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AZ, MT, NE state budgets see some funding increase for innovation

May 18, 2017

SSTI continues its reporting on actions taken by state legislatures to invest in economic growth through science, technology, innovation and entrepreneurship. This week, we look at the budgets passed and signed by governors in Arizona, where R&D infrastructure will get a boost at the state’s public universities, Montana, which will see an increase in funding for some higher education research facilities, and Nebraska, where the state maintained the amount authorized for funding to small businesses for commercialization activities.


Notably, Arizona Gov. Doug Ducey signed HB2547, a bill that provides $27 million in funding to support R&D infrastructure at the state’s three public universities (University of Arizona, Arizona State University, and Northern Arizona University) through the University Capital Investment Program. This program enables universities to use their generated transaction privilege tax revenues for as much as $1 billion in bonding for new research and development infrastructure, including deferred maintenance projects.

Additionally, general fund commitments as part of the state’s $9.8 billion FY2018 budget include:

  • $3 million in new investments to help connect rural schools to high-speed internet;
  • $200,000 to support a new statewide computer science and coding initiative; and,
  • $21.5 million (no change from FY 2017) for the Arizona Commerce Authority, the state’s main economic development organization. 


Gov. Steve Bullock recently signed Montana’s FY 2018-2019 biennial budget, which makes several programmatic changes to Department of Commerce spending. The state’s SBIR/STTR matching funds program received level funding of $375,000 per fiscal year, and Manufacturing Extension Service was also level at $100,000 per year. New funding of $200,000 per year is being appropriated to both the Manufacturing Extension Center and to Montana State University’s Northern Advanced Biofuel Center. These new appropriations are partially offset by the end of funding to “enhance economic development in Montana” ($275,000 in FY 2016-2017).

Montana’s budget also increased funding for the Commissioner of Higher Education’s R&D agencies to $56.1 million across FY 2018-2019 ($54.2 million in FY 2016-2017). This funding supports a variety of research facilities across the state.


Several months of declining tax revenues influenced Gov. Pete Ricketts’ action on the budget, including $56.5 million of line items vetoes to the state’s $8.9 billion FY 17-19 biennial budget. The final signed document includes:

  • The Department of Economic Development may spend up to $4 million per year (level with the previous budget, although a minimum spending level of $2 million was removed) to provide matching grants up to $500,000 each to small businesses for the commercialization of new products or processes.  “To carry out this section, the department shall contract with one statewide venture development organization that” is a Nebraska-incorporated 501(c)(3) nonprofit organization.
  • The Department of Economic Development also may spend up to $2 million for a small business investment program to facilitate access to microloans for microenterprise growth and low-income based entrepreneurship.
  • The University of Nebraska may spend $11,719,478 each year of the biennium for targeted research purposes. The state’s EPSCOR contribution of $315,291 annually is included in the amount.
  • The budget reduces by $7.0 million the portion of the state cigarette tax that the postsecondary educational institutions with medical schools may spend on research on cancer and smoking-related diseases.


Arizona, Montana, Nebraskastate budgets