Tuesday, Sept. 10, 2002 | 9:54 a.m.
CARSON CITY -- Nevada voters in 1992 and 2000 soundly rejected proposed constitutional amendments to allow the state to lend money or its credit to private companies.
But state Sen. Randolph Townsend, R-Reno, has hit on a plan to tap into the state's Employee's Retirement Fund for $200 million -- in addition to $20 million from another state account -- to draw industry to Nevada.
"We're competing against the world and we're losing," said Townsend, who said the money should be used to persuade emerging companies to either locate to or expand in Nevada.
With the opening of Indian casinos in California, Nevada is going to lose part of its gaming business, Townsend said, and the state needs to have other businesses to pick up the slack.
The retirement fund, with more than $12 billion, is prohibited by the Nevada Constitution from being invested in state debt or lending the state money. Townsend said the state now invests $200 million of it in a company called Pathways that in turn invests in emerging technology companies in California.
He said none of that money is finding its way to Nevada. He said the board of directors of the state Public Employees Retirement Fund should have the say as to where that money is invested.
Under the plan, the pension fund and money from the state's unclaimed property fund would be invested in companies that would pay it back with interest. Townsend said they would have to show a commitment to such things as educational and arts programs in Nevada.
This is not the first time the retirement fund has been targeted by business. The state Economic Development Commission, under Lt. Gov. Lorraine Hunt, looked at tapping $50 million from the pension fund to finance emerging or new businesses in Nevada.
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