36 States Elect Governors Who Shape Incentives

On November 3, 2026, voters in 36 states will elect governors, and in 18 of those states no incumbent is on the ballot. Fifteen sitting governors are term-limited and three more, Iowa's Kim Reynolds (R), Minnesota's Tim Walz (D), and Wisconsin's Tony Evers (D), are retiring. The winners will appoint economic-development leadership, propose the first state budgets of 2027, and shape which discretionary incentive programs continue.

Most primaries are over. Arizona (July 21), Michigan (August 4), Wisconsin (August 11), and Florida (August 18) have set their general-election matchups. As of late August, the Cook Political Report rated Georgia, Nevada, Ohio, and Wisconsin toss-ups and Arizona and Michigan Lean Democratic. For companies with pending applications or 2027 site decisions, the November 3 results bear on which incentive programs and terms will be available.

A Map With Half Its Seats Open

Eighteen open seats mean the deal team, commerce leadership, and budget priorities reset in 18 states in January 2027. Incumbents also defend in Nevada (Gov. Joe Lombardo (R) v. Attorney General Aaron Ford (D), both nominated June 9), Texas (Gov. Greg Abbott (R) v. state Rep. Gina Hinojosa (D)), and New York (Gov. Kathy Hochul (D) v. Nassau County Executive Bruce Blakeman (R), both nominated June 23). In Pennsylvania, Gov. Josh Shapiro (D) faces State Treasurer Stacy Garrity (R), both nominated May 19. Iowa's open seat, where State Auditor Rob Sand (D) faces Zach Lahn (R), is the one race most forecasters now rate as a Democratic flip. Exhibit 1 sets out seven races where incentive policy is a campaign issue.

Michigan: The SOAR Fund and the Governor's Race

Michigan's legislature has already shut off the state's flagship megadeal fund. The next governor will shape what, if anything, follows it. Lawmakers excluded SOAR, the roughly $2 billion cash-for-jobs program created in late 2021, from the $81 billion FY2026 budget enacted in October 2025, rejecting the additional $500 million Governor Gretchen Whitmer had sought. The MEDC says SOAR awards were tied to $11 billion in promised private investment, of which $1.1 billion has been spent. Criticism was bipartisan, and House Finance Chair Mark Tisdell (R-Rochester Hills) said "project selection was too political, and it never delivered."

The August 4 primary produced two nominees with different answers to what comes next. Secretary of State Jocelyn Benson won the Democratic nomination with 83.2% of the vote. Rep. John James (R-MI-10), endorsed by President Trump, won a crowded Republican field with 50.1%, about 15 points ahead of businessman Perry Johnson. (Former Detroit Mayor Mike Duggan's independent bid ended May 21.) Benson told Bridge Michigan that "tools like the Michigan Economic Development Corporation and targeted tax credits have a role in this strategy, but only when they come with clear transparency and accountability," and that she would expand career and technical education and apprenticeships. James would end SOAR and pair a "comprehensive audit of all expenditures" with an MEDC that has "a bias toward retention and reclamation."

Benson leads in cash on hand and in forecaster ratings, and neither nominee proposes rebuilding a discretionary cash fund. As of August 24, Benson held $5.9 million in her campaign account to James's $1.5 million, per Bridge Michigan, and Cook, Sabato's Crystal Ball, and RealClearPolitics all rate the race Lean Democratic. The MEDC report summarized by PolitiFact shows SOAR award holders self-reported 1,846 jobs through October 2025 against 14,559 promised. The state-verified count is zero because no verification deadline has arrived yet.

Tax Cut Proposals in Four Open-Seat Races

In Ohio, Georgia, Florida, and California, the Republican nominee's central economic promise is cutting or eliminating a broad-based tax, which would change the tax baseline against which site selectors weigh traditional incentives. Ohio's Vivek Ramaswamy (R), who won the May 5 primary with 82.4%, would phase out the state income tax, which brings in about $10.4 billion a year, over 10 years, starting with capital gains. He argues that growth will take Ohio's population to 15 million and raise sales-tax revenue. Former state health director Amy Acton (D) says she would cut taxes for working families and lower costs, and her campaign says his plan to eliminate property and income taxes "will gut schools, healthcare and public safety." Public polls in August had the race within two points.

Georgia's Rick Jackson (R), the Jackson Healthcare founder who won the June 16 runoff over Lt. Gov. Burt Jones by about six points, pledges to cut income taxes in half. His stated path is to halve the rate within four years, from the 4.99% flat rate that House Bill 463, signed May 11, 2026, set retroactive to January 1, 2026, and then eliminate it within eight, alongside a property-tax freeze. Former Atlanta Mayor Keisha Lance Bottoms (D), nominated May 19, is running on Medicaid expansion, cost-of-living relief, and fully funding pre-K.

Florida and California show the same pattern from different tax baselines. Florida's Rep. Byron Donalds (R-FL-19), who won the August 18 primary with 47.8%, says he would move to eliminate property taxes through the state Tax and Budget Reform Commission, which convenes in 2027. David Jolly (D), who took 61.0% of his primary, would create a state catastrophe fund of $30 billion to $40 billion to cut property-insurance costs. California's Steve Hilton (R) would exempt the first $150,000 of earnings from income tax and apply a flat rate above it, and says he would pay for it by cutting waste. Xavier Becerra (D) would freeze utility and insurance rates by emergency declaration, per CalMatters. Exhibit 2 sets the four Republican tax proposals beside their opponents' stated focus.

Wisconsin and Arizona: Data Centers and Semiconductors

Where the marquee investments are data centers and fabs, nominees in both parties are focused on who pays for the power. Wisconsin's Democratic primary changed shape late. Lt. Gov. Sara Rodriguez withdrew July 17. Milwaukee County Executive David Crowley, who had ended his own campaign July 8 and endorsed her, re-entered the next day, picked up Gov. Evers's endorsement, and on August 11 beat state Rep. Francesca Hong by 3,673 votes, 39.8% to 39.4%. Rep. Tom Tiffany (R-WI-07), Trump-endorsed, took 95.3% of the Republican vote. Marquette's August 12 to 20 poll had Crowley ahead 49% to 44% among likely voters, with registered voters tied at 44%, and Cook rates the race a toss-up.

On data centers, the two nominees start from the same premise and differ on the remedy. Crowley told PBS Wisconsin that "there's community benefits that are going to be tied to this level of development," and asks how projects can fund schools and broadband. Tiffany's test is that "we do not harm existing ratepayers, so residential ratepayers and manufacturers," and he says the state is "probably going to have to find a new template of how we deal with energy and the data centers." Both nominees' stated tests point toward rate-protection or community-benefit conditions on future Wisconsin data-center packages.

In Arizona, the incumbent runs on the semiconductor buildout and the challenger voted against the law that funded it. Gov. Katie Hobbs (D) points to TSMC's Phoenix complex, which carries a $6.6 billion finalized CHIPS Act award, and to the registered apprenticeships her administration has expanded with the company. Rep. Andy Biggs (R-AZ-05), who won the July 21 primary with 74.0% over Rep. David Schweikert's 14.4%, was a Nay vote on the CHIPS and Science Act on July 28, 2022, and is a former chair of the House Freedom Caucus. Emerson's November 2025 survey had the race at 44% to 43%. Public polls in August 2026 averaged 47% to 40% for Hobbs, and Cook and Sabato's Crystal Ball rate the race Lean Democratic.

Two Ballot Measures That Rewrite Incentive Law Directly

Arkansas voters will decide whether to constitutionalize a new local incentive tool, and California voters will decide whether the state can tax accumulated wealth. Arkansas's Issue 3, referred by the legislature as SJR 15 in April 2025, would authorize the General Assembly to create economic development districts within cities, counties, or cooperative areas. A district "may issue bonds for the purpose of financing projects within the economic development district," and property inside one "shall be exempt from taxation except for taxes, assessments, or other charges levied by the economic development district." For a company building a $100 million facility, exemption at Arkansas's constitutional 20% assessment ratio and a representative 50-mill combined levy is worth roughly $1.0 million per year, before district assessments.

California's Proposition 40 is a one-time 5% tax on the net worth of residents at or above $1 billion. The initiative text imposes the tax for tax year 2026 on individuals resident in California on January 1, 2026, and on certain trusts, measured on December 31, 2026, with directly held real property excluded and qualified pensions and IRAs exempt (Roth-type accounts up to $10 million). A founder holding $10 billion in covered assets would owe $500 million. Proposition 40 qualified June 17 with 980,438 valid signatures. Two competing measures qualified June 25: Proposition 42 would prohibit new state taxes on personal assets, savings, and retirement holdings and bar retroactive taxes, and prevails over Proposition 40 if it draws more votes. Proposition 41 would require audits of new state special taxes. Building a Better California, the committee behind them, has received $57 million from Google co-founder Sergey Brin, per Ballotpedia. Exhibit 3 compares Proposition 40 with Arkansas Issue 3.

How a Transition Affects Pending Awards

Executed contracts generally hold through a change in administration, while unexecuted commitments and discretionary programs are more exposed. Approvals often slow between November and a new administration's first budget, as outgoing teams avoid binding their successors and incoming teams review pipelines. New governors often name new leadership at agencies such as the MEDC, the Wisconsin Economic Development Corporation, and the Arizona Commerce Authority. Wisconsin's renegotiation of the Foxconn contract after the 2018 election and Michigan's defunding of SOAR show what can change. As-of-right credits and exemptions tend to carry through transitions better than discretionary cash, and in Georgia and Ohio the candidates' tax platforms would change the baseline those incentives are measured against. If Arkansas voters approve Issue 3, the General Assembly could begin creating economic development districts. Exhibit 4 lays out the transition calendar.

What to Do Now

This is for companies with a pending incentive application, an unexecuted award, or a 2027 site decision in one of the 36 states electing a governor on November 3. Discretionary awards are more exposed during the transition window in Exhibit 4 than executed contracts are. If you want a read on how a race or ballot measure affects a specific project before November 3, reach out to our team.

References

1. Ballotpedia, "Gubernatorial elections, 2026".
2. Wikipedia, "2026 United States gubernatorial elections" (race ratings as of Aug. 27-30, 2026; primary results).
3. The Statehouse News Bureau, "Vivek Ramaswamy scores big win in GOP primary for governor, will face Amy Acton this fall," May 5, 2026.
4. The Statehouse News Bureau, "Ohio governor race: Republican Ramaswamy talks zero income taxes, property tax rollback," April 6, 2026.
5. WABE, "Jackson beats Jones in Republican primary runoff for Georgia governor," June 16, 2026.
6. Office of Governor Brian P. Kemp, "Gov. Kemp Signs Legislation Lowering Taxes and Supporting Economic Growth," May 11, 2026.
7. Bridge Michigan, "Michigan legislators kill Gretchen Whitmer's $2B cash-for-jobs program," Oct. 3, 2025.
8. Bridge Michigan, "In their words: How Michigan governor candidates would build the state economy," June 22, 2026 (updated Aug. 19, 2026).
9. Bridge Michigan, "Jocelyn Benson outraises John James. See top donors in Michigan governor race," Sept. 4, 2026.
10. Michigan Advance, "Duggan drops independent bid for governor, remapping 2026 Michigan gubernatorial landscape," May 21, 2026.
11. PBS Wisconsin, "Data centers and Wisconsin's 2026 candidates for governor," Feb. 18, 2026.
12. Wikipedia, "2026 Wisconsin gubernatorial election" (Aug. 11, 2026 primary results; Marquette Law School Poll, Aug. 12-20, 2026).
13. The Daily Reporter, "Missy Hughes drops out of governor race, endorses Sara Rodriguez," June 22, 2026.
14. Wikipedia, "2026 Arizona gubernatorial election" (State of Arizona official canvass, July 21, 2026 primary).
15. Emerson College Polling, "Arizona 2026: Governor Hobbs Faces Tight Re-Election Race; Rep. Biggs Leads GOP Primary," Nov. 8-10, 2025.
16. Office of Sen. Mark Kelly, "Kelly and Arizona Leaders Celebrate Finalized $6.6 Billion CHIPS and Science Act Award to TSMC."
17. Clerk of the U.S. House of Representatives, Roll Call 404, H.R. 4346 (CHIPS and Science Act), July 28, 2022.
18. Wikipedia, "2026 Florida gubernatorial election" (Aug. 18, 2026 primary results; polling averages).
19. Arkansas Senate, "Legislature Places Three Proposed Amendments on 2026 Ballots," April 2025.
20. Arkansas General Assembly, SJR 15 (2025 Regular Session), enrolled text; Arkansas Secretary of State, 2026 Ballot Issues.
21. Ballotpedia, "Arkansas Authorize Legislature to Create Programs for Economic Development Including Economic Development Districts Amendment (2026)."
22. Ballotpedia News, "Two California tax initiatives targeting personal asset taxes and special tax rules qualify for the ballot," June 25, 2026.
23. California Attorney General, Initiative 25-0024A1 ("2026 Billionaire Tax Act"); California Secretary of State, Qualified Statewide Ballot Measures, Nov. 3, 2026.
24. CalMatters, "Who are the 2026 California governor candidates?"
25. PolitiFact, fact-check of Mallory McMorrow's claim on SOAR fund jobs, June 4, 2026.

© Copyright 2026 TC Policy Group, LLC (d/b/a Crawford Partners). The views expressed herein are those of the author(s) and not necessarily the views of Crawford Partners, its management, its subsidiaries, its affiliates, or its other professionals. Crawford Partners is not a law firm and cannot provide legal advice.