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Budget Update: Education Spending Vetoed in IA, Stable in CA, OH

July 23, 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 California, Iowa, Ohio and New Jersey.

On June 24, Gov. Jerry Brown signed a FY16 budget package that includes $115.4 billion in general fund spending. The final budget includes $49.4 billion in general funds for K-12 education, $14.2 for higher education and $214 million for labor and workforce development. Within the higher education allocation, there is $29.1 million in new funding for community college apprenticeship programs, including $14.1 million to expand current programs and $15 million for apprenticeship-demonstration projects in emerging industries.

In early July, Gov. Terry Branstad approved $7.2 billion in general fund spending, but vetoed more than $55.7 million in K-12 education spending and $6.4 million for community colleges and state universities. The economic development budget (SF 499) includes $15.5 million from the general fund for the Economic Development Authority. Additional funds are available through the Iowa Skilled Worker and Job Creation fund for specific projects at the Economic Development Authority ($16.9 million), the State Board of Regents ($3 million), regents institutions ($5.6 million) and the Department of Workforce Development ($100,000).

New Jersey
Gov. Chris Christie signed a $33.8 billion FY16 budget (S2016) for FY16. The budget includes $11.7 million for Economic Redevelopment and Growth Grants through the New Jersey Economic Development Authority and $207,000 for the Fort Monmouth Economic Revitalization Authority.

Gov. John Kasich signed a $130.3 billion biennial budget bill (HB 64) that features reductions in personal income taxes and taxes on small businesses. The current 75 percent tax cut for small businesses earning under $250,000 will continue in FY16, and be eliminated in FY17. A new flat tax of 3 percent is implemented for small businesses with higher revenues.

Over the two fiscal years covered by the budget, a total of about $2.5 billion is allocated to the state's Development Services Agency. This allocation includes $325.8 million for the operation, research projects and internship program of Ohio Third Frontier. Additional support for Third Frontier will derive through the Development Services Agency's Technology Programs and Grants allocation, which also supports the Thomas Edison program and other technology-related services for manufacturers and businesses. A total of $29 million is available over the biennium for these expenses.

The agency's Capital Access Loan program is funded at $6 million for FY 2016-17. The Innovation Ohio Loan Fund is allocated $20 million, and another $20 million is provided for research and development loans.

California, Iowa, New Jersey, Ohiostate budget