Reelected Nevada Treasurer Zach Conine ready to get back to work

After narrowlydefeating Republican Las Vegas City Councilwoman Michele Fiore to win a second term as Nevada state treasurer, Zach Conine will resume efforts to establish an infrastructure bank to aid the state in securing federal matching funds for projects, as well as a bevy of other priorities.

Conine, a Democrat, secured a second term in a state that saw the governor’s office shift back from blue to red when Republican Clark County Sheriff Joe Lombardo defeated incumbent Gov. Steve Sisolak, a Democrat.

Conine collected 47.7% of the vote to 46% for Fiore, according to the official results.

The incumbent treasurer received endorsements from some Republicans in the state as he edged out Trump-supported Fiore.

Fiore, who originally announced plans to run for governor, was facing legal battles that helped Conine return for a second term, he said.

“I think Nevadans by and large understand the job of treasurer is less about politics and more about competence,” Conine said. “With a fair amount of time and effort, I was able to show I was the candidate that had that competence. Whether it’s the bond ratings, dollars-out-the-door during the pandemic, or investment returns, we have hit the cover off the ball.”

Under Conine, Nevada has received and maintained its highest credit rating in history. Nevada is rated AA-plus by S&P Global Ratings after a 2019 upgrade, AA-plus by Fitch Ratings, and Moody’s Investors Service assigns an Aa1 issuer rating after a 2019 upgrade.

Fiore attempted to hammer Conine for his move to divest from automatic weapons and gun manufacturers in the state’s investment pools. In a state where 47% of the populace owns a gun, Conine says voters supported him because with many states suing gun manufacturers, investing in them is a liability.

His divestment saved the state money, because it had moved out of equity positions in gun manufacturing that have since been massively devalued, he said. While it was a smart financial move, Conine said he also divested from gun manufacturers because he would like to see less violence.

“It was good to do the right thing, and even better that it proved to be the mathematically correct thing to do,” he said.

He said though it is within the scope of red state treasurers to ban underwriters who have divested away from oil or gun manufacturers, “it’s now been mathematically proven to be outside their fiduciary responsibilities,” Conine said.

“Look at Texas, and the studies that have been done on the additional cost of issuance, because they banned underwriters based on their positions on ESG. That is costing Texas billions of dollars on spreads on issuance. It was a bad fiduciary decision, but it is in the universe of decisions a treasurer can make,” he said.

“If it is a value within the state, then they should represent it, but from a fiduciary perspective, and how much it is costing the state, I don’t think it’s a good position to take,” he said.

“We divested from firearms because we thought it was a risky investment, but I also want to live in a state with less gun violence, and one way to do that is to not invest in gun manufacturing,” the 41-year-old treasurer said.

“Divesting from a liability is recognizing a market force,” Conine said. “Banning companies from working in your state is a political choice, not a market decision. It was their choice. I just wouldn’t have done the same.”

As for the infrastructure bank, the state’s biennium budget process had made it difficult for the state to line up matching funds often needed to qualify for federal funds, and the bank created through state legislation in 2021, was designed to fix that. The state issued $75 million in bonds in late 2021 to fund it.

“The infrastructure bank is up and running,” Conine said. “We have gone through the process to make sure the dollars are coming into the state. It’s a mechanism to make sure we are getting dollars matched, where they need to be matched.

“We often miss out on federal funding because our budget is on a different cycle than the federal government. Sometimes we found ourselves not having the structure in place to take advantage of money that was available,” Conine said. “This time it will be.”

There will be a bit of a transition as Lombardo replaces Sisolak as governor, but Conine said he is “cautiously optimistic the infrastructure bank will continue to progress.”

Democrats retained control of the state legislature.

The bank wasn’t established to target specific projects, but Conine said the state is focused on housing and providing funding for non-profit charter schools. The money could also support water reclamation projects as the state, one of several that receives water from the Colorado River continues to adapt to the fourth year of drought.

“It’s less about this specific project, and more that ‘here’s money coming from the federal government that every other year would pass us by,'” Conine said.

Stakeholders in the Colorado River are meeting December 14-16 to continue negotiations around how much each can draw from that source. The conference hosted by the Colorado River Water Users Association brings together water officials, policymakers and interest groups from seven U.S. states, 30 Native American tribes and Mexico. The parties involved were supposed to reach an agreement on reductions in drawdowns from the drought-hammered river by an Aug. 15 deadline, but failed to do so.

The federal government is pursuing a two-pronged strategy that seeks to fund voluntary conservation programs, paying irrigators to forgo water, and analyzing mandatory cutbacks if a negotiated deal cannot be reached among water users.

“We have made sure that the infrastructure bank can invest and support water reclamation projects or technology like desalination,” Conine said. “Southern Nevada has been doing its part. Every drop of water goes back into our system. It’s a fully effective system, unlike other places. I would like to see other places exporting less, just like Nevada has been doing for a long time.”

Nevada receives the least amount of water from the Colorado River of the seven states that draw water from the river.

When water users divided up the water in 1922, “it was seen as laughable that southern Nevada received 300,000 acre-feet, because they thought the most that would be built in the middle of the desert was a gas station. Las Vegas was never imagined,” Jeffrey Kightlinger, former general manager of the Metropolitan Water District of Southern California, which supplies water to 26 member agencies in six southern California counties, told The Bond Buyer in a 2019 article on water rights.

California’s share of the Colorado is the largest of all the states at 4.4 million acre-feet, or more than a quarter of the river’s average annual flow. An average California household uses between one-half and one acre-foot of water per year for indoor and outdoor use.

“Nevada has really been diligent in their conservation efforts, because they grew up to the full amount and had to do something about demand,” Kightlinger said.

Nevada, a tourism-dependent state, came out of the slowdown in travel at the height of the COVID-19 pandemic fairly well.

“I think we are as well-positioned as we could be,” Conine said. “There are real differences in how the state came out of the pandemic vs. the Great Recession of 2008. We have had up to 19 months of record gaming revenue. That is not just driven domestically, but international travel coming back as well.”

One difference is that the state has a better relationship with the banks then it did during the Great Recession when the wave of foreclosures combined with job losses hit the state’s residents.

“We worked with the banks to put people in forbearance, rather than foreclosure and were able to keep 70,000 Nevadans in their homes,” Conine said.

“Right now, everything is hitting on every cylinder when it comes to the economy,” he said. “We have diversified tremendously. The diversification in the workforce and in revenue streams and in the job market have kept a lot of people working.”

The state also doesn’t have the huge overhang from unemployment insurance it did after the Great Recession.

“We paid it down before a cent of interest was charged,” Conine said. “We paid it back, all of it, every dollar we borrowed during the pandemic.”

The state’s rainy day fund is also the biggest it has been in the history of the state at $400 million.

Conine is excited to get back to work in his second term on some priorities that were sidelined as the pandemic took precedence.

“We lost two years to the pandemic to further streamline and work on efficiency measures,” Conine said. “I am always focused on how we can do what we do better.”

His plans include lobbying for legislation to increase the state’s public loan forgiveness plan, particularly for teachers and for medical professionals in underserved communities.