Legislature slices Innovation budget; Initiative backers get half of what they asked
BYLINE: Andy Giegerich
Oregon business and government leaders are disappointed with recommended funding levels for a top 2007 economic development initiative.
While Gov. Ted Kulongoski's budget had requested $38 million for Oregon Innovation Council programs in his own 2007-2008 biennial budget, committee leaders said the request was based on overly optimistic revenue projections.
Even so, Oregon Innovation Council's backers want the state to supply $28 million in program funds, as opposed to the $19 million in the Ways and Means budget proposed by co-chairs Rep. Mary Nolan, D-Portland, and Sen. Kurt Schrader, D-Canby.
The Ways and Means co-chairs' budget is considered a traditional starting point for key monetary decisions.
"The governor is disappointed in the co-chairs' budget because it didn't recognize the long-term benefits it will provide our state," said Anna Richter-Taylor, Kulongoski's spokeswoman. "It was brought together ... to leverage federal and private dollars to attract high-paying jobs and strengthen our research efforts."
Kulongoski will continue meeting with lawmakers as he seeks at least some of the requested extra funding, Richter-Taylor said.
"If there's a way we can find the money, I'm all for it," said Schrader. "From our standpoint, because we didn't have the money for it all, we tried to show our support for [Oregon Innovation Council] by giving half the money the governor wanted."
Oregon Innovation Council was created by the 2005 Legislature as a nonpartisan and statewide public-private advisory group that hopes to fund 11 "innovation-driven" industries by 2009. The industries would represent future growth opportunities.
The original budget requests by the council and Kulongoski would have, among other things:
-
•
steered $10 million to the Oregon Nanoscience and Microtechnologies Institute, which researches development related to microtechnology and sustainability efforts; -
•
$7 million toward a research center that develops and commercializes new drugs to fight infectious diseases. -
•
$5.2 million would have funded "wave energy" programs that essentially develop power sources from ocean waves.
Oregon Innovation Council earned notice because it aims to fund new industries such as the wave energy project and older-line industries such as metals manufacturing.
Nolan said a subcommittee on transportation and economic development, chaired by Sen. Betsy Johnson, D-Scappoose, will earmark the OIC money. The subcommittee could decide to fund some programs without funding others, or to split the money evenly among the 11 proposals.
Either way, the committee will examine which initiative components might create the most jobs.
Ken Rocco, a legislative fiscal officer, said committee members seem interested in provisions that would fund the wave energy project and the nanoscience and microtechnology programs.
Kulongoski's original budget had assumed more revenue would arrive via an increased corporate minimum tax, which the Legislature has not passed, and a proposed auto insurance tax, which also gained no traction, Nolan said.
"It's pretty simple: We have only so much money and we were a bit more conservative in our estimates of what we have than the governor," she said.
Johnson said Oregon Innovation Council and other issues related to funding Oregon Economic and Community Development programs will likely be among the last measures approved this session. She and Sen. Ryan Deckert, D-Beaverton, a fervent Oregon Innovation Council backer, will work to find more money for the initiative.
Their options include either reprioritizing currently available revenue, meaning cutting other programs in favor of the Innovation Council, or finding additional resources to fund it.
"[Oregon Innovation Council] is a product that went through a rigorous process, and our unwillingness to move ahead with it could have a chilling effect for business to form any kind of intersection with government," Johnson said. "Right now, I'm feeling severely challenged by the co-chairs' budget."
David Chen, Oregon Innovation Council's chairman, said Johnson is leading the charge to seek the extra $9 million above the co-chairs' proposal for the program.
"The $28 million is still a painful reduction, but it's by no means $19 million," Chen said. "We think we have support around that. We're determined to get it, but we also know that it's a tough environment out there."
It's tough for other advocates as well. Community college interests have expressed the most displeasure with their allotment: Kulongoski had requested $72.7 million for the higher-ed programs; the lawmakers' proposal would allot $33.2 million.
Richter-Taylor said if Kulongoski doesn't obtain full Oregon Innovation Council funding, he'll seek the difference during the next biennial session.
A plan for the future
The Oregon Innovation Council plan to grow the economy faces an uphill battle in the state Legislature, which is proposing to cut funding for the $38.2 million in initiatives to $19 million. Below is the original proposal:
-
•
$10 million to the Oregon Nanoscience and Microtechnologies Institute, launched in 2003, which researches development related to microtechnology and sustainability efforts. Specific efforts include a nanotechnology incubator and a privately sourced equity capital fund to support ONAMI startups. -
•
$7 million toward the launch of the Oregon Translational Research and Drug Discovery Institute, a partnership between UO, OSU, PSU and OHSU, to help firms commercialize new technology that has the potential to fight infectious disease. -
•
$5.2 million would fund the first commercial-scale wave energy park in the United States. -
•
$5 million to fund an Innovation Accelerator with the Oregon Economic Community Development Department, to promote partnerships among industries, schools and entrepreneurship networks. -
•
$4.6 million to support the launch of the Northwest Visioning, Innovation and Productivity Center, in collaboration with OSU's Food Innovation Center, and support for Oregon seafood firms through the Community Seafood Initiative in Astoria. -
•
$3.4 million for training, lab equipment and a matching grants program for firms in the manufacturing industry, in partnership with OSU. -
•
$3 million to launch a Bio-Economy and Sustainable Technologies Center supporting renewable energies, bio-based products and green building materials. It is a partnership between the UO, OSU, Oregon Institute of Technology, PSU, the Pacific Northwest National Laboratory in Richland, Wash., and private industry.
Four other initiatives won't require funding.