MI, OH, OK, TN, WI Budgets Highlight Workforce Development, Tax Credits

This week, governors in Michigan, Ohio, Oklahoma, Tennessee, and Wisconsin unveiled their budget proposals. Included in the governors’ recommendations are several cases of agency restructuring and funds for workforce development, innovation tax credits, and other TBED-relevant issues.

Michigan

Gov. Rick Snyder took an unconventional approach to issuing his $54 billion proposed FY2016 budget, releasing overviews on the popular blog-publishing platform Medium.  More than three-fourths of the governor’s proposed total spending is dedicated to education and health and human services. Under the budget recommendation, universities would receive an operations increase of $28 million (2 percent) and would be required to hold any tuition increases to less than 2.8 percent in order to receive new funding. 

For workforce development, Gov. Snyder proposes $17.8 million to better prepare students for colleges and careers by expanding career and technical education programs throughout the state. To encourage more residents to master a skilled trade, Gov. Snyder also proposes a $10 million increase for skilled-trade training programs, bringing total program funding to $20 million.

The Michigan Strategic Fund, which is responsible for economic development, workforce development, and community revitalization across the state, would receive just over $1 billion in FY 2016. Effective March 15, 2015, the Michigan Strategic Fund, the Michigan State Housing Development Authority, and a new Talent Investment Agency, will be absorbed into the newly created Department of Talent and Economic Development per an executive order issued by the governor. To restructure the budget for the new department, Gov. Snyder will release an executive budget revision after the new agency goes into effect. 

Ohio

In his proposed FY 2016-17 biennial budget, Gov. John Kasich proposes $35.3 million in general fund spending in 2016 (a 12.5 percent increase from FY 2015) and $37 billion in general fund spending in FY 2017, with recommendations such as reducing the state’s income tax (including removing it for nearly all self-employed Ohioans), increased funding for both two- and four-year colleges, and a change in the funding formula for K-12 schools. Gov. Kasich’s proposed budget allocates more than $810 million over the biennium in business services spending for the Development Services Agency, which houses JobsOhio, the state’s private, nonprofit organization focused on job attraction and retention, as well as other economic development programs. Within business services, over the biennium Gov. Kasich proposes $20 million (150 percent increase between FY 2015 and FY 2016) for Innovation Ohio, a $20 million dollar (25 percent increase between FY 2015 and FY 2016) increase for Research and Development, and $5.7 million for operations of the Third Frontier Program, virtually unchanged from the previous biennium.  

Oklahoma

As a result of a $300 million shortfall, just five agencies in Gov. Mary Fallin’s FY 2016 proposed budget would receive increased funding, while the other 55 agencies would receive reductions of up to 6.25 percent from the current fiscal year. In the proposed $7.2 billion budget, Gov. Fallin announced the launch of “Oklahoma Works,” a new program that creates partnerships between K-12 schools, career tech, higher education, and local businesses that promote workforce development.  Also included in the budget is $15.7 million for the Oklahoma Center for Advancement of Science and Technology (OCAST), one of the programs and agencies that received a 6.25 percent reduction.

Tennessee

Education is a priority in Gov. Bill Haslam’s proposed $33.3 billion FY 2016 budget, with proposals for a $167 million (3.7 percent) increase for K-12 education and a $61.4 million (3.9 percent) increase for higher education. Launch Tennessee, a statewide organization that promotes innovation and entrepreneurship by supporting research and development activities, would receive $2.8 million from the state during the fiscal year. Within the Department of Economic and Community Development, innovation programs that raise the state’s profile in innovation-based economic development would receive $362,700 in FY 2016 and the TNInvestco tax credit program would receive $30 million to increase the flow of capital for innovative early stage companies headquartered in Tennessee.

Wisconsin

Although Gov. Scott Walker’s proposal to change the funding structure of the University of Wisconsin and the wording of the Wisconsin Idea has received a lion’s share of attention in his proposed $70 billion FY 2015-17 biennial budget, other changes and programs are relevant to the state’s economic development activities.

Gov. Walker proposes the creation of the Forward Wisconsin Development Authority, a merger of the Wisconsin Housing and economic Development Authority (WHEDA) and the Wisconsin Economic Development Corporation (WEDC), and to replace current political office holders on the WEDC board with private sector representatives. Gov. Walker recommends allocating the Forward Wisconsin Development Authority with $55 million to fund the development of a new, regional revolving-fund program that provides targeted, self-sustaining economic development loans across the state.   

Gov. Walker also proposes making reforms to the state’s Angel and Early Stage Seed Investment credits, combining the two funding pools to create a single $30 million pool, increasing the investment threshold for eligible firms from $8 million to $12 million, and expanding the types of eligible activities for firms receiving investment.

For workforce development, Gov. Walker proposes increasing grant funding by $10.4 million for the Wisconsin Fast Forward program, created in 2014 to better train students for high-demand jobs in high-paying fields. Programs eligible for these grants include training and hiring skilled apprentices, local youth apprenticeships, and K-12 schools that work to graduate students with industry-recognized credentials.