State budgets reviewed for TBED initiatives: AZ, GA, IA, IN, UT, VA

SSTI has analyzed more recently released state budgets for TBED-related initiatives, and this week we present findings from our review of AZ, GA, IA, IN, UT and VA.   

Arizona

Arizona Gov. Doug Ducey’s proposed $9.8 billion FY 2018 budget would support R&D infrastructure at the state’s three public universities (University of Arizona, Arizona State University, and Northern Arizona University) through the newly-announced University Capital Investment Program. This program would enable universities to use the transaction privilege tax revenues that they generate for as much as $1 billion in bonding for new research and development infrastructure, including deferred maintenance projects.

Education is a major emphasis of the governor’s proposed budget, and while the majority of funds go toward teachers and schools more broadly, Ducey also proposes $5 million in new investments to help connect rural schools to high-speed internet, as well as $200,000 to support a new statewide computer science and coding initiative.

The Arizona Commerce Authority (ACA), the state’s main economic development arm, would receive $54,969,000 under the proposed budget, a decrease of 1.5 percent ($0.827 million). Within the ACA, the Arizona Innovation Accelerator Fund would receive $164,100, unchanged from the previous fiscal year.

Georgia

Governor Nathan Deal’s proposed FY 2018 budget includes a significant increase for the state’s HOPE Scholarship program, new bond funding for the Georgia Research Alliance and stable funding for Georgia Tech’s Enterprise Innovation Institute. The HOPE Scholarship and Zell Miller Scholarship program would see an increase in their budget of $50 million from $715 million in FY 2017 to $766 million in FY 2018; the HOPE Scholarship program provides tuition assistance for students that graduated from high school with at least a 3.0 GPA, while Zell Miller recipients must graduate with a minimum 3.7 GPA and a minimum 1200 SAT score on the math and reading portions or a minimum 26 on the ACT.

The Georgia Research Alliance would see its state funding increase to $10.1 million in FY 2018, up from $5.1 million in FY 2017 as the result of proposed $5 million in general obligation bonds for equipment purchase and R&D infrastructure.

The Enterprise Innovation Institute (EI²) at Georgia Tech provides business and industry assistance, technology commercialization, and economic development. Among its services are the Georgia MEP and the Advanced Technology Development Center. EI² would see its general fund budget increase from $19.3 million in FY 2017 to $19.5 million in FY 2018 under the governor’s budget proposal.

Indiana

While Indiana Gov. Eric Holcomb’s proposed FY 2018-2020 $31.8 billion biennial budget emphasizes K-12 education, technology-based economic development causes would also receive considerable support. The Indiana Economic Development Corporation (IEDC) would receive $188.9 million over the biennium – an increase of approximately 14.6 percent.

Under the proposed budget, IEDC’s innovation and entrepreneurship programming would receive $10 million in new funding for each year of the biennium. The pre-existing Indiana 21^st Century Research and Technology Fund would receive $30 million in both FY 2017 and FY 2018, a 2 percent increase from FY 2016. Additionally, the Indiana Biosciences Research Institute would receive $20 million in FY 2018, while the state’s Regional Cities initiative would receive $4 million in that same year. The Office of Defense Development would receive $628,060 in each year of the biennium, a 1.3 percent increase.

Around education, the budget would allocate $1 million per year for coordinating science, technology, engineering and math programs across the state. The budget would also allocate $1 million per year to help school districts across the state increase internet access, with the possibility of federal matching grants.

Iowa

Iowa is reprioritizing innovation spending and addressing $110 million in budget cuts due to lower than anticipated revenues. The FY 2018-2019 budget therefore presents many changes to the state’s investments. The Economic Development Authority is receiving a 7 percent increase in state appropriations, but a decrease in reserves leaves an anticipated $56 million reduction in state aid spending over the biennium. Funds available for awards through the Innovation and Commercialization program are being reduced by nearly 50 percent (state aid expenditures – FY 2017: $11.5 million, FY 2018-2019: $6.6 million). Funding to the Board of Regents for several research centers is being cut, but accounts for economic development at Iowa State University (FY 2017-2019: $2.4 million), University of Iowa (FY 2017-2019: $209,279) and University of Northern Iowa (FY 2017-2019: $1.1 million) are flat. The state is also investing maintaining funding for the John Pappajohn Entrepreneurial Center at UI (FY 2017-2019: $2 million) and Regents Innovation, while adding more than $42 million for new Biosciences and Student Innovation centers. Gov. Terry Branstad, who is expected to resign soon to become the U.S. ambassador to China, is promoting increased investments in STEM initiatives that will start in FY 2019, including a Computer Science Professional Development Incentive fund ($500,000) and Future Ready Iowa Alliance ($10 million).

Utah

USTAR, the state’s primary tech-based economic development program, would see a modest increase in its budget under the Governor’s proposal from $22.146 million in FY 2017 to $22.197 million in FY 2018. The organization accomplishes its mission through programs and services focused in three areas:  principal researchers, competitive grant programs, and technology entrepreneurship services.

Virginia

Facing a budget gap of over $1.2 billion for FY 2017 due to lower-than-expected income and sales tax collections, Virginia Gov. Terry McAuliffe released his Executive Amendments to the 2016-2018 biennial budget. The budget calls for a cut in funding to the Virginia Economic Development Partnership (VEDP) in both FY 2017 and FY 2018. In FY 2017, VEDP would receive $25.5 million (a decrease of $1.3 million; 5.2 percent from the proposed appropriated amount). In FY 2018, VEDP would receive $19.2 million – a decrease of $8.1 million (29.6 percent) from the proposed appropriation. The majority of the decrease in FY 2018 funding would be transferred to the newly established Virginia International Trade Corporation (VITC) for the promotion of international trade in Virginia. Other potential VEDP budget reductions for FY 2018 include a $75,000 reduction in pass-through funding for the Commonwealth Center for Advanced Manufacturing.

Other funding for tech-based economic development efforts include:

• $1 million for the New Economy Workforce Credential Grant Program launched in 2016 to support students pursuing credentials and certifications for high demand jobs; and,
• $7.2 million to VITC in FY 2018 – approximately $6.2 million of that total would be from a transfer of already appropriated funds for FY 2018 funds from VEDP (see above).

The proposed budget also would eliminate approximately $326,000 in funding for the Integrated Systems Test Facility at the Center for Advanced Engineering and Research within the Office of Commerce and Trade.