Midterms bedevil corporate HQ arbitrage
SPY•Democrats won governorships in Texas and Georgia, but companies may keep relocating to states such as Texas for lower taxes, cheaper living costs and established business networks. The article says stricter reviews, labor laws and investigations could follow the political shifts.
1. Relocation drivers remain
The midterm results mean Democrats will soon control the governors’ offices of nine of the 10 largest state economies, including Texas and Georgia. But the article argues that existing incentives for corporate relocations are unlikely to disappear: companies cite operational consolidation first, followed closely by lower taxes and a cheaper cost of living. Dallas, Miami and Austin were the top destinations in a CBRE survey.
2. Policy could shift
Texas has no state income tax, and companies including Chevron, ExxonMobil, Oracle, Tesla and Caterpillar have established operations there. The article says development and environmental reviews, particularly for data centers, could become stricter in some states, while changes to wage and labor laws and more investigations are also possible.
3. Growth brings change
Texas adds more than 1,000 residents a day, while the Atlanta area’s population grew 94% from 1990 to 2020. The article says growth has changed demographics and politics in states that have attracted businesses.
