SSTI Digest

There are only a few programs in the Treasury Department that SSTI monitors for the tech-based economic development community. All are slated for termination or phaseout.

The Community Development Financial Institutions (CDFI) Program ($31.4 million in FY 2005), the Bank Enterprise Award ($11.4 million in FY 2005), and the CDFI Native Initiatives ($6 million in FY 2005) all would be eliminated as part of the initiative to create a Strengthening American Communities Grant Program within the Department of Commerce (see Multi-Agency Initiatives for details).

The Administration's FY 2006 budget request for the Environmental Protection Agency (EPA) is $7.6 billion, a 5.6 percent decrease from the FY 2005 appropriation. However, the agency's science and technology programs would receive $760.6 million, a 2.2 percent increase over the FY05 appropriation.

A $79 million increase is proposed for EPA homeland security efforts, including:

The Administration's $16.47 billion FY 2005 budget request for NASA represents a 2.4 percent increase over the FY 2005 appropriation. Among highlights, the budget proposal maintains investments in next-generation Earth-observing satellites to support climate research efforts. It also continues support for Lunar, Mars, Earth Observations Systems and solar research, but cancels the Jupiter Icy Moon Orbiter program, promising to fund Project Prometheus to test a nuclear reactor in 2008 and fly a demonstration mission within a decade.

The budget request for the Science Mission Directorate is $5.48 billion, a modest decrease from its $5.53 billion in FY05. By contrast, Education programs are reduced by nearly 23 percent to $166.9 million. Funding for AeronauticsResearch is down 5.9 percent from FY05 to $852.3 million.

The Administration's FY 2006 budget request for the National Science Foundation (NSF) is $5.605 billion, a 2.4 percent increase above the FY05 appropriation level, but is still lower than the agency's FY04 appropriation of $5.652 billion.

Demand for NSF funding has increased dramatically over the past few years, based on the funding rate for research grants dropping from 30 percent in the late 1990s to only 20 percent in 2005 (estimated). The budget brief states, "In FY06, NSF will increase the funding rate to the FY04 level of 21 percent, while striving to maintain recent gains in award size and duration." This may be difficult given funds available would barely keep pace with inflation and the agency would add 25 employees under the Administration's request.

There are three federally established regional commissions and authorities that are dedicated to improving the economic opportunities within specific geographic regions. Two - the Appalachian Regional Commission and the Delta Regional Authority - are dependent on annual appropriations and are looking at reductions in FY 2006. The Tennessee Valley Authority, the oldest and largest of the three, generates its budget primarily through power generation revenues. TVA still requires the government to approve or set its annual spending level.

The Administration's $593 million FY 2006 request for the Small Business Administration (SBA) represents a 3 percent decrease from the FY 2005 appropriation. Funding levels for selected activities identified as "core programs" in the agency's press release include:

The first four installments of SSTI's annual look at how TBED will play in the 2005 legislative priorities of the governors can be found in the Digest archives on our website: http://www.ssti.org/Digest/digest.htm

Kentucky Gov. Ernie Fletcher, State of the Commonwealth Address, Feb. 1, 2005 "The tax plan I offer tonight includes incentives to help promote education and economic growth...I'm proposing a tuition tax credit of up to 500 dollars for each student going to Kentucky colleges and universities.

Gov. Christine Gregoire announced the first stages of her economic development program last Wednesday, highlighted by a proposal to inject $35 million annually starting in 2008 for the next 10 years into life sciences research at the state's universities. Gov. Gregoire also requested legislation be introduced this week that would facilitate the transfer of technology from research institutions to the private sector.

Gov. Gregoire said the payoff of the proposed Life Sciences Discovery Fund would be twofold, with a strengthening of the state's reputation as a bioscience center and the creation of as many as 20,000 new jobs in the next 10-15 years.

The nation's most significant source of funding for life science research, the National Institutes of Health, announced two sweeping changes last week that could dramatically alter biotechnology commercialization. The first policy change addresses known and potential conflicts of interest by NIH employees, while the second encourages all NIH-funded research to be released publicly within 12 months of final publication.

The latest email from the Reseau Innovation Network's Innovation Newsletter out of Canada and the D.C.-based Public Forum Institute's National Dialogue on Entrepreneurship called to SSTI's attention two websites with online access to more than 60 academic research papers of potential interest and importance to those interested in encouraging economic growth through innovation, technology commercialization, entrepreneurship and public policy.

SSTI will highlight selected papers in Digest articles over the coming weeks, but links to all of the works and brief introductions to the sites are provided below.

In January, Rhode Island's Tech Collective announced the creation of BioGroup, a subsidiary to focus on the needs of the state's life science industry. The new organization will serve as the state affiliate to the Biotechnology Industry Organization (BIO).

The San Diego Regional Technology Alliance has become a component of CONNECT at the University of California-San Diego. Under the new name, RTA@CONNECT, the Alliance will focus on delivering training and entrepreneurial assistance services.

By the end of the week, SSTI will be sending Digest subscribers our ninth annual review of the president's federal budget proposal. We will highlight dozens of science and technology programs and initiatives of interest to our readers. Early indications are the 2006 request, released this afternoon, if enacted would result in significant changes for nearly every program of importance for the tech-based economic development (TBED) community. A few leaked headlines over the past few days set an ominous tone: CDBG and Treasury programs merged with the Economic Development Administration and cut by $13 billion; and the Manufacturing Extension Partnership slashed 57 percent.

Grappling with record deficits and a pledge to cut the deficit in half over four years, the Administration's budget proposal, as always, will reveal its priorities for strengthening the country's position as the leader of the global knowledge economy.