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Budget RoundUp: States Seek Modest investments for S&T

January 23, 2013

Governors in several states recently unveiled spending proposals for the upcoming fiscal year or biennium. While fiscal conditions in most states remain fragile, new or continuing investments focused on science, technology and innovation were introduced as pro-growth measures to aid in states' recovery efforts. With the exception of New York Gov. Andrew Cuomo's ambitious economic development plan (see the Jan. 9 issue of the Digest), most of the proposals were on the modest side. They include funding for a life sciences partnership in Indiana, more money for tax credits in Maryland, and additional funds in Nevada and South Dakota for research and commercialization.

With an enviable surplus of around $1.2 billion, Gov. Mike Pence unveiled a budget proposal that places spending priorities on cutting the state's income tax, increasing spending in K-12 and higher education and targeting additional funds toward infrastructure. A major priority of the governor's administration is the proposed 10 percent income tax reduction, which is estimated to cost the state $500 million.

A relatively smaller amount by comparison — $3 million over two years — would be used to create the Indiana Applied Research Enterprise, a partnership with Indiana's life sciences industry and universities to spur innovation, research and entrepreneurial growth. The goal is to promote and incentivize technology commercialization.

A recent article in the Indianapolis Business Review reports the modest appropriation reflects the governor's desire for the institute to seek funding from private companies and industry groups rather than relying on the traditional model of federal grant-seeking.

The FY14 budget outlined by Gov. Martin O'Malley continues to support the state's bioscience investments and proposes new initiatives in cybersecurity and workforce training. Much of the state's innovation efforts are level funded in the budget proposal with the exception of the following: a $2 million boost for biotechnology tax credits to encourage more seed and early stage investment in qualified businesses ($10 million total) and, a $2 million increase, up from $6 million, for the R&D tax credit.

New appropriations include $3 million within the Department of Business and Economic Development for a cybersecurity investment tax credit program. Aimed at attracting private funding for cybersecurity companies, the incentive offers an income tax credit for investment in promising seed and early stage companies. To help prepare workers for jobs in key industry sectors, such as cyber technology, health care and manufacturing, Gov. O'Malley recommends $2.5 million for a new Employment Advancement Right Now (EARN) program. The program would provide funding for workforce training collaborations between business, government and nonprofit organizations.

Funding for the Maryland Technology Development Corporation (TEDCO) is $18.6 million in the executive budget, the same as last year. From this amount, $10.4 million is for the Stem Cell Research Fund and $3.2 million is for technology development, transfer and commercialization. TEDCO also administers the Maryland Innovation Initiative, a fund established last year to promote commercialization of university research, encourage universities to partner with federal labs, and facilitate tech transfer from universities to commercial industries. The budget provides $5 million for the initiative, the same as last year. Earlier this month, TEDCO announced a restructuring of its grant programs with a focus on better supporting entrepreneurship and innovation.

Gov. O'Malley's FY14 budget documents are available at: http://www.governor.maryland.gov/BudgetFY2014.asp.

Gov. Brian Sandoval is recommending $10 million ($5 million each year) for the Knowledge Fund, established in 2011 to spur research and technology commercialization. The funding is included in the 2013-15 biennial budget for the Governor's Office of Economic Development. An appropriation of $8 million each fiscal year was provided in the previous biennial budget for the fund through an annual transfer from the operating budgets of the University of Nevada-Reno, the University of Nevada-Las Vegas, and the Desert Research Institute.

South Dakota
As part of the mid-year adjustments to the current FY13 budget, Gov. Dennis Daugaard is asking lawmakers to approve $500,000 to initiate a proof-of-concept program administered by the Board of Regents and the Governor's Office of Economic Development. Through the program, grants of $50,000 would be available for investments in research coming out of the universities thought to be commercially viable.

The governor's proposed budget for FY14 would provide $2 million in one-time funds to create a Ph.D. program in physics at the state's universities to support research at the Sanford Underground Lab at Homestake. Another $2 million would be used to restore infrastructure at the lab. The lab was established in 2007 as a National Science Foundation research priority for scientific discovery in geophysics (see the July 18, 2007 issue of the Digest).

View the FY14 budget proposal: http://bfm.sd.gov/budget/rec14/SD_Rec_2014_Entire.pdf.

Indiana, Maryland, Nevada, South Dakotastate budget, k-12, tax credits, bio, workforce