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Cutbacks in service loom after 63 percent budget reduction

The Manufacturing Extension Partnership (MEP) is one of 15 finalists for the 17th Annual Innovations in American Government Award. Administered by the Ash Institute for Democratic Governance and Innovation at Harvard University's Kennedy School of Government in partnership with the Council for Excellence in Government, the award recognizes creativity and excellence in public sector service delivery.

With only two months to go in the 2004 fiscal year for most states, 32 are projecting small surpluses in the end - a sharp contrast to the situation they faced a year ago - according to a new report by the National Conference of State Legislatures (NCSL).

He may be more traditionally associated with gas-guzzling Humvees than anything remotely environmental, but Gov. Arnold Schwarznegger has become a big believer in alternative energy vehicles. The governor's recent call for creating a "Hydrogen Highway" by 2010 is, perhaps, the country's boldest commitment to getting hydrogen fuel cell vehicles on America's roadways anytime soon.

The U.S. Department of Homeland Security (DHS) recently selected Texas A&M University and the University of Minnesota to lead the second and third Homeland Security Centers of Excellence (HS-Centers). The department anticipates providing Texas A&M University, the University of Minnesota and their partners with a total of $33 million over the course of the next three years to address security in two key agricultural sectors -- foreign animal diseases and food security.

Studies have shown a strong correlation between high-wage economic growth and university research activity. Examination of nearly every strong regional technology center across the country will reveal at least one research university within its boundaries. As a result, many state and local technology-based economic development (TBED) efforts strive to increase the quantity and quality of university R&D undertaken within their boundaries.

A study released last week by the Economic Development Administration (EDA) and Carnegie Mellon University's Center for Economic Development finds that, within a region, universities are best able to affect the growth of young, emerging clusters. The study, Universities and the Development of Industry Clusters, concludes a "university must have a large base of research and development in order to significantly impact a cluster..."

One of the differences between technology-based economic development (TBED) and more traditional approaches to promoting economic growth is TBED's orientation that while all jobs may be important, they are not created equal. Traditional economic development may provide millions of dollars for financial incentives and infrastructure construction assistance for a shopping mall or "big box" retailer that provides many poverty-level wage positions or part-time jobs.

The Bush Administration's first budget request offers a mixed bag for state, local, and non-profit practitioners and policymakers in tech-based economic development. In research categories, the budget reflects the Administration's research emphasis in defense, biotechnology, and life sciences. The budget also reorganizes the nation's energy research priorities. Most other research categories were held at FY 2001 funding levels or received modest increases or cuts.

Research funding levels, with the exception of $150 million in Congressional earmarks, remain relatively flat between FY 2001 appropriations and the President's FY 2002 request. Economic development and Digital Divide programs, on the other hand, take several hits. Selected agency program highlights include:

The total agency budget request is $4.8 billion, $300 million less than the FY 2001 appropriation level. The majority of the reduction is absorbed by elimination of new project funding for the Advanced Technology Program, a 67 percent cut or $30 million for the Technology Opportunities Program, and a $77 million cut in Economic Development Administration programs. Selected Commerce program highlights include: