Arkansas Task Force Recommends State Investments in Tech Companies, Co-locating Economic Development Agencies

The final report of the Task Force for the 21st Century released its recommendations to Gov. Mike Beebe and the legislature last month, which complement the 2008 Accelerate Arkansas strategic plan.

Pointing to neighboring state Oklahoma, which recently elected to use equity investment as a tool to provide seed capital for tech-based firms, the report cites examples of how removing the state's constitutional restraints can provide the state a more active role in economic development and generate significant economic returns, specifically in attracting and retaining high-wage jobs.  
 
The task force also responded to the organizational structure necessary for an efficient and effective 21st century state economic development system. While they do not recommend consolidating economic development functions at this time, they suggest housing the state's three primary economic development agencies - the Arkansas Development Finance Authority, the Arkansas Economic Development Commission, and the Arkansas Science and Technology Authority - within one location.  Additionally, the state should create an economic development plan that has input from and involves all of these agencies, the task force finds.

Gov. Beebe unveiled his fiscal year 2009-11 budget recommendations last week, which includes $9.6 million in FY09-10 and $9.4 million in FY10-11 for the Arkansas Science and Technology Authority - slightly below the base level funding of $9.7 million and $9.8 million, respectively. The governor recommends base level funding of $1.9 million each year for the Seed Capital Investment program, which provides up to $500,000 in capitalization for tech-based companies. This was one of several TBED initiatives to receive additional funds in the last biennium (see the April 9, 2007 issue of the Digest). Gov. Beebe also recommended base level funding of $257,182 each year for the Arkansas Manufacturing Extension Network.

The governor included $2 million in 2009-10 for Research Development Program Grants within the higher education budget - up from $1 million in 2007-08. This program provides funding to institutions of higher education for development of scientific research.

Although the governor presented funding recommendations for the next two years, the legislature is required to return in 2010 to vote on the budget in accordance with the recently approved voter referendum that requires annual legislative sessions for budget approval (see the Nov. 5, 2008) issue of the Digest).