TBED funding to increase in some state budgets, cut in others; CA, HI, MN, NV, ND, RI

SSTI has reviewed another mix of state budgets as governors across the country continue to release their proposals. Some states, like California and North Dakota, are seeing cuts in the amount of money designated for TBED-related work, while others like Minnesota are in a more favorable fiscal situation and continue to fund such initiatives. Still others, like Rhode Island, are proposing new initiatives.

California

Gov. Jerry Brown’s proposed FY 2018 budget includes a phase out of the Middle Class Scholarship program, which the budget indicates would save the state almost $116 million by FY 2021. The program provides financial assistance for college students from families with incomes and assets up to $156,000. The governor’s recommendation is based on “the state’s overall financial condition,” the desire to provide “long-term stable growth in funding for the [University of California] and [California State University], and to maintain the broad Cal Grant entitlement for the state’s neediest students.” While the new budget notes that the 2016 budget included $22 million for UC for innovation and entrepreneurship, it indicates that those were one-time funds.

Hawaii

If enacted as proposed, the Hawaii Strategic Development Corp. (HSDC), a fund of funds that invests in venture capital partnerships that invest in Hawaii companies, would see a new infusion of capital for its investments. Under Gov.  David Ige’s FY 2017-2019 budget proposal, HSDC would receive a one-time infusion in FY 2018 of $10 million for HSDC's HI Growth Initiative, a comprehensive investment program to support the innovation sector. General fund support for the High Technology Development Corporation (HTDC) would decline from the $1.4 million in general funds it received in FY2017 to just under $1.1 million in general fund support in both FY 2018 and FY 2019.

Minnesota

Gov. Mark Dayton’s $45.8 billion FY 2018-2019 biennial budget calls for spending that is approximately 10 percent higher than the previous biennium, and emphasizes health care, education, and transportation, according to an Minnesota Public Radio analysis. As part of the budget, the governor recommends roughly $30 million in each year of the biennium (19 percent increase) for the Office of Broadband Development to support broadband projects, mainly in rural areas. Dayton’s proposal also recommends $10 million as a one-time appropriation in FY 2019 to support the Angel Tax Credit Program in calendar year 2018. The budget proposes modifications to the program, including lowering the minimum investment for individuals from $10,000 to $5,000, as well as eliminating restrictions on friends and families.  Previously, the program was funded at $15 million in calendar years 2015 and 2016 and $10 million in calendar year 2017.

Nevada

Gov. Brian Sandoval’s $8.1 billion proposed FY 2017-2019 budget provides support for higher education and workforce development, as well as commercialization activities. 

The Nevada System of Higher Education would receive $115 million in new investment over the biennium. Of this figure, roughly 70 percent targets increasing student enrollment at UNLV ($37.4 million), UN-Reno ($21.4 million), and the state’s four community colleges for career and technical education ($21.3 million). The budget would also earmark $41.5 million for the construction of a College of Engineering at the University of Nevada, Reno, to be matched by the college. Additionally, the budget would provide UNLV’s School of Medicine with $19.5 million in each year of the budget to support the school beyond the startup costs it received in the governor’s 2015 budget.

The Governor’s Office of Economic Development (GOED) would receive approximately $8.4 million in both FY 2017 and FY 2018. While this represents a decrease of 22 percent from the previous biennium, most is from a one-time expenditure matching a NASA grant. Within the GOED, Nevada’s Knowledge Fund, which seeks to spur research and commercialization around key industry areas, would receive a combined $23.3 million in the biennium, an increase of 44.1 percent. Appropriations for the state’s Office of Science, Innovation, and Technology would be essentially unchanged; the office would receive roughly $2 million in each year of the biennium under the proposed budget. This office is responsible for coordinating and aligning efforts by K-12, higher education, workforce development, and employers around STEM and broadband infrastructure. The proposed budget would provide $182,000 in new funding over the biennium for the Office of Workforce Innovation within the office of the Governor. This office is responsible for developing statewide strategies to ensure that new and existing industry employers can recruit Nevadans for skilled jobs and apprenticeships.

North Dakota

Faced with falling revenues due to declines in commodity prices, there is little new funding in Gov. Doug Burgum’s $4.6 billion proposed FY 2017-2019 biennial budget. The budget would allocate the Department of Commerce $1.5 million for entrepreneurship grants, a 53.8 percent decrease from the previous biennium.  The Department of Commerce would also receive $2 million from the state’s Strategic Investment and Improvements Fund for Unmanned Aerial Systems programming.

After receiving $12 million in FY 2013-2015 and $4.5 million in FY 2015-2017, Research ND would receive no funding in the governor’s proposed FY 2015-2017 budget. The state’s legislature is still discussing whether to continue the Angel Investment Tax Credit.

Rhode Island

In Gov. Gina Raimondo’s proposed FY 2018 budget, the state will focus on several tech-based economic development areas with a specific emphasis on manufacturing, workforce development, and higher education.  Efforts include:

• $3.7 million in additional funding to the state-run Davies Career and Technical School for upgrading facilities around advanced manufacturing;
• $3.5 million in additional funding to enhance an existing investment tax credit with a focus on manufacturing incentives;
• $2.5 million (up from $1.5 million) to expand the state’s R&D incentive program with an added focus on manufacturing R&D;
• $2.0 million in allocated funding for the Job-Ready Workforce Labor Stimulus Program (JWLS) – a manufacturing tax credit program to encourage new training and development initiatives; and,
• $550,000 (an increase of $300,000) for the Polaris Technical Assistance program to provide LEAN training, facility layout and other programming to the state’s manufacturers.

In addition, the Governor’s proposed budget includes $10 million in FY 2018 for the RI Promise – a state-wide program that provides two years of free college tuition for all residents. Under the proposal, students may receive the scholarship at the state’s Community College of Rhode Island (CCRI) immediately after graduation or at Rhode Island College (RIC) or the University of Rhode Island (URI) beginning their junior year (the college graduating Class of 2021).

The budget also proposes abolishing fees that are associated with registered apprenticeships in RI in order to incentivize employers to establish apprenticeship programs.