Business Expansion in 2026

State Policy Changes Affecting Business Expansion in 2026

This is the time of year when the biggest economic development opportunities are quietly taking shape. While many leadership teams are focused on forecasts, hiring plans, and capital decisions, statehouses across the Midwest are finalizing policies that directly influence the cost of doing business, expansion operations, and investing in people. In Indiana alone, lawmakers introduced 500+ bills in the short session that ends early this year, underscoring how much can move before most businesses look up from annual planning.

A few themes consistently emerging across the region:

• Workforce housing and childcare as economic growth levers. (See Michigan’s budget proposals that include employer‑assisted housing and child‑care aligned workforce tools.)
• Upskilling and training incentives tied to employers. (Michigan’s FY26 plan funds apprenticeships and MEDC’s Talent Action Team; Indiana is advancing wage‑based retention credits via EDGE.).
• Industrial site readiness and energy infrastructure investment. (Illinois’ $500M Site Readiness package; Ohio’s HB 15 accelerates energy facility approvals and lowers assessment rates for new generation/transmission.)
• Targeted tax credits for manufacturing, redevelopment, and innovation. (Indiana’s update to EDGE; Michigan’s MBDP/CIP tools continue under “Make It in Michigan.”

Here’s what that looks like on the ground:

ILLINOIS

Illinois is investing heavily in site readiness and surplus property redevelopment, pairing a $300M Surplus to Success program (focused on remediating and preparing idle state properties) with $200M to expand the Department of Commerce & Economic Opportunity’s site programs. The combined $500M represents the largest site readiness investment in state history and targets five high‑priority properties (Dwight Correctional Center; Singer Mental Health Center in Rockford; Jacksonville Developmental Center; Lincoln Developmental Center; and unutilized land at Shapiro Developmental Center in Kankakee).

For business attraction, which means faster timelines and more “shovel‑ready” sites—with state resources aimed at cleanup, demolition, and utility preparation so projects can move from LOI to groundbreaking more quickly. (Lawmakers spotlighted the initiative in the FY2026 budget communications; independent budget analysts also flagged the state’s pivot to site‑driven growth.)

INDIANA

Indiana is prioritizing workforce upskilling and retention through employer‑linked credits and sharpening its project‑readiness and regional growth posture. SB 264 (2026) advances through the Senate and would expand the EDGE tax credit so IEDC can (1) increase credits tied to relocation expenses for new hires moving to Indiana and (2) award credits for retaining employees with ≥25% wage increases—aligning incentives with talent strategies employers are already deploying. A Legislative Services Agency fiscal note clarifies the mechanics (including an allowance of up to $10,000 per new full‑time hire for relocation within EDGE’s cap structure).

At the same time, Indiana continues to refine energy and infrastructure policy (e.g., bills on carbon sequestration and solar siting) that affect permitting and local development timelines, reinforcing the push for growth outside the major metros through infrastructure certainty and predictable siting.

Tip for Indiana employers: If you’re planning wage adjustments to retain critical talent or relocating hard‑to‑fill roles into the state, model projects under the updated EDGE framework now so you’re queued up as SB 264 progresses.

KENTUCKY

Kentucky’s 2026 session (a budget year) is emphasizing development districts, tourism/entertainment incentives, workforce, infrastructure, and energy capacity—with leadership signaling support for expanded power generation (including nuclear) to meet hyperscale data‑center demand, and business groups pushing for TIF fixes and modern revenue tools that support community development.

The Kentucky League of Cities’ 2026 agenda call out a permanent TIF solution and broader regional economic development taxation authority; the Kentucky Chamber prioritizes workforce, housing/childcare, and continued tax reform to strengthen competitiveness—policies that directly influence where and how new districts and attractions come together.

MICHIGAN

Michigan continues to focus on business attraction and community revitalization through the “Make It in Michigan” strategy—pairing workforce funding with place‑based investments. The Governor’s FY26 proposal backs MEDC’s Talent Action Team and small‑business hubs, and includes employer‑assisted housing and targeted tools for auto supplier retooling—with legislative fiscal summaries detailing workforce and community line items.

On the ground, the Department of Labor & Economic Opportunity is running 2026 workforce grant rounds (e.g., Reliable Rides pilot to solve transportation barriers; Young Professionals 2026 RFP to scale youth employment). These programs are designed to pair employer needs with talent pipelines—critical for companies timing expansions.

OHIO

Ohio is accelerating energy project approvals and resetting tax treatment for new energy infrastructure. HB 15 (signed 2025; taking effect 2025–2027) shortens OPSB permitting timelines (completeness review in 45 days, hearings within 45–60 days, decisions within 150 days of completeness) and reduces the tangible personal property assessment rate on new generation/storage equipment to 7% and on new transmission/distribution and pipeline property to 25% beginning Tax Year 2027—a significant shift that can improve project economics and support industrial growth tied to power availability.

Lawmakers also advanced broader regulatory changes (e.g., repealing Electric Security Plans, enabling refunds for unlawful rates, and aligning incentives for brownfield energy development), signaling a multi‑year build‑out strategy for energy capacity that underpins large‑load manufacturing and data center projects.

The bigger signal?

States are competing aggressively for businesses that plan ahead. Economic development incentives rarely reward reaction. They reward foresight, alignment, and timing—especially in 2026, with site readiness funds, energy capacity policy, and employer‑linked workforce tools moving quickly through legislatures. (Indiana alone is moving dozens of fiscal and development‑adjacent measures this short session, and Illinois and Ohio have teed up multi‑year capital and tax frameworks that are already shaping deal calculus.)

The question isn’t whether incentives exist.

It’s whether your business is positioned early enough to use them.

If growth, expansion, or reinvestment is on your horizon in the next few years, now is the moment to understand what’s being written into policy and how it may work in your favor.

What we recommend next for expansion (fast, practical):

1. Map your 24–36‑month hiring and capex to 2026 policy windows (e.g., Indiana’s EDGE updates; Illinois site‑readiness grant timing; Ohio TY2027 assessment changes).
2. Pre‑qualify sites in Illinois/Indiana with environmental, utility, and zoning diligence completed to leverage accelerated reviews or site‑readiness dollars.
3. Align talent plans to incentive criteria (apprenticeships, retention/wage thresholds, relocation support) so documentation is audit ready.
4. Model Ohio power‑intensive projects with TY2027 assessment assumptions and Ohio Power Siting Board (OPSB) timelines baked into the schedule and NPV.

Don’t wait for the next legislative session to shape your future.
Our team monitors these policies, so you don’t have to—we translate them into actionable incentives, cost savings, and site‑selection advantages for growing companies.

If expansion, investment, or job creation is on your horizon, now is the moment to get ahead. 

Position your company to win — not react.

Schedule a confidential strategy session to map which 2026 incentives your business can capture.