Despite scare, IEDC getting what's needed in new budget

BYLINE: John Ketzenberger

Nate Feltman fretted in February when House Democrats stripped millions from the Indiana Economic Development Corp.'s proposed budget.

Not anymore. The state's new two-year budget includes:

$70 million for the 21st Century Research and Technology Fund.

$20 million for the Indiana Life Sciences Initiative that will be split between Indiana and Purdue universities beginning in fiscal 2009. The IU Medical School will get $15 million, while Purdue will get $5 million.

$6 million for the Indiana High-Growth Incentive Fund.

"We're pretty encouraged with the results of the Legislature overall," said Feltman, decidedly not fretting as he cruised to Lafayette on Wednesday for a speech.

The 21st Century Fund is paid for with money the state gets from the tobacco settlement, and that's what nearly snuffed out the appropriation. Rep. Bill Crawford, D-Indianapolis, didn't like the idea of spending more than one-fifth of the money on economic development instead of health care.

But the Senate restored the money, albeit $5 million less than the current funding level, and it survived the conference committee process.

The money is needed to plug the funding gap between a company's startup and its move into profitability. Without it a lot of small Indiana tech companies would be kaput.

The life-sciences funding doesn't kick in until fiscal 2009. It's meant to foster further research cooperation between IU doctors and Purdue engineers.

Feltman only got about a quarter of the high-growth incentive funds he asked for, but he's happy to get anything. There are few strings attached to this money to help IEDC close deals for company relocations or expansions.

Ten other states already have these funds, all of them larger. But, as Feltman says, "At least we're in the ballgame."

Gaelic lesson

Here's a little coincidental symmetry.

The Indiana Private Industry Council's E-3 Summit on Wednesday at the Downtown Westin will feature a keynote speech by Eoin O'Driscoll. The chairman of Ireland's top economic advisory board will talk about his country's economic resurgence.

Indiana just took a page from Ireland's playbook. The General Assembly enacted a tax exemption on patent income, making Indiana just the fourth state to do so. The state's technology sector hopes it will give innovators another reason to pursue patentable ideas.

If you're not sure how it works, go hear O'Driscoll. Ireland has done it for years.

Gee, thanks

Imagine if business could dictate self-promotion like the General Assembly can.

The budget awaiting Gov. Mitch Daniels' signature includes a property tax rebate. But that's not enough. In section 300, your legislature makes sure we know who to thank, specifying language for the notices sent to taxpayers: "A portion of your local property taxes due in 2007 are being refunded due to tax relief provided by the Indiana General Assembly."

They even had the chutzpah to dictate 12-point type.

Makes you wish Daniels had a line-item veto.

Catch John Ketzenberger on WTHR's 6:30 a.m. news every Tuesday and Thursday. He can be reached at (317) 444-6081 or at john.ketzenberger@indystar.com.