To address regional cost-of-doing-business differences, all fifty states offer some form of economic development incentives. These incentives play a supporting—but often decisive—role in corporate site location decisions. As highlighted in national data, tax credit programs are offered by nearly every state, followed by additional tools such as data center incentives and broad-based tax abatements. According to Princeton Economics, state and local governments invest approximately $45–60 billion annually in economic development incentives, even as companies pay more than $1,096 billion each year in state and local taxes.
The Montrose Group has compiled a comprehensive economic development incentive guide covering all fifty states, available at https://montrosegroupllc.com/50-state-incentive-guide/. Rather than providing a high-level overview of incentives nationwide, this article takes a deeper look at the economic development incentive guide findings for Indiana, Kentucky, and Ohio to illustrate how incentive structures differ across neighboring states.
Ohio Economic Development Incentives
Ohio’s economic development incentive guide highlights the state’s unique funding structure, which benefits from revenue generated by state liquor store profits. These resources are managed by JobsOhio, a private-sector economic development corporation that drives corporate site location projects in partnership with regional economic development organizations, cities, and counties. Local jurisdictions are empowered to offer property tax abatements and income tax rebates, giving Ohio a flexible and well-resourced incentive toolkit.
Indiana Economic Development Incentives
Indiana’s economic development incentive guide reflects the state’s reputation for lower overall taxes and a property tax abatement process that, in most cases, does not require approval from local school districts. While this structure can be attractive to companies, recent public disputes between the Governor and the Indiana Economic Development Corporation have created uncertainty that may hinder the state’s ability to compete for corporate site location projects.
Kentucky Economic Development Incentives
Kentucky offers a broad range of economic development incentives, as outlined in the Montrose Group’s economic development incentive guide. However, the state’s smaller population base limits the overall scale and financial capacity of these programs when compared to larger states, which can affect Kentucky’s competitiveness for major corporate site location investments.
Indiana, Kentucky, and Ohio each provide substantial economic development incentives that address multiple cost centers in a corporate site location analysis. Among them, Ohio’s larger population, stronger revenue base, and well-funded private economic development organization position the state with greater day-to-day resources to support economic development and corporate site location projects.