Texas shifts to Democratic control, prompting questions for businesses

Gina Hinojosa defeated Governor Greg Abbott, ending his bid for a fourth term, while James Talerico ousted Attorney General Ken Paxton in a landslide victory. While the state senate remains under Republican control, the results for several state house seats are still pending.

Over the past seven years, more than 200 companies have relocated their headquarters to Texas, drawn by Republican-led policies including corporate tax incentives. However, Hinojosa has indicated a desire to reassess these incentives, stating in an October interview with Kut News, a Texas NPR affiliate, that she believes the state should “wipe clean corporate welfare.”

Tech entrepreneur Jason Calacanis expressed surprise at the election results, stating on X, “I never expected Texas to turn blue. I moved here to get away from the left lunacy!”

Texas currently has no income tax for individuals or corporations, although a franchise tax applies to companies exceeding $1 million in revenue. Abbott has previously signed legislation expanding exemptions from this tax. Hinojosa’s campaign focused criticism on tax incentives, particularly those benefiting data centers.

Some of the prominent companies that have moved to Texas include SpaceX, Samsung Electronics America, Six Flags Entertainment Corporation, Devon Energy, KFC Corporation, Realtor.com, Chevron, Gordon Ramsay North America, Lion Real Estate Group, QSAM Biosciences Inc., Tesla, X, AESOM, Charles Schwab, Joe Rogan Experience, European Wax Center, Pabst Brewing Company, Optym, Oracle, Cicero Institute, 8VC, and SpaceX.

Hinojosa and Talerico celebrated their wins at a Whataburger on Tuesday night, while business leaders are now evaluating the future of the economic factors that initially attracted them to the state.