Utah Holds the Line on S&T Funding, Offers $100 Million for VC

In these tight state fiscal times, many government functions would view level funding with the previous year as very good news. Since tech-based economic development (TBED) programs are investments toward economic prosperity, conventional wisdom would hold that legislatures would shield these types of investments from deep cuts. The current discussions to eliminate the Colorado Governor's Office of Technology and the entire Texas Department of Commerce, however, suggest that the jury is still out on how future-looking state budgets will be for next year.

Utah's TBED efforts, on the other hand, received encouraging news earlier this week as the Utah State Legislature passed the state's FY 2003-04 appropriations bill. The 17-year-old Centers of Excellence Program secured $2 million, consistent with the current fiscal year's funding level. Funding for other science and technology efforts run by the Department of Community and Economic Development, including the Utah Technology Alliance and the Utah Science Advisor's Office, received an additional $1.2 million.

During the 2002-03 fiscal year, the Utah Centers of Excellence Program supported 15 active centers for use in bringing significant new technologies closer to the marketplace. In addition, the program funded $25,000 in planning grants and a $165,000 commercialization consulting effort.

Utah's Centers of Excellence program has received considerable attention across the TBED community for its unique design and record of success. According to the latest annual report, "the 16 Centers received matching funds of $20.5 million, resulting in a matching fund ratio of 11:1, and (despite the recession) spun out eight new Utah companies. Over the first 16 years of the program, the Centers of Excellence have generated 179 patents, resulting in 204 license agreements, and 150 Utah-based companies have been created to license and market proprietary technology from the program. As of the last audit (2001), those companies directly employed over 1,300 persons in the state, at an average wage of $68,000."

The state legislature also passed the Utah Venture Capital Enhancement Act, which creates the Utah Capital Investment Board and a $100 million five-year fund of funds to encourage more venture capital activity in the state. The act authorizes the organization of the Utah Capital Investment Corporation and provides for the issuance of contingent tax credits to investors in the Utah fund of funds. The act is intended to attract investment in tech firms in fields such as life sciences, advanced manufacturing and information technology sectors.

Governor Mike Leavitt is expected to sign the Act. H.B 240 Substitute is available at: http://www.le.state.ut.us/~2003/htmdoc/hbillhtm/HB0240S1.htm

More information on the Utah Centers of Excellence Program is available at: http://dced.utah.gov/techdev/