When state officials tout Nevada to out-of-state businesses, Nevada's lack of taxes on personal income, corporations and inventories are major incentives.
Now there's a new player.
"Today (businesses) tell us the primary reason we are looking at you (Nevada) is because you held the cost over the years on your workers' compensation," Gov. Kenny Guinn said in a pre-Labor Day interview. "It appears to be the No. 1 issue."
Nevada's system was cited by journalists investigating the Ohio "Coingate" scandal in which up to $13 million in rare coins turned up missing as part of a state investment there on behalf of injured workers.
Ohio's capital city newspaper, the Columbus Dispatch, noted that in 1999 Nevada switched to a private competitive system, ending an 86-year monopoly that was state-run, like the Ohio Bureau of Workers' Compensation.
Now a new independent study by the state of Oregon finds that Nevada's system - the Employers Insurance Company of Nevada - is on the rise in a national ranking through falling rates.
Premium-related rates have increased in Nevada only once in the last five years, and the state has gone from the 11th most expensive in 2002 to No. 26 in 2004 in that category, according to the newly released Oregon rankings and National Council of Compensation Insurance.
"It looks like you managed to have a rate decrease while most of the folks were going up," Derek Reinke, research analyst of the Oregon Department of Consumer and Business Services. "Position-wise, that makes you look quite a bit better."
On average, rates Nevada employers were paying for workers' compensation premiums went down more than 12 percent between 2002 and 2004, the study found.
"That is one of the bigger declines," Reinke said.
Guinn said he had not seen the Oregon report but is not surprised at the findings.
"It has been good for the state, good for its workers, good for business and been very good for us for economic diversification for companies to come here that are good companies," Guinn said of the privatized system. "That's one of primary reasons we are doing so well in economic development and diversification right now."
By privatizing the system, Nevada moved off its ledger sheet an unfunded liability of $1.6 to $2 billion with the private sector taking over responsibility for it, Guinn said. Also, the state was able to reduce its payroll by about 800 workers through retirements, employees joining the privatized company or taking other state jobs, he said.
Andrew Barbano, editor of NevadaLabor.com and a union member, said workers' compensation reforms in Nevada began to take hold during the administration of Gov. Mike O'Callaghan in the 1970s.
"He made reforms to a seriously broken system," recalled Barbano, who wants renewed workers' compensation upgrades to what he says is now "your typical insurance company."
"Workers' comp is almost as difficult as applying for welfare," he said. "The system is designed to jump you through lots of hoops (so) that it will frustrate you to the point where it will reduce claims."
Guinn said that "to make sure that we are protective of our workers" Nevada retained responsibility for arbitrating cases when it privatized the system.
"We handle that, so that's protection for individuals and the companies. We have a staff of people who actually hear those cases," Guinn said.
The governor also noted that privatization of workers' comp in Nevada also ensured that permanently disabled workers received a greater percentage of their normal salary.
"Costs were going up, and they were getting less and less in order to make it," Guinn said. "It was not a good situation."
Despite differences over the system, workers' comp provides a sense of financial comfort for employees, worker Francisco Martin, 44, of Reno notes.
"If they fall off a ladder, they (might) not have insurance," said Martin, who is in the sanitation business. "Sometimes, someone may get in an accident."
Mary Lau, executive director of the Retail Association of Nevada, said other states have followed Nevada's path on workers' compensation privatization, "but then they have opened the door far too much and have ended up with problems."
Neighboring California, for example "had really good rates, but then all of the sudden the market drove it up sky high," Lau said.
"Now they have a terrible mess over there," she said.
The Oregon study shows that California's workers' compensation premium rates are the nation's highest at $6.08 per $100 of payroll compared with Nevada's $2.58.
Also under the old system in Nevada, "we would lose employees through the cracks" by claims not being managed, Lau said.
Now, "there is an immediate care ethic for employees," Lau said. "There is such a competitive nature now in employment that people are very, very concerned about getting workers back on the job force."