover the cost of public services.

Another story that day revealed a much-hoped-for turnaround in the volume of visitor gambling did not happen in January. Gaming revenues fell 1 percent statewide and 2.5 percent on the Strip, despite a busy New Year’s holiday and several large conventions that boosted visitor volume 8.6 percent. They kept their money in their pockets.

This was just icing on the fourth-quarter numbers from the major casino companies. MGM Resorts had a net loss of $139 million. Caesars Entertainment’s loss was $197 million. Boyd Gaming’s was $7 million.

The solution to what ails the Nevada economy is certainly not to rob more from poor, private-sector Peter to pay public employee Paul, but to somehow breathe life into the private sector by cutting confiscatory taxes and fees and blowing up regulatory burdens so companies can actually earn profits that can be turned into jobs and growth.

Both the private and public sectors will be better off when the economy improves and companies and their workers can afford to start paying taxes instead of closing their doors and walking away.