* Gov. Pat Quinn and Mayor Rahm Emanuel have announced several new plant and corporate headquarter openings and expansions in recent months. But the state lost out to Iowa for a factory that would have employed 165 people. Our neighboring state paid dearly for that fertilizer plant…
The incentives grow to $251 million, with $133 million in property tax abatement that Lee County supervisors agreed to provide the project Wednesday.
That would mean the cost per job is more than $1.5 million
* Illinois actually offered a more generous package, but the offer was turned down in favor of the higher-tax Iowa…
Branstad and others blamed Iowa’s corporate income tax structure for driving higher the incentives Orascom Construction Industries received to bring the plant and its 165 jobs to Iowa.
“Even with (Illinois’) tax increases and poor fiscal management, Iowa had difficulty competing because our tax climate is worse for a project like this with substantial sales to farmers in Iowa,” Branstad said. “If that doesn’t wake us up, I don’t know what will.”
* From the Tribune editorial board…
“The promises we got in Illinois were extremely attractive,” Sawiris noted. But Illinois’ promised benefits, he went on to say, “are not sustainable in our view given the balance sheet of the state of Illinois.”
“Whatever tax regime exists today we have to take with a grain of salt,” Sawiris said. “The unfunded pension liabilities of the state of Illinois were a big concern to us, let alone the hypothetical situations that exist in doing business in Illinois and Chicago.”
That reference to public corruption got a big laugh from the Iowa crowd at the news conference. Gov. Branstad couldn’t resist grabbing away the microphone to point out that in modern times only two previous governors in Illinois were not led away in handcuffs.
“The difference is we have a history of clean, honest government,” Branstad boasted. “They have a history of corruption.”
*** UPDATE *** From an IL DCEO spokesperson…
To be clear—The state never put an offer on the table. We recognized early on that Iowa’s bid was excessive and we were not going to engage in a bidding war…
Representatives of the company started engaging with us very late in the game, and for a transaction of this size, we would have had direct contact with the company itself–that did not occur.
Due to Iowa’s offer, Iowa taxpayers are handing Orascom a very lavish tax incentive while Illinois taxpayers are spared.
The key benefit here is lower anhydrous ammonia prices for farmers in Iowa and Illinois. Our farmers obtain that benefit regardless of where in the Midwest the plant is located.
Illinois continues to be a great place for business, as is shown by the 140,000 private sector jobs that have been created since January 2010. We will continue to aggressively pursue every opportunity to bring more jobs and economic opportunity to the state.
From that statement, it looks like Iowa was stampeded into upping its price when the company made a phony feint toward Illinois. Very clever move. The company gets mega bucks from Iowa and the locals. And then Gov. Branstad gets bragging rights over Illinois. And the Tribune gets its editorial. And Illinois farmers get a better deal on fertilizer. And Iowans pay a very heavy price.