Indiana's 21st Century Research & Technology Fund, Tax Credits Survive

A massive state budget deficit, partisan squabbles, and a longstanding need to restructure the state's tax code almost derailed Indiana's largest commitment toward building a technology-based economy. An eleventh-hour compromise in the Indiana General Assembly saved the 21st Century Research and Technology Fund from being eliminated, doubled the state's research and development tax credit to 10 percent, repealed an unpopular apportionment formula in the R&D tax credit, and added a venture capital investment tax credit to the state's portfolio as well.

All is not rosy, however. The 21st Century Fund, which supports large-scale research projects at universities and private industry, did take a deep 40 percent cut and will receive only $15 million each year over the biennium. The program also had $50 million in unspent funding rescinded last fiscal year to help balance the state's $1.3 billion budget deficit.