$12M SEED Initiative Proposed in Minnesota Supplemental Budget

Aiming to resolve the state’s projected $935 million deficit in its current two-year budget, Gov. Tim Pawlenty introduced a plan that closes Minnesota's budget gap and invests additional funding in rural entrepreneurship and teacher training initiatives for K-12 math and science educators. 
 
Under the governor’s plan, state spending would be cut by $341 million and the state would tap into the budget reserve and surplus funds within the Health Care Access Fund for another $500 million.
 
The fiscal year 2008 supplemental budget recommends $12 million in FY09 for the Strategic Entrepreneurial Economic Development (SEED) initiative, focusing on rural areas of the state by facilitating business development through support of new and existing programs (see the Oct. 3, 2007 issue of the Digest). The following are among the governor’s recommendations for the SEED initiative:

• $2 million for the Minnesota Investment Fund to assist companies in Targeted Rural Opportunity Communities with R&D and technology upgrade expenditures;
• $1.5 million for the Job Skills Partnership initiative reallocating existing surplus funds for training grants to companies located in Targeted Rural Opportunity Communities to upgrade employee skills;
• $600,000 for the proposed Office of Entrepreneurship to share information regarding small business services, policy and strategy;
• $550,000 for the Small Business Development Center to expand consulting opportunities to entrepreneurs;
• $500,000 for Small Business Product Development Grants to provide matching funds to entrepreneurs to access resources at qualified research and education institutions;
• $400,000 for the new Office of Technology Commercialization to provide Small Business Innovation Research (SBIR) support; and,
• $350,000 for Manufacturing Extension Grants for the continuation of the Growth Acceleration Program, which assists companies in implementing new technologies.

Gov. Pawlenty recommends $2.7 million for a two-tier math and science teacher training program in K-12 education. The first tier of the program provides intensive math and science content training for 500 existing teachers annually through a five-day summer institute. The second tier, which was partially funded by the legislature in 2007 (see the June 6, 2007 issue of the Digest), is a “train the trainers” program for math and science teachers to bring new instructional content and strategies to their districts and classrooms. The governor’s recommendation would establish the first tier and increase funding for the second tier.
 
Gov. Pawlenty’s proposal would reduce the Office of Higher Education’s appropriation for administrative expenses by 4 percent each year and reduce Minnesota State Colleges and Universities general fund appropriation by 3.85 percent each year. Universities are directed to reduce administrative costs and reallocate funds as an alternative to increasing tuition.
 
Within the Department of Energy and Natural Resources, the governor recommends reducing by $2.6 million the one-time appropriation from 2007 for the Renewable Hydrogen Initiative. Budget documents state that the governor prefers to focus on projects that may yield benefits in the nearer term, arguing that marketable solutions in hydrogen technology may be years away.
 
Gov. Pawlently’s General Fund Balance Analysis is available at: http://www.budget.state.mn.us/budget/summary/fba/080308_fba_summary.pdf
 
The FY 2008 Supplemental Budget Recommendations are available at: http://www.budget.state.mn.us/budget/operating/200809/supplemental/detail_080308.pdf