Western States Scale Back on 2010 TBED Investments

Lawmakers across several western states have reached budget agreements for the upcoming fiscal year or biennium allocating decreased or level funding for tech-based economic development efforts. Lawmakers also passed new legislation supporting job-creation efforts and investments in alternative energy. While funding for many of these programs appear secure in FY10, additional spending cuts are anticipated in the coming months if state revenues continue to decline.

Colorado
Gov. Bill Ritter signed the budget bill (SB 09-259) earlier this month providing $19.2 billion in FY10, including $4.5 million for continued investment in the state's bioscience industry. Although the appropriation for the Bioscience Discovery Evaluation Grant Program is $1 million less than last fiscal year, it is the second installment approved by lawmakers for the five-year, $26.5 million initiative (see the May 14, 2008 issue of the Digest). Funding for this initiative is distributed for proof-of-concept grants, support for early-stage companies and infrastructure.

Additional economic development appropriations include $2.7 million for Colorado First customized job training, $1.4 million for new jobs incentives, and $1.3 million for small business development centers.

Gov. Ritter signed into law two bills touted as job-creation legislation to help companies create new jobs and strengthen community college job training programs to better meet the workforce needs of emerging industries.

HB 1001 allows qualified companies to apply for a state income tax credit based on the payroll tax cost they incur from new job creation. To qualify, businesses must create at least 20 new jobs in urban areas or five new jobs in rural areas that pay above average wages.

The other bill, SB 171, creates a programmatic change within the existing Colorado First program to allow community colleges and other training providers to partner with businesses to create industry cluster-based training programs for all workers. Current training programs are restricted to individuals who are currently employed, according to the governor's office. The bill is targeted toward the New Energy Economy industries, which include aerospace, tourism, new energy, bioscience and information technology.

Approved by the legislature but awaiting the signature of Gov. Ritter, HB 1105 would establish a one-year pilot program granting a 30 percent state income tax break for angel investment in startup companies, reports Coloradoan.com. The cost is estimated at $750,000 and would be provided by the Office of Economic Development.

Gov. Ritter announced in April the state will use federal stimulus funds to maintain level funding ($706 million) for higher education for the next two fiscal years.

Idaho
The FY10 appropriations bill for the Department of Commerce was signed into law earlier this month following a tumultuous session centered on a transportation funding plan addressing infrastructure needs.

The Commerce budget includes $30.3 million for the department in FY10, 14.4 percent less than the FY09 appropriation. Lawmakers approved $132,600 in spending authority for Project 60, only a fraction of the governor's recommendation. The initiative aims to grow the state's Gross Domestic Product from $51 billion to $60 billion over the next six years. Although the appropriation is $717,400 less than the governor's request, another $320,000 from the business and jobs development fund and any interest earned from the fund could go toward the initiative in the coming year, according to department officials.

No funding is included for Idaho TechConnect, a $150,000 decrease, which supports entrepreneurship, university-industry collaboration and technology commercialization.  Additionally, no funding is allocated for Small Business Assistance Grants, which received $100,000 last year.

Within the Colleges and Universities budget, $1.6 million is included for the Center for Advanced Energy Studies at Idaho Falls, the same amount as last year. Budget documents note the funding source for the center comes from the American Recovery and Reinvestment Act state fiscal stabilization fund.

Washington
Washington's Life Sciences Discovery Fund was spared from a massive reduction proposed by the House and instead, will be cut 41 percent in the next biennium under the budget agreement approved by lawmakers. While the $39 million appropriation from the state's tobacco settlement account is a significant reduction from the last two years, it is far less sweeping than the House's proposed cut, which would have left only $5 million for the fund. The House wanted to transfer the remaining balance to the general fund to fill budget gaps, reports Xconomy. When created in 2005, lawmakers envisioned the fund would reach $1 billion in ten years (see the May 16, 2005 issue of the Digest).

Within the Department of Community, Trade and Economic Development, lawmakers allocated $51.2 million in general funds for FY10 and $51.9 million in general funds for FY11. This includes $246,000 for Manufacturing and Modernization, down $60,000 from the approved FY09 budget. The budget agreement also includes $2.5 million each fiscal year for the Washington Technology Center, down approximately 10% from the approved level last biennium.

Many of the Gov. Christine Gregoire's recommendations for Science, Technology, Engineering, and Mathematics (STEM) programs are funded during the biennium from the Education Legacy Trust, including:

• $3.85 million for a math and science instructional coaches program;
• $3.2 million of for three additional professional development days for middle and high school math and science teachers;
• $1.6 million each fiscal year for the Washington state leadership and assistance for science education reform (LASER) regional partnership activities; and,
• $139,000 each fiscal year for staff at the office of the superintendent of public instruction to coordinate and promote efforts to develop integrated math, science, technology, and engineering programs in school districts across the state. Grants of $2,500 will provide 20 middle and high school teachers each year with professional development training for implementing integrated STEM programs.

The legislature also approved the governor's request to allow four-year colleges and universities to raise tuition by 14 percent and community colleges by 7 percent in each of the next two years.

Gov. Gregoire may call a special session to deal with budget savings measures, school levies and offender sentencing measures, according to a press release. The budget approved by legislators for the upcoming biennium addresses a $9 billion deficit and is available at: http://apps.leg.wa.gov/billinfo/summary.aspx?bill=1244&year=2009.

To allow for more Innovation Partnership Zones to be located in rural parts of the state that do not house a university, the governor signed HB 1128, which waives a requirement that a research institution be located within the zone. The program was created in 2007 to stimulate the growth of industry clusters and to build regional economies by bringing together research, workforce training and globally-competitive companies in close geographic proximity (see the Oct. 10, 2007 issue of the Digest).

Another measure signed by the governor (HB 1007) creates a sustainable energy trust to promote the development of renewable energy technologies and the application of energy efficiency measures by authorizing the issuance of revenue bonds to finance renewable energy and energy efficiency improvement costs.

The governor's proposal to develop a Washington Council on Aerospace was not approved by the legislature. The bill was intended to maintain the state's competitive edge in the aerospace industry by coordinating worker training programs at community and technical colleges and universities.