As revenues continue to tighten, many states entered fiscal year 2027 (FY 2027)—which began July 1 for most—with cautious or constrained spending priorities. With the exception of South Carolina, all states have now enacted their FY 2027 budgets. Most adopted maintenance‑level or reduced spending plans that limited new recurring expenditures, reduced one‑time appropriations, and reprioritized core services such as Medicaid and education.
Governors and legislatures also placed greater emphasis on affordability issues—including childcare, housing, and energy costs—alongside tax and property‑tax relief and traditional economic development tools such as site development, shovel‑ready initiatives, and business‑attraction strategies aligned with workforce programs.
Despite fiscal concerns or uncertainty, states continued to make targeted TBED and innovation investments in FY 2027. From quantum and biotech to semiconductors, nuclear energy, and advanced manufacturing, the funding initiatives often reflect a broader strategy to strengthen long‑term economic competitiveness through focused, sector‑specific innovation funding.
Below are a few examples of notable state-funded TBED and innovation initiatives that received funding in this new fiscal year.
Missouri and North Carolina
Lawmakers in Missouri and North Carolina recommitted to key innovation programs. Missouri restored $2.5 million in FY 2027 funding for the Missouri Technology Corporation (MTC) after eliminating support in FY 2026. In North Carolina, legislators passed a long‑delayed budget that preserved NCInnovation’s $500 million endowment, originally appropriated in 2023, despite earlier proposals to redirect or eliminate the funds. NCInnovation is a public-private partnership that supports commercialization efforts across the state’s public universities.
Indiana
In April, Indiana Gov. Braun announced a $10 million investment in Roll Tack Ventures, an Indiana-based venture capital firm committed to investing in growing technology companies. The state’s $10 million commitment will be made through the 21st Century Research & Technology Fund (FY 2025-2027 biennium) and will directly support investment in business-to-business (B2B) technology companies that address critical operational challenges across manufacturing, logistics, energy, healthcare, insurance, and critical infrastructure. The state's investment into the brand new venture, alongside participation from private capital investors, supports Roll Tack’s first fund, Roll Tack 26, proposed to raise $50 million
Maryland
Maryland significantly expanded its quantum‑focused innovation strategy in FY 2027. Gov. Wes Moore and lawmakers approved tens of millions of dollars for the “Capital of Quantum” initiative, deepening the administration’s effort to build a quantum economy in College Park and Prince George’s County. State officials report more than $500 million in sector‑specific commitments to date, including partnerships with Microsoft and DARPA.
Major FY 2027 budget allocations include:
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$20 million for IonQ’s planned global headquarters in College Park, part of a larger $50 million multi‑year commitment.
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$22 million for the University of Maryland Enterprise Corp. to expand the Quantum Start‑Up Foundry and build national testbeds.
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$20 million for a deep‑tech facility in the Discovery District.
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$12 million for ARLIS (Applied Research Laboratory for Intelligence and Security) to recruit quantum faculty.
This new funding also seeks to deepen the administration’s push to move the state beyond its long-standing dependence on education, federal spending and health care.
Massachusetts
Earlier this spring, Massachusetts’ Gov. Maura Healey’s Administration filed the Mass Wins Act (H 5386), a 2026 economic development package proposing $305 million in innovation and competitiveness investments. The measure, which builds upon and extends the nearly $4 billion Mass Leads Act (2024) that made significant investments in life sciences, climatetech, robotics, and advanced manufacturing, continues to strengthen the state’s global position in those areas as well as AI, cybersecurity, semiconductors, and biosecurity; i and, allocate $20 million for site development to attract international companies. Lawmakers ultimately replaced the proposal with H 556/5576: An Act Relative to Economic Development in the Commonwealth. While they approved Healey’s $305 million in recommended innovation and economic development funding, as well as the $20 million for site development, they removed the measure’s $50 million seed investment initiative—the GlobalMass Innovation Access Fund. Lawmakers pushed back on the administration’s recommendation to use state pension funds for its creation.
New Mexico
In New Mexico, the state’s new Technology and Innovation Network Advisory Board held its inaugural meeting June 1, beginning formal oversight of more than $200 million in planned state technology and innovation investments. The board will advise Economic Development New Mexico’s Technology & Innovation Office (TIO) on strategic planning, industry engagement, and administration of the state’s Research, Development and Deployment (RD&D) Fund. Of the more than $200 million in planned FY 2027 investments, $110 million will support the state’s RD&D Fund.
New York
Continuing New York’s strategic investments in life sciences, including the creation of Cell and Gene Therapy Innovation Hubs on Long Island and in Western New York and the Biodefense Commercialization Fund to find new treatments for infectious diseases, Gov. Kathy Hochul and lawmakers allocated $65 million to the Bolstering Biotech Initiative, part of an ongoing life sciences program explicitly designed to grow New York’s biotech and biopharma cluster. This program will support all phases of the life science sector pipeline, from discovery to commercialization of life-changing therapeutics — with a focus on neurodegenerative disease — and catalyze private investment in biotechnology research and development.
Additional FY 2027 allocations include:
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$25 million for the downstate Semiconductor Chip Design Center
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$10 million to launch the Manufacturing Modernization Program.
Pennsylvania
In the FY 2027 Pennsylvania budget, Gov. Josh Shapiro and state lawmakers allocated $125 million to launch Innovate in PA 2.0, an expanded version of the state’s earlier Innovate in PA initiative. The updated program deepens investments in life sciences, robotics, technology, energy, manufacturing, and agriculture, while also broadening access to venture capital, strengthening leadership pipelines in life sciences and biotech, supporting clinical trials, accelerating the commercialization of university research, and seeding regional venture studios. Funding will come from Insurance Premium Tax Credits. The budget also preserves $10 million for the Agricultural Innovation Grant Program, which supports continued innovation across Pennsylvania’s agriculture sector; and includes several provisions aimed at increasing accountability for large technology companies operating data centers in Pennsylvania.
Separately, lawmakers approved House Bill 2017, authorizing construction of new nuclear power facilities using small modular reactors and micro reactors.
However, one of the Shapiro Administration’s signature proposals—the Governor’s Responsible Infrastructure Development (GRID) Standards, designed to regulate data‑center growth and set developer requirements for accessing state tax incentives—did not advance out of the Senate. The measure remains viable, as the legislative session runs through November.
Tennessee
Tennessee continued to invest in its multi‑year nuclear energy strategy in FY 2027. Gov. Bill Lee and lawmakers appropriated:
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$25 million for the Nuclear Energy Supply Chain Investment Fund (Nuclear Energy Fund).
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$50 million for the Small Modular Reactor (SMR) Grant Fund.
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$50 million to advance adoption of artificial intelligence technologies.
Since 2024, the state has made $70 million available for the Nuclear Energy Fund, supporting 14 projects involving private companies, universities, and local governments. These initiatives support the expansion of nuclear-related businesses, workforce development, and span uranium enrichment, advanced reactor development, nuclear component manufacturing, education programs, and site and infrastructure preparation.