PA One Step Closer to Budget Deal; HI, NM, VA Govs Outline Spending Plans

While many states have begun negotiations on budget plans for FY17 and beyond, Pennsylvania has made some progress on FY16 spending. Gov. Tom Wolf signed a partial budget that funded many agencies and programs related to economic development, but that did not include higher education funding and other operations. In the coming months, SSTI will review gubernatorial addresses and budget proposals related to economic development. This week, we highlight developments in Hawaii, New Mexico, Pennsylvania and Virginia.

Hawaii

Gov. David Ige released his $13 billion proposed fiscal year 2017 supplemental budget in late December, building on the biennial budget passed last year. The governor’s office is touting $729 million in infrastructure and economic development spending and another $248 million for education. The boost for infrastructure spending would support improvements to airports in Kona and Honolulu, and the modernization of Honolulu harbor. Most of the new education funding would support capital improvements, but $4 million is provided for the operating costs of the University of Hawaii’s Cancer Center.

The proposed supplemental budget includes $5 million for the Hawaii Strategic Development Corporation Revolving Fund to support the Hawaii Growth Initiative. The initiative is a state equity investment program targeting the state’s innovation economy. The University of Hawaii Hawaii Research and Innovation Initiative would receive $3.5 million and authorization for 20 permanent positions to connect university research to the private sector.

Read the proposed supplemental budget at: http://budget.hawaii.gov/budget/executive-supplemental-budget-fiscal-year-2017/

New Mexico

Gov. Susana Martinez proposed a $6.5 billion budget for fiscal year 2017, an increase of 3.7 percent. Economic development, especially the support of small businesses, was highlighted as a key priority of the budget. This support would come through the $10 million provided for the state’s Job Training Incentive Program, $10 million for a closing fund to help communities attract businesses, and $1.25 million for a new Rapid Workforce Development Fund. The workforce program would fund specialized, rapid training at the state’s community colleges and other higher education institutions. Another $1.5 million would be provided for the state’s Technology Research Collaborative, which connects state universities to federal labs.

Access the proposal at: http://www.governor.state.nm.us/uploads/files/FY%202017%20BUDGET.pdf.

Pennsylvania

Pennsylvania’s FY16 budget negotiations have now entered their seventh month, but some progress has been made. In late December, Gov. Tom Wolf signed a partial state budget, but used his line item veto to remove large sections of the bill approved by the legislature. While the approved budget will deliver relief for local school districts, county governments and many social service providers, funding for universities and many other state-funded institutions and offices will have to be approved through a separate bill.

The budget provides $282.4 million, a 38.4 percent increase, for the Department of Community and Economic Development (DCED). Within the department, $14.5 million in state general funds is appropriated for the Ben Franklin Technology Development Authority, of which at least 80 percent is to be used to fund the Ben Franklin Technology Partners. This is the same level of funding as the previous fiscal year. Another $19 million is also appropriated to the Authority.

DCED’s Pennsylvania First program, which offers capital funding for local job creation projects, is funded at $45 million in general funds, more than double its fiscal year 2015 total. The Partnerships for Regional Economic Performance (PREP) program would receive $11.9 million, level with the previous year. PREP funds a number of local and regional business assistance partners, including the Manufacturing Extension Partnership’s (MEP) Industrial Resource Centers, Small Business Development Centers, Industrial Development Corporations and Local Development Districts.

Access the bill text at: http://www.legis.state.pa.us/cfdocs/billInfo/billInfo.cfm?sYear=2015&sInd=0&body=H&type=B&bn=1460.

Virginia

In mid-December, Gov. Terry McAuliffe unveiled his biennial fiscal year 2016-2018 budget, featuring a billion dollar increase in education spending. The $109 billion proposal includes $252.6 million in general funds for the operating budget of the Office of Commerce and Trade in fiscal year 2017, and $259 million in fiscal year 2018. Total funding for the agency would be $980.9 million in FY17, and $987.7 million in FY18. The Virginia Economic Development Partnership (VEDP) would receive a substantial boost, about 43 percent, with $27.6 million for both years.

Funding for the state’s Center for Innovative Technology (CIT) would stay level. The agency would receive $8.4 million in both fiscal years. The state’s Economic Development Incentive Payments account, which is a holding account for incentive programs administered by VEDP and CIT, would receive $99 million in general funds and $150,000 in other funds in FY17. In FY18, that would shift to $92.2 million from the general state account and $950,000 in nongeneral funds.

Read the proposal at: https://solutions.virginia.gov/pbreports/rdPage.aspx?rdReport=BDOC2016_FrontPage.