SPARKS, Nev. — Like a gambler at an all-you-can-eat casino buffet, Nevada has feasted on California's problems for years.
Whenever California raised taxes, layered on more red tape or became paralyzed by a budget crisis, Nevada gleefully lured away businesses and wealthy individuals. Compared to its troubled neighbor, Nevada offered stability, low taxes and dazzling opportunities.
But now it's Nevada that's suffering the worst of the slump. The state with the ultra-friendly business climate has surpassed Michigan for the nation's highest unemployment rate: 14 percent. Its foreclosure rate is also the nation's highest.
What's more, Nevada's budget deficit is actually worse than California's, in percentage terms. Legislative leaders are talking about — gasp — imposing a state income tax.
The latest job numbers have sent politicians and policymakers into a frenzy of soul-searching and finger-pointing. Nevada's citizens are simply bewildered.
"When I first moved here, there were lots of jobs — I never had trouble finding a job," said Chris Munoz, an unemployed warehouse worker who's lived in Sparks for 10 years.
"Every now and then you get an interview," said Munoz, 50, who's been out of work for a year. "But there are so many people looking, they fill up fast."
The downturn has exposed deep flaws in Nevada's economy, including a serious overdependence on gambling and construction. Analysts in both states say California, for all its ills, has a more diversified economy that is better suited to participate in the recovery.
"Our two major industries went kaput," said Brian Bonnenfant of the Center for Regional Studies at the University of Nevada, Reno. "Those two industries are not going to recover at the same rate as the national recovery."
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