Indiana Governor Signs Budget Bill to Energize State's Economy

During a legislative season that was marked by heated discussions in most statehouses on what to cut or save, Indiana is one of a handful of states so far that focused considerable debate on planting the seeds for a stronger future through technology-based economic development. The compromise crafted between Democratic Governor Frank O'Bannon – who started the discussion when he outlined his Energize Indiana initiative in his State of the State Address – a Republican controlled Senate with a countering JOBZ proposal, and an independent minded House (controlled by the Democrats) positions the Hoosier State among the leaders for promoting a technology-based economy.

The state's research and technology community, catalyzed by recissions and cuts in the FY 2003 budget, played a significant and vocal role in pushing for a more comprehensive portfolio of programs and credits for the next biennium.

The two-year budget bill recently signed by Gov. O'Bannon includes $75 million for research and development (R&D), $9 million for technology parks and $50 million for venture capital tax credits, among other initiatives. HB 1001 passed with bipartisan support among the state's General Assembly, being approved by the State House, 61-37, and the State Senate, 34-16. Highlights of the bill are:

• $75 million for the 21st Century Research and Technology Fund, which serves to stimulate the development and commercialization of advanced technologies in Indiana. The fund's activities had been put on hold in FY03 as the state worked to resolve its budget shortfall.
• $50 million over five years for tax credits to promote Indiana venture capital initiatives. In addition, the budget extends the state's R&D tax credit of 10 percent until 2013.
• $10 million to expand the I-Light fiber optic network that presently includes Indiana University at Bloomington, IUPUI and Purdue University at West Lafayette.
• $9 million for certified technology parks.
• $4.2 million for rural development, including telecommunications and workforce development needs. The bill provides that the Indiana Rural Development Council will administer a Rural Development Administration Fund meant "to create, assess and assist a pilot project to enhance the economic and community development in a rural area." A 16-member advisory board will oversee all expenditures.
• Funding for $344 million in university construction projects, including several research facilities.

Governor O'Bannon's plan is intended to create high-wage, high-skill jobs in the advanced manufacturing, information technology, high-tech distribution and life sciences industries. While the governor's original 10-year job creation plan would not have used state tax money, Energize Indiana, as passed by the General Assembly, will be paid for through a combination of General Fund, tobacco settlement fund and federal economic stimulus dollars.

HB 1001 is available at http://www.IN.gov/legislative/bills/2003/EH/EH1001.3.html. More information on Energize Indiana is available at: http://www.in.gov/gov/energize/index.html