The most consequential fact in Fortune editor Ruth Umoh's new analysis of CEO ultimatums is easy to miss. Executives used to make relocation threats behind closed doors. Now they make them in public. Umoh's October/November 2026 magazine feature, published September 30, describes a pattern in which chief executives tie jobs, headquarters and billions of dollars in planned investment to the decisions of state and city governments. Her examples include Paramount Skydance's confrontation with California over its Warner Bros. Discovery deal, Citadel's spat with New York City Mayor Zohran Mamdani over a proposed pied-à-terre tax, and the earlier moves by SpaceX, X, Chevron and Oracle to Texas.

Most coverage asks who wins the standoff, the CEO or the governor. A more useful question for anyone who manages public money is who holds the risk after the headlines fade. The answer is usually a municipality: the city, county or school district that has to keep paying its bills while its largest taxpayer or employer decides whether to stay.

The Threat Is Aimed at the State, but the Fiscal Damage Lands Locally

Relocation ultimatums are usually framed as contests between a company and a governor or attorney general. The financial consequences are spread across a wider set of governments. A headquarters supports a local property tax base, a stream of sales tax receipts from workers' spending, and in many jurisdictions payroll or business-license revenue. It also generates indirect demand for housing, retail, contractors and services.

Municipal budgets are built on the assumption that this activity is stable. Debt service, pension contributions, public-safety payrolls and school operating costs are fixed or slow-moving obligations. Revenue is treated as a smooth forecast. A credible relocation threat turns that forecast into a contingent liability. The city has not lost anything yet, but its finance office can no longer treat the revenue as certain.

The asymmetry matters. For a company, making a threat costs little, and if it is never carried out, nothing has been spent. The municipality, by contrast, has to decide whether to hold back spending, build reserves or concede something, all before any job has moved. Uncertainty itself has a price, and the party that did not create it pays it.

The Multiplier Math Nobody Puts in the Budget

Umoh's piece relies on research by Enrico Moretti, an economist at the University of California, Berkeley, who studies how companies and workers choose where to locate. He is direct about where the leverage comes from: “If they have an option to move, that means that they have leverage.” The same research shows how far a single decision can spread. According to Fortune's account, when a traditional manufacturer moves or closes a plant, each lost job costs the surrounding community roughly another 1.6 jobs. In high-paying fields such as technology, Moretti puts the figure at four to five additional local jobs for every job lost at the company itself.

Applying those multipliers to the 5,000-job scenario Fortune uses shows the scale. The following is simple arithmetic on Moretti's ratios, not a forecast for any particular place:

• A 5,000-job manufacturing departure implies about 8,000 additional local job losses (5,000 × 1.6).
• A 5,000-job technology departure implies roughly 20,000 to 25,000 additional local job losses (5,000 × 4 to 5,000 × 5).

Each of those secondary jobs supports its own share of local revenue. That includes property taxes on the homes workers can no longer afford, sales taxes on spending that dries up, and commercial rents that fall as demand for space weakens. The city's exposure is therefore many times the size of the company's own tax bill. A finance director who looks only at what the firm pays directly will understate the risk by a wide margin.

The Incentive Trap: Paying Twice for the Same Jobs

The second hidden layer is how this leverage was created. Fortune quotes Jo-Ellen Pozner, an associate professor at Santa Clara University's Leavey School of Business, who describes the behavior as “learned behavior.” Governments have spent decades competing for headquarters and factories with subsidies, tax credits and regulatory concessions. If a state will pay to bring in 5,000 jobs, the threat to remove 5,000 jobs becomes a negotiating asset. Pozner also describes the change in tone, from an older set of unwritten conventions to what she calls bully politics.

The scale of local giveaways is easy to underestimate. In its second-quarter 2025 update, Good Jobs First reported adding 5,967 subsidy awards to its Subsidy Tracker database, totaling $4.7 billion. The largest single award in that batch was a $187 million property tax abatement granted by Hendricks County, Indiana. The organization put the trade-off plainly: while corporations collect tax breaks, “communities lose out on revenue for schools, infrastructure, and essential public services.”

The same update highlights a useful accounting development. A relatively new rule, Governmental Accounting Standards Board Statement 77, requires local governments to report the revenue they lose to tax abatements in their annual financial reports. That gives analysts a way to see how much of a jurisdiction's tax base has already been pledged away. It exposes a paradox. A city that has already abated much of a major employer's property taxes has less left to lose if the employer leaves. But it also has less room to make a second concession when the same employer demands another, and it has often taken on public costs (roads, utilities, workforce programs) that were justified by the original deal.

This is the trap. Municipalities pay once for the jobs through incentives and pay again when the company uses the threat of leaving to renegotiate. Good Jobs First has long argued that clawback provisions, which require companies to return subsidies if they miss job or investment targets, are the standard protection. It has also noted that governments too often take a good-faith approach and let companies off the hook when they fall short. Without enforceable recapture terms, a municipality has nothing to enforce when the relocation threat arrives.

How Credit Analysts Read Concentration Risk

Bond markets already have a vocabulary for this exposure, and it is not a comfortable one. In its July 2024 methodology for rating U.S. cities and counties, Moody's Ratings treats economic concentration as a distinct credit consideration. It explains that cities and counties relying heavily on a single taxpayer or employer are vulnerable, and that losses can be sudden, for example when “a large local employer closes on short notice.” Moody's scorecards have also historically given the economy and tax base factor about 30% of the weight in a general obligation rating.

For a municipality, the implication is that a public relocation fight is not only a political drama. It is information that rating analysts and bond investors will price. A city that is visibly dependent on one firm, and whose governor or mayor is in an open dispute with that firm, presents a different risk profile than the same city in a quiet year. Even large, diversified issuers are not immune to the broader climate. In April 2026, Moody's assigned an Aa2 rating with a negative outlook to New York City's $2.3 billion taxable general obligation bonds, citing the city's very large and diverse economy as a core strength while also flagging structural budget imbalances. That is a reminder that scale buys resilience but does not remove the need for a plan.

Smaller jurisdictions have less cushion. The cities most likely to be squeezed are those with a single dominant campus, a specialized industry cluster, or a large plant, precisely the places where the company's exit option is most credible in the first place.

Stickiness Is the Municipality's Real Asset

Not every threat is equally credible, and the distinction gives cities a way to gauge their real exposure. Fortune's reporting draws on Moretti's idea of “stickier” companies, those whose value depends on an industry cluster that cannot be moved. A film studio can relocate its headquarters but not a century-old production ecosystem. A financial firm that leaves New York gives up proximity to capital and clients. An AI company would struggle to replicate Silicon Valley's talent pool elsewhere. Relocating skilled workers is also hard, because spouses' careers, children's schools and aging parents anchor people in place.

This suggests a practical way to sort risk. Manufacturers and back-office operations, which can chase cheaper land and labor, present the most credible threats. Cluster-dependent firms present threats that are often more rhetorical than real, though partial moves, such as shifting new hiring or a planned expansion, can still cut into future revenue growth. The Citadel episode fits that pattern. The company signaled it might redirect job growth to Miami but ultimately recommitted to the Manhattan redevelopment it had questioned.

Threats That Fizzle Still Leave a Bill

A tempting conclusion is that when a company stays, the city has lost nothing. That is not accurate, for three reasons.

First, concessions have costs. A settlement, a delayed tax, a softened regulation or a fresh abatement given to end a standoff is a real reduction in future revenue, even if no one leaves.

Second, some threats are carried out, and the historical record shows the losses can be concrete. Disney scrapped a planned Florida campus in 2023 that would have brought roughly $1 billion in investment and 2,000 jobs. In 2015, Angie's List halted a $40 million Indianapolis headquarters expansion. In 2016, PayPal canceled a planned 400-job operations center in Charlotte and Deutsche Bank froze 250 planned jobs in North Carolina, after the state enacted a controversial law. Those projects never appeared on a city's revenue base, but budgets and infrastructure plans had often been built around them.

Third, workers absorb the uncertainty. Pozner notes that even when a company stays, employees can leave a public fight feeling that their careers were used as chips in a dispute that had little to do with them. That erodes loyalty and can weaken the workforce that made the location valuable in the first place.

A Practical Playbook for Local Finance Offices

None of this requires municipalities to become adversarial toward business. It requires them to treat corporate location risk as a measurable budget item rather than a political surprise. Several steps follow from the evidence above.

• Map concentration. Identify the share of property tax, sales tax and payroll-linked revenue tied to the top employers and taxpayers, and apply the Moretti multipliers to estimate indirect exposure. A 1.6× or 4-to-5× multiplier belongs in the stress test.
• Set a trigger-based reserve. Tie a contingency reserve to the level of dependence on a small number of firms, and define in advance which public disputes or announcements would prompt a review.
• Audit existing deals. Use the abatement disclosures now required under GASB 77 to see what has already been given away, and check whether each agreement has enforceable clawbacks, job floors and repayment terms.
• Avoid duplicate concessions. Require that any new incentive replace, not stack on top of, prior commitments, and tie payments to verified outcomes over time rather than to announcements.
• Pursue anti-raiding pacts. Good Jobs First has promoted agreements among neighboring jurisdictions to stop subsidizing companies to move existing jobs across borders, which reduces the bidding-war dynamic that feeds the leverage in the first place.
• Communicate with creditors early. Given how rating agencies treat concentration, proactive disclosure of a diversification plan is better than letting a headline set the narrative.

The deeper lesson of this year's standoffs is structural. As Fortune's reporting makes clear, both sides in these confrontations often have reasons to avoid following through, because each needs the other. But a municipality cannot count on that restraint. It has to plan as if the threat might be real while negotiating as if it might not be, and that requires putting a number on the risk before the ultimatum arrives.