Oregon Innovation Efforts to get 56% Boost in Gov's Budget

Encouraged by promising commercialization efforts, new companies created and an impressive leverage of outside funding, Gov. John Kitzhaber has proposed a more than 50 percent increase in Oregon innovation efforts through the state's signature research centers. The governor's budget proposal for 2013-15 also includes funding to address small business capital needs and to better align workforce programs with employer needs. Calling his two-year spending plan an “education investment budget,” Gov. Kitzhaber also wants $8 billion to reverse the trend of cuts and layoffs in schools and proposed creating a Department of Postsecondary Education.

The governor's budget for economy and jobs is $7.2 billion in total funds with $611 million in general and lottery funds, a 13 percent increase over last biennium. OregonInC would receive $25 million in lottery funds, up from $16 million approved in the 2011-13 biennium, to fund signature research centers and proposals aimed at creating new industry clusters. This includes the Oregon Nanoscience and Microtechnologies Institute (ONAMI), Oregon Translational Research and Drug Institute (OTRADI), Oregon Built Environment and Sustainable Technologies Center (BEST) and other initiatives such as wave energy and electric vehicles. Touting the success of the public-private board that helps drive the state's innovation strategy, Gov. Kitzhaber said in a speech that OregonInC has created 26 new companies over the last five years and captured hundreds of millions in grant funds.

To address capital needs of small businesses, the governor is requesting $5 million in lottery funds for the Oregon Growth Board to leverage and invest in qualified Oregon businesses. This could include support for investments across the capital continuum, including early stage companies, venture capital and later stage growth companies, budget documents note.

The governor's budget also includes $10 million for initiatives designed to better align the skills of those seeking employment with the needs of businesses.

A single body would decide how best to divvy up higher education funding under a proposal to create a new Department of Postsecondary Education floated by the governor, who is seeking a more outcomes-based approach, such as distributing funding on measures of progress and completion (see related story on performance-based funding). The new department would consolidate the Higher Education Coordinating Commission, the Department of Community Colleges and Workforce Development and the Oregon Student Access Commission.

By combining a significant boost in education funding with savings anticipated from revamping the state's pension plan, the governor hopes to reverse the trend of cuts and layoffs in the education system and better position the state for meeting its 40-40-20 goal. Established last year under SB 253, the goal is to ensure that by 2025, 40 percent of adults have a bachelor's degree or higher, 40 percent have earned an associate's degree or post-secondary credential, and the remaining 20 percent have a high school diploma or equivalent (see the June 29, 2011 issue of the Digest).

Lawmakers will convene in early February to take up the governor's budget plan and other measures. Gov. Kitzhaber's 2013-15 budget proposal is available at: http://www.oregon.gov/gov/priorities/Documents/GBB_Complete.pdf.