Amid Tough Times, Nevada's Economy Reels

Copyright © 2009 National Public Radio®. For personal, noncommercial use only. See Terms of Use. For other uses, prior permission required.

MELISSA BLOCK, host:

Around the country, state governments are feeling the pain of the economic slide, the housing crisis, the credit crunch. Nevada has the dubious distinction of being judged the state hardest hit by the downturn. Its economic declines since January '07 is the worst in the nation, according to a new report from the policy research organization at the Rockefeller Institute. So we've called Nevada State Treasurer, Kate Marshall to get a sense of what that means for the state and for her as treasurer. Thanks for being with us.

Ms. KATE MARSHALL (Treasurer, Nevada State): Hi. Thank you for calling me.

BLOCK: And what are the forces, Kate, that are hitting Nevada's economy so hard?

Ms. MARSHALL: Well, there's really three things that are contributing to the economic slow down like one, is the housing situation. We were up really, really high and the higher up you are the greater you fall. So we've been hit very hard by that.

BLOCK: I think you're the highest foreclosure rate in the countries, is that right?

Mr. MARSHALL: We do. We increased so much. We have such a bubble compared to the rest of the country. So the housing situation is hitting us. Related to that is the credit markets, much of our development is driven by debts. We have a lot of projects online and that's a plus and minus. It's a minus because that means today we slow down, maybe there's not as many jobs, maybe we're taking kind of step back. But it also means that things are in place so that when the economy eases up we can launch forward. And then the third thing is the consumers, budgets are strained, gaming as discretionary, play time.

BLOCK: And you depend a lot on gaining revenues?

Mr. MARSHALL: Yeah, that's a large but perhaps a little over third of our revenues to the state. And so, high gas prices, are you going to drive over from California, you're going to drive over from Arizona, maybe you're going to rethink that.

BLOCK: Well, what is all that - with all of these factors coming in to play here - what does that mean for the state budget?

Mr. MARSHALL: Believe it or not, early in the summer, we did an economic forum we had a special legislative session and we went in and cut and slashed and took a very hard line. And so we are currently meeting our new projections.

BLOCK: How much did they have to cut?

Mr. MARSHALL: Eight percent may be, seven and a half percent? And for this next legislative session that starts in January, they're asking us to cut 14 percent. I submitted my budget, I cut 14 percent. I'm down - I'll tell you we're at bone now. We're at bone on that.

BLOCK: So if things get worst, which a lot of people are predicting that they will, what do you do?

Mr. MARSHALL: Hmm. Less steak more beans. I mean, what can I tell you, you know. You have to work through it. Not fun. Nevada is kind of state where in good times we can handle it flush, in bad times we're going to advertise more and get more creative. In some ways, we have the flexibility to do that but in other ways having that flexibility means you also have to have a flexibility to tighten your belts a little more than most maybe.

BLOCK: What's the thing that keeps you up at night as state treasure? What's the thing that you worry about? Maybe if it's not now, may be six months from now, or eight months for now.

Mr. MARSHAL: The stress on my employees, I worry about them. You know, they're working very, very hard. They are working very long hours. My investment employees get in at four o'clock in the morning, sometimes earlier to try and buy before the markets opened. I worry about they're stress a lot. I don't so much worry about the government's budget or whether we're going to be able to make ends meet because it's kind of the way I approach things is you do what you need to do. It's not a question of whether or you can, the fact is your will. And so I think that we'll simply go forward in that regard but it puts a lot of pressure on my employees when they're out there. This morning for example, talking to my investment officer, she's getting one percent. Last quarter, we were getting three percent on average which means, sometimes five percent. So that's a lot less revenue but for me, what's important right now is safety.

BLOCK: Kate Marshall is the state treasurer for Nevada. She's speaking with us from the capital, Carson City. Thanks very much.

Ms. MARSHALL: Thanks Melissa.

Copyright ©2009 National Public Radio®. All rights reserved. No quotes from the materials contained herein may be used in any media without attribution to National Public Radio. This transcript is provided for personal, noncommercial use only, pursuant to our Terms of Use. Any other use requires NPR's prior permission. Visit our permissions page for further information.

NPR transcripts are created on a rush deadline by a contractor for NPR, and accuracy and availability may vary. This text may not be in its final form and may be updated or revised in the future. Please be aware that the authoritative record of NPR's programming is the audio.