CHAMPAIGN — —
Iowa was chosen over Illinois last year for the construction of a $1.8 billion fertilizer plant. Gov. Terry Branstad has been criticized for about $82.5 million in state tax credits promised to Egypt-based Orascom for the plant in far southeast Iowa.
Illinois has found itself offering large tax-break packages in the past years to companies who have threatened to leave the state. Those tax breaks were defensive moves, often seen as products of the state's poor fiscal condition and competition from other states that sensed Illinois companies might be lured away.
But incentives are, unfortunately, just part of doing business, University of Illinois economist Fred Giertz said.
"In an ideal situation, you'd hope it wasn't necessary to do this, that the states would just compete on the advantages of their location," he said.
Giertz added that money for things such as highway improvements might benefit more than just one company, and make more sense than pure tax cuts.
There are no guarantees that each of the country's planned fertilizer plants will be built. One by Canadian firm Agrium Inc., was put on hold in June.
Sometimes, Moody said, big industrial projects often run into hurdles they can't clear. Tuscola was tantalizingly close to drawing a major energy production facility just a few years ago, which was killed by the economic downturn.
"We had basically scheduled the announcement, and the project didn't happen," he said.
But Lundy says Cronus hasn't run into any obstacles yet, and Moody says he believes it will happen — whether in Illinois or Iowa.
"My sense is, this time, just with working with Cronus, they absolutely intend to drive through on this project," Moody said.