Recent Trends in State and Local Incentives Across the Southeast

As businesses evaluate potential locations for expansion or relocation, state and local incentives play a crucial role in the decision-making process. The Southeast region has become a hotspot for business growth, driven by competitive incentive programs, favorable tax policies, and strategic infrastructure investments. However, while incentives can be a significant factor, companies must also consider workforce availability, infrastructure readiness, and long-term operating costs. Below, we explore some of the recent trends in state and local incentives that are shaping site selection in the Southeast.

1. Increasing Use of Performance-Based Incentives

Many states in the Southeast are shifting toward performance-based incentives, requiring companies to meet job creation, wage thresholds, and investment commitments before receiving financial benefits. This trend ensures accountability while aligning incentives with long-term economic development goals. For example, Georgia’s Job Tax Credit program offers tax relief for companies creating high-wage jobs in targeted sectors.

2. Expansion of Workforce Training Programs

With the competition for skilled labor intensifying, states are investing heavily in workforce development programs. South Carolina’s ReadySC initiative provides customized training for new and expanding businesses, while Alabama’s AIDT (Alabama Industrial Development Training) program offers free workforce training to qualifying employers. These initiatives help companies secure a trained workforce while reducing recruitment and onboarding costs. However, companies must look beyond training incentives and assess the actual availability of skilled workers in a region before making a final site decision.

3. Enhanced Infrastructure and Logistics Support

States across the Southeast are increasing investments in infrastructure to attract large-scale projects. Tennessee and North Carolina have introduced new grant programs to support site readiness, road improvements, and utility upgrades. Additionally, port expansions in Florida and Georgia are improving logistics capabilities, making the region even more attractive to manufacturers and distribution centers. While these enhancements are beneficial, businesses should carefully evaluate whether a location’s infrastructure aligns with their specific operational needs beyond just the incentives offered.

4. Green Energy and Sustainability Incentives

As sustainability becomes a top priority for businesses, states are offering incentives to attract environmentally conscious companies. Florida’s Solar Energy System Incentives and North Carolina’s Renewable Energy Tax Credits encourage companies to adopt green energy solutions. Additionally, electric vehicle manufacturers and battery production facilities are benefiting from targeted grants and tax credits in states like Georgia and Tennessee. While these incentives can help offset costs, companies should assess whether a location has the long-term energy capacity and sustainability commitments necessary to support their operations.

5. Mega Project and Customized Incentive Packages

With the rise of billion-dollar investments in manufacturing, semiconductor production, and EV assembly plants, states are tailoring incentive packages to meet the needs of mega projects. Tennessee and Kentucky have been particularly aggressive in offering customized incentive deals, including long-term tax abatements, infrastructure grants, and low-cost financing options. However, businesses must remain mindful that large incentives do not always equate to an ideal location—factors such as workforce stability, supply chain proximity, and site readiness remain paramount.

6. Increased Scrutiny on Incentive Programs

As incentive programs continue to grow, so does the scrutiny surrounding their administration and impact. State and local governments are becoming more selective in awarding incentives, requiring companies to demonstrate clear economic benefits, such as sustained job creation, higher wages, and community investment. Transparency and accountability measures, including stricter compliance requirements and periodic performance audits, are becoming standard practice.

Businesses seeking incentives should anticipate longer approval timelines, increased reporting obligations, and a greater emphasis on long-term economic contributions. At Land Strategies, we specialize in navigating these complexities, ensuring that companies structure their incentive agreements to maximize benefits while remaining compliant with evolving regulatory expectations. Our expertise helps businesses secure competitive incentive packages while mitigating potential risks associated with heightened scrutiny.

7. Balancing Incentives with Workforce and Operating Costs

In today's business climate, where labor shortages and skills gaps present ongoing challenges, it is crucial for companies to consider the overall operating expenses of a location rather than letting incentives dictate site selection. While large incentive packages may seem attractive, they do not compensate for a poor location with high labor costs, workforce shortages, or logistical inefficiencies.

Companies must evaluate workforce availability, long-term operational costs, and the ability to attract and retain skilled employees. A location with significant incentives but limited access to qualified labor or high turnover rates can negatively impact productivity and profitability.

At Land Strategies, we help businesses take a comprehensive approach to site selection by analyzing workforce trends, labor costs, and operational feasibility alongside incentives. Our goal is to ensure companies choose locations that support sustainable growth and operational efficiency rather than being swayed by short-term financial incentives.

Conclusion

The Southeast continues to position itself as a prime destination for business investment through its evolving incentive landscape. While performance-based tax credits, workforce training initiatives, and sustainability-focused programs make the region attractive, businesses must take a holistic approach to site selection. Incentives alone should not drive decisions—factors such as workforce availability, infrastructure quality, and long-term operating costs must be weighed carefully. At Land Strategies, we help companies navigate these complex decisions, ensuring they maximize financial benefits while selecting locations that align with their long-term strategic goals.