The AA+ rating is the second-best rating a state can receive. A good bond rating means the state will secure lower interest rates when it sells bonds to pay for construction projects.

"You don't want to pay a premium to build roads or schools in this difficult time," Marshall said.

In a report released Tuesday, Standard & Poor's applauded the state for its steps to cut spending by nearly $1.2billion because of declining revenue.

But it added, "State decision-makers will have little choice but to increase taxes" to deal with an additional $300 million shortfall this fiscal year and as much as $1.5 billion in the next two-year budget cycle.

Standard & Poor's expects economic recovery in Nevada beginning in 2010.

It applauded the state for "timely and careful management of both the expenditures side and revenue side of Nevada's budget."

"Importantly, the state has a track record of adjusting spending downward as revenues fall, in addition to raising taxes, to balance its budget."

So far, however, the state has not increased taxes while dealing with the current shortfall.

Marshall said she and state Budget Director Andrew Clinger worked with Standard & Poor's to explain how the state has continued to balance its budget.

Although the recession has hurt Nevada more than it has other states, Marshall said the report indicates that Nevada has taken appropriate fiscal restraints so that the economy will climb dramatically when the recovery comes.

"Those cranes may be sitting idly in Vegas now, but they can quickly ramp up," she said.

Standard & Poor's noted Nevada had been leading the nation in job and population growth and continues to receive 5,000 new residents a month.