Budget Update: Economic Development Remains Priority Despite Contentious Debates in Many States

July 16, 2015

Now that many governors have signed spending bills and legislative sessions are drawing to a close, the SSTI Digest will check on the status of proposals related to the innovation economy, and examine the state of technology-based economic development funding in the states. This week, we review spending bills in Alaska, Connecticut, Louisiana, South Carolina and Vermont.

Alaska
On June 30, following a second special legislative session, Gov. Bill Walker signed a $9.8 billion (HB 2001) FY16 budget. The governor, however, vetoed $200 million in tax credits, which will delay payment to the state's oil and gas companies.

The budget allocates $5.2 million for Community and Regional Affairs and $1.6 million for Economic Development. The campuses of the University of Alaska are slated to receive $247.5 million, with $785,900 for its Small Business Development Center.

Connecticut
Gov. Dannel P. Malloy signed a $40 billion biennial state budget (HB 7061) on June 30. The final bill rescinded and adjusted several business taxes that had been either passed or proposed earlier in the legislative session, according to the Hartford Courant. Initial funding for the governor's 30-year, $100 billion transportation initiative, however, survived.

The state's Department of Economic and Community Development is slated to receive $39.7 million in FY 2015-16 and $40.1 million in FY 2016-17. This figure includes $311,608 over the biennium for the Hydrogen/Fuel Cell Economy program, $689,268 for the Small Business Incubator Program, $1.7 million for the CCAT-CT Manufacturing Supply Chain initiative, and $998,779 for the CONNSTEP manufacturing improvement program.

Louisiana
Gov. Bobby Jindal signed off on a $24.6 billion spending package for FY16 on June 19. The operating budget (HB 1) allocated $20 million for the Department of Economic Development Office of the Secretary and $20.8 million for the Department's Office of Business Development. The Office of Business Development provides funding for the Louisiana Economic Development Regional Awards and Matching Grant program. The budget stipulates that funding for that program is to be no less than last year. Another $300,000 will be available for the Business Development Program for economic development projects in communities affected by military base closures.

The State Board of Regents will receive $1 billion, with specific allocations for a few of its higher education programs. About $4.6 million will be available for the state's R&D grant program, $4.1 million for Recruitment of Superior Graduate Fellows, and $2 million for the endowment of chairs.

South Carolina
Gov. Nikki Haley signed a $7 billion FY16 budget (H 3701) on June 29 after vetoing $30 million in spending. The lengthy list of vetoed projects included new faculty positions at Clemson University, support for the University Center of Greenville consortium, investment in Community Development Corporations and a number of local economic development projects. All of these vetoes, with the exception of the Community Development Corporation spending, however were overridden.

The budget allocates $5 million through the Department of Commerce for the state's regional economic development organizations. Under this allocation, the Upstate Alliance would receive $750,000, the Center SC Economic Development Alliance $750,000, the North Eastern Strategic Alliance $745,000, the Charleston Regional Development Alliance $660,000, the I-77 Alliance $600,000, the Economic Development Partnership (Aiken) $450,000, the Southern Carolina Alliance $460,000 and the LINK Economic Alliance $385,000.

The Manufacturing Extension Partnership will receive $932,049 and $219,000 is provided for Innovation/Emerging Industries support under the Department of Commerce.

Vermont
Gov. Pete Shumlin signed an FY16 budget (H 490) that provides $58 million for commerce and community development, including $6.2 million for economic development. About $428,000 will be available for the Vermont Manufacturing Extension Center.

Partial funding is also provided for a new, $25 million Vermont Agriculture and Environmental Lab, along with $1 million to improve laboratories at Vermont Tech.

An economic development bill (S 138) signed along with the budget will streamline the Vermont Economic Growth Incentive program to make it easier for businesses in high unemployment areas to receive loans. The bill would also promote lending to startups by increasing the limits on non-licensed lending.

Alaska, Connecticut, Louisiana, South Carolina, Vermontstate budget