SSTI Digest

With the number of startups on the rise, several states and cities are reaching out to entrepreneurs to connect them with the assistance and capital they need to survive.

The third installment of SSTI's Tech Talkin' Govs' series includes excerpts from speeches delivered in Colorado, Georgia, Nebraska, and South Dakota. The first and second installments are available in the Jan. 5 and Jan. 12 editions of the Digest.

Climbing back from a deep recession without over burdening taxpayers is a main focus of this year's legislative session for many states, leaving little room for bold initiatives needed to position state and regional economies for future growth. Nebraska Gov. Dave Heineman, however, is asking lawmakers to look beyond the state's current conditions and invest in economic sectors he says are likely to create high-quality jobs and enhance the state's "economic momentum."

Two measures, one dealing with improving access to higher education in Alaska, and another focusing on economic growth through renewable energy in Nebraska, recently were approved as part of the 2010 legislative sessions. Lawmakers in Alaska passed a measure establishing a merit-based scholarship program championed by Gov. Sean Parnell, but left funding for the program uncertain. Meanwhile, Nebraska legislators passed a bill to promote economic growth through renewable energy export.

A bill being debated in Congress would provide federal support for the development of research parks, a major contributor to scientific discovery, technology commercialization and new company formation. S. 583, entitled the Building A Stronger America Act and introduced earlier this year, would make available grants and loan guarantees for the development and construction of science parks to promote the clustering of innovation through high technology activities. The Senate Committee on Commerce, Science and Transportation will hear testimony today in support of the legislation from Brian Darmody, President of the Association of University Research Parks and Charles Wessner of the National Research Council. Over the past few months, several announcements for development of new research parks have been made from around the world. Following is an overview of select announcements.

During the last week of the legislative session, Nebraska Gov. Dave Heineman signed two bills into law - one dealing with R&D tax credits and the other authorizing the development of a statewide biotechnology strategic plan. The biotech plan, as outlined in LB 246, calls for the creation of a nonprofit corporation to provide research assistance and recommendations to the Legislature's Natural Resources Committee by June 30 of next year. A finalized plan must then be presented by the committee to the Legislature.

Urban universities often have to cope with issues of land scarcity unique to their high density settings. In many cases, it’s because of their own success as an attractive magnet for other activities. The result? Major expansions can take years of negotiation and planning – and top dollar – to accomplish. In addition, tensions with neighbors and community sometimes arise over new development or incompatible land use. Some municipalities may struggle in a love-hate relationship with the colleges, welcoming the above-average wages of academic employment and accompanying economic growth, yet fretting over losing tax base as schools acquire more land.

A growing number of state governments face revenue uncertainties in the near future. More than half now expect budget deficits and shortfalls in the upcoming fiscal year and beyond. Despite the bleak outlook, however, legislators nationwide are continuing to invest in science and technology with many lawmakers projecting high returns to their state in the coming years. Following are highlights of TBED investments and reductions in recently approved budgets in Kentucky, Maine and Nebraska.
 
Kentucky
Recognizing the statewide economic benefits of strategic investments in university research, Kentucky legislators concurred with Gov. Steve Beshear’s proposal to continue support for the Bucks for Brains initiative. Lawmakers approved $60 million in bonds under the fiscal year 2008-10 biennial budget agreement to expand the state’s endowment matching program used to attract high-quality researchers. 
 
The total funds appropriation under the budget agreement for the Economic Development Cabinet is $29.3 million in FY 2008-09 and $31.8 million in FY 2009-10. The budget agreement also includes language directing interest income earned on the balances in the High Tech Construction/Investment Pool and loan repayments received to be used to support the Department for Commercialization and Innovation. The approved Capital budget provides another $20 million for the Economic Development Cabinet for projects and loans approved by the Kentucky Development Finance Authority.
 
Gov. Beshear vetoed $1.2 million each fiscal year in New Economy Funds from the High-Tech Investment Pool to administer the ConnectKentucky program, a statewide broadband initiative. The governor expressed support for the initiative in his veto message but objected to the lack of oversight in spending for the program. Instead, he directed the Cabinet for Economic Development to structure a funding plan and identify program needs for the continuation of the initiative.
 
The Office of Energy Policy would receive $13.4 million over the biennium under the budget agreement, with $3.5 million each fiscal year for the Energy Research and Development Fund. Projects slated for funding include research into clean coal, development of alternative transportation fuels and other coal research targeted solely to Kentucky’s Local Government Economic Development Fund-eligible counties in coordination with state universities and related community and technical college system programs.
 
Also included in the appropriation to the Office of Energy Policy from the Local Government Economic Development Fund is $2 million over the biennium to be matched with federal or private funds to support R&D activities at the University of Kentucky Center for Applied Energy Research directed toward development and demonstration of technologies for carbon management. Technologies may include chemical or mechanical capture, chemical or biological utilization and mitigation through the use of alternative fuel sources.
 
The budget agreement cuts base funding for state universities and the Kentucky Community and Technical College System by about 3 percent in FY 2008-09 with level funding remaining in FY 2009-10, the Louisville Courier-Journal reports.
 
The FY 2008-10 approved biennial budget is available at: http://www.lrc.ky.gov/record/08RS/HB406.htm
 
Maine
Several state initiatives supporting TBED fell victim to budget cuts in a package of revisions to the fiscal year 2008-09 budget, LD 2289, signed into law earlier this month by Gov. John Baldacci.
 
Facing a $190 million revenue shortage, legislators reduced funding for numerous state programs, including $220,000 in FY09 for the Office of Innovation’s Maine Technology Institute Innovation Cluster Program. There is an additional reduction in funding for management and operating costs of a bond program administration by the Maine Technology Institute by $300,000 in FY08 and $150,000 in FY09. Funding for research projects at the Centers for Innovation is reduced by $18,000 over the FY08-09 period.
 
The supplemental budget also reduces Maine Manufacturing Extension Partnership funding within the Department of Economic and Community Development by $50,000 in FY08 and $80,000 in FY09 and reduces funding to the Maine Procurement Technical Assistance Center by $70,000 in FY09.
 
Nebraska
Lawmakers are expected to pass the final version of Gov. Dave Heineman’s Super Advantage proposal (LB 895) this week, according to the Nebraska Department of Economic Development. The bill aims to lure companies that create high-salary jobs that pay well above the state’s average wage by expanding tax incentives.
 
The legislation stipulates that all businesses qualify for the tax breaks, excluding retail. Companies are required to create 75 new high-salary jobs with a $10 million investment or 50 new high-salary jobs with a $100 million investment.
 
The jobs would have to pay 150 percent of the state average wage, which is at least $50,700 based on current wage levels, according to the Omaha World-Herald, or 200 percent of the average wage in the county where the business is located. Qualifying companies will receive a 15 percent tax credit and 10 percent wage credit. Additional benefits include direct sales tax refund and a 10-year exemption on all tangible personal property.

Traci Hancock was named executive director of BioNebraska.

Dan Curran is the new director of the Business Development Division of the Nebraska Department of Development.

Linda Fettig was named director of the Nebraska Rural Development Commission.

Investments in science and technology (S&T) – from higher education to industry research and development (R&D) – are the decisive factors in creating a sustainable economic future, a new study finds.