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.
Key Takeaways
| 01 | Half of the 36 governorships on the ballot are open seats, and governors set much of state incentive policy. Democrats and Republicans each defend 18. The Cook Political Report rates Georgia, Nevada, Ohio, and Wisconsin toss-ups and Iowa a Democratic pickup opportunity. |
| 02 | Michigan's race turns directly on incentive policy. The legislature has already defunded the roughly $2 billion Strategic Outreach and Attraction Reserve (SOAR) Fund, and nominees Jocelyn Benson (D) and John James (R) differ on the role the state's economic development agency and targeted incentives should play. |
| 03 | In four open-seat races, broad tax cuts are the Republican nominees' main economic proposal. The Republican nominees in Ohio, Georgia, Florida, and California would cut or eliminate income or property taxes, and their Democratic opponents are running on cost-of-living measures. |
| 04 | Two ballot measures would change incentive and tax law directly. Arkansas's Issue 3 (Senate Joint Resolution 15) would constitutionalize economic development districts that can issue bonds and exempt property from other taxes. California's Proposition 40 would tax billionaires' net worth once at 5%, and Proposition 42, which would bar new state taxes on personal assets, prevails over it if it draws more votes. |
| 05 | The transition itself is a risk to pending awards. Discretionary approvals often slow between November and a new administration's first budget, agency leadership can turn over, and unexecuted commitments can be reviewed. |
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.
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.
Exhibit 1
Seven governor's races with incentive-policy stakes, Cook Political Report ratings as of Aug. 27, 2026
| State | Seat status | Matchup | Rating (Cook, Aug. 27) | Incentive storyline |
|---|---|---|---|---|
| Ohio | Open (DeWine term-limited) | Vivek Ramaswamy (R) v. Amy Acton (D), set May 5 | Toss-up | Income-tax phase-out proposal |
| Georgia | Open (Kemp term-limited) | Rick Jackson (R) v. Keisha Lance Bottoms (D), set June 16 | Toss-up | Halving the 4.99% income tax; property-tax freeze |
| Michigan | Open (Whitmer term-limited) | John James (R) v. Jocelyn Benson (D), set Aug. 4 | Lean D | SOAR defunded; Michigan Economic Development Corporation (MEDC) reform pledges |
| Wisconsin | Open (Evers retiring) | Tom Tiffany (R) v. David Crowley (D), set Aug. 11 | Toss-up | Data-center energy and community-benefit terms |
| Arizona | Incumbent | Gov. Katie Hobbs (D) v. Andy Biggs (R), set July 21 | Lean D | Semiconductor buildout continuity |
| Florida | Open (DeSantis term-limited) | Byron Donalds (R) v. David Jolly (D), set Aug. 18 | Likely R | Property-tax overhaul; insurance costs |
| California | Open (Newsom term-limited) | Xavier Becerra (D) v. Steve Hilton (R), top-two set June 2 | Solid D | Income-tax overhaul; Props 40 and 42 |
Sources: Wikipedia, "2026 United States gubernatorial elections" (ratings table as of Aug. 27-30, 2026); state election authorities.
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."
"I will end the era of Whitmer's $670 million SOAR fund, which produced zero jobs."
Rep. John James (R-MI-10), Republican nominee for governor of Michigan
Source: Bridge Michigan, "In their words: How Michigan governor candidates would build the state economy" (June 22, 2026; updated Aug. 19, 2026). Photo: official photo, U.S. House of Representatives.
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.
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.
Exhibit 2
Tax proposals in four open-seat races, as stated by the campaigns through early September 2026
| State | Republican nominee | Tax proposal | Current baseline | Democratic nominee's stated focus |
|---|---|---|---|---|
| Ohio | Vivek Ramaswamy | Phase out income tax over 10 years, capital gains first | About $10.4B a year in income-tax revenue | Amy Acton: tax cuts for working families, lower costs |
| Georgia | Rick Jackson | Halve income tax in 4 years, eliminate in 8; freeze property taxes | 4.99% flat rate (HB 463, effective Jan. 1, 2026) | Keisha Lance Bottoms: Medicaid expansion, cost-of-living relief, pre-K funding |
| Florida | Byron Donalds | Eliminate property taxes through the 2027 Tax and Budget Reform Commission | No state income tax; property tax is the local base | David Jolly: $30B to $40B state catastrophe fund to cut insurance costs |
| California | Steve Hilton | Exempt first $150,000 of earnings; flat rate above | Top marginal rate 13.3% | Xavier Becerra: emergency freeze of utility and insurance rates |
Sources: Statehouse News Bureau; Ramaswamy campaign; WABE; Office of Gov. Brian P. Kemp; WLRN; Jolly campaign; KESQ; CalMatters.
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.
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.
Exhibit 3
Arkansas Issue 3 and California Proposition 40, as written in the measure texts
| Feature | Arkansas Issue 3 (SJR 15) | California Proposition 40 |
|---|---|---|
| Mechanism | Constitutional amendment authorizing economic development districts | One-time excise tax on net worth |
| Who is affected | Property owners inside a district | Residents with net worth of $1B or more on Jan. 1, 2026 |
| Rate or benefit | Exemption from all taxes except district levies | 5% of net worth, measured Dec. 31, 2026 |
| Exclusions | Already-exempt property keeps its status | Directly held real property; qualified retirement accounts |
| Financing | District bonds and assessments | Revenue to health care, education, food assistance |
| Competing measure | None | Prop 42 (asset-tax ban) overrides if it draws more votes |
Sources: SJR 15 (2025); Arkansas Secretary of State; California Attorney General, Initiative 25-0024A1; California Secretary of State.
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.
Exhibit 4
Transition calendar, November 2026 to March 2027
| Date | Milestone |
|---|---|
| Nov. 3, 2026 | Elections in 36 states; Arkansas Issue 3 and California Props 40, 41, and 42 decided |
| Nov. to Dec. 2026 | Certifications, transition teams, agency handoffs |
| Jan. 2027 | Most inaugurations; legislative sessions convene |
| Jan. to Mar. 2027 | First executive budget proposals, the first formal statement of each new administration's incentive priorities |
Sources: Ballotpedia; state election authorities.
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.
© 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.