Nevada Treasurer Says Drones Show Varied Economy: Five Questions

Nevada’s selection as a drone test site shows it has a diverse economy and deserves a higher credit rating, said Treasurer Kate Marshall.

The Silver State has the third-highest rank of Aa2 from Moody’s Investors Service and AA from Standard & Poor’s. The grades should be a step higher, said Marshall, who once taught schoolchildren in Kenya. She cited the Federal Aviation Administration’s approval of the state as one of six testing areas for unmanned aircraft in December, which she said would create 10,000 jobs.

Meanwhile, S&P said last week that Nevada faces “volatile economic performance” and has recovered only 53 percent of the jobs lost during the recession.

Marshall, a 54-year-old Democrat in her last year as treasurer, is running for secretary of state in November.

The following is condensed from a recent phone interview:

Q: North Las Vegas has forecast a $24 million budget shortfall this year and is working to avoid a state takeover. Should Nevada allow its municipalities to file for bankruptcy?

A: In this state, not only can a municipality not declare bankruptcy, but bondholders get paid first. I don’t believe we should change those laws. States and municipalities can work out their finances such that they can pay their bills.

Q: Some gambling analysts say that the industry is facing saturation across the U.S. How would that affect Nevada?

A: I don’t think it affects Nevada. Las Vegas is a destination in and of itself. It is a different experience than any other gaming destination in the country. If anything, the other gaming activities in the country are simply creating a greater draw for a person to have a unique kind of experience that they can have in Vegas.

Q: What’s the greatest challenge to the state’s economy?

A: We have to be diligent about the same things every other state has to be diligent about. What we’ve been doing to support our education systems, support our infrastructure systems, make sure our airports are running well, continue to get these unique opportunities like we did with the drone test sites -- those things we need to continue doing. If we suddenly stop doing all that, obviously, I would have some concerns.

Q: The American Enterprise Institute said that in Nevada, an average full-career state worker can expect to receive $1.3 million in lifetime pension benefits. Are benefits too generous?

A: They probably don’t understand that the state is one of 190 employers [in the plan]. Nevada has a different type pension plan than a lot of other states have. State workers in Nevada actually pay half of their pension. And they don’t just pay half of the benefit owed to them, they also pay half of the actuarial liability. A lot of states don’t have that. Out of every employee’s paycheck every month, 12 and three-quarters percent of their paycheck goes to their pension plan.

Q: You spent two years in the Peace Corps in Kenya teaching English. Was there any phrase that you learned from the locals that stays with you today?

A: In Kenya, they say “we go slowly by slowly.” You put one foot in front of the other. I tend to approach things in a one-step-at-a-time way. You might take a huge issue, and I’ll just break it down into its varied parts and address the one in front of me and then address the one thereafter. That way you find that you can actually achieve things. You can take something that might seem huge, and make it manageable and something that you can actually work to resolve.

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To contact the reporter on this story: Romy Varghese in Philadelphia at rvarghese8@bloomberg.net

To contact the editors responsible for this story: Stephen Merelman at smerelman@bloomberg.net Mark Schoifet, Mark Tannenbaum

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