Oregon Budget Would Boost Funds for Innovation Efforts by 19%

Gov. John Kitzhaber recently unveiled a two-year spending plan that includes an additional $3 million for the Oregon Innovation Council's (Oregon InC) efforts to facilitate research and technology transfer. The governor's budget also recommends enhancements to the Strategic Reserve Fund used to expand and retain businesses and attract new companies and additional funding for the Industry Competitiveness Fund, a resource for industry clusters, statewide and regional economic development groups, and international trade-oriented businesses.

The proposed budget would provide $19 million (a $3 million increase) in lottery funds for the following Oregon InC signature research centers and programs in 2011-13:

• Oregon Nanoscience and Microtechnologies Institue — Oregon's first signature research center established to foster nanoscience and microtechnology R&D.
• Oregon Translational Research and Drug Institute — A signature research center that provides resources for university researchers and biotech or pharmaceutical companies to fuel drug discovery and commercialization.
• Oregon Built Environment and Sustainable Technologies Center — A program connecting businesses with university-based networks of shared-user labs and expertise to commercialize built environment and renewable energy research into commercial products, services, and jobs.
• Oregon Wave Energy Trust — A public-private partnership supporting wave energy development.
• Northwest Food Processors Innovation Productivity Center — A program to identify and develop more effective ways to improve productivity and enable innovation in food processing.
• Drive Oregon Initiative— A new initiative to establish Oregon as a world leader in the design, manufacture, and integration of ultra-efficient vehicles and related infrastructure and technologies.

Total funding for Economic Development is $4.4 billion, down from $8.2 billion last biennium, with $19.4 million from general funds, also down from $29.2 million. The department's main revenue source is lottery funds. This includes $14.5 million in total funds for the Strategic Reserve Fund ($2.2 million increase), $2 million for the Industry Competitiveness Fund ($200,000 increase), and $5 million to establish a new Business Expansion program.

The program would provide incentives for companies to expand or relocate in the state based on the increase in new personal income tax revenue. Companies must hire at least 50 new employees and guarantee wages of $60,000 or more per year under the proposal.

Gov. Kitzhaber is considering major overhauls to the state's economic development programs, according to an article in the Portland Business Journal. Proposals include the creation of an economic development czar within the governor's office and changes to the Oregon Growth Account and Oregon Investment Fund to focus on investments in targeted industries.

The governor also introduced a number of tax break proposals aimed at job creation including a proposal to allow individuals to reduce the income tax on capital gains proceeds that are reinvested in qualifying companies, according to The Register Guard. The credit would be available for the second year of the biennium and would be capped at $25 million.

Oregon's budget shortfall is estimated at $3.5 billion. View the governor's budget proposal at: http://governor.oregon.gov/Gov/docs/priorities/BUDGET_Full_Budget.pdf