Copyright State Science & Technology Institute 2002. Information in this issue of the SSTI Weekly Digest was prepared under a cooperative agreement with the U.S. Department of Commerce, Economic Development Administration. Redistribution to all others interested in tech-based economic development is strongly encouraged — please cite the State Science & Technology Institute whenever portions are reproduced or redirected. Any opinions expressed in the Digest do not necessarily reflect the official position of the U.S. Department of Commerce.
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In the February 27, 1998 Issue:
BENEFITS OF R&D TAX CREDIT REPORTED
The R&D Credit Coalition recently released a report that concludes the federal R&D tax credit would pay for itself by boosting productivity and economic growth. According to the report, making the R&D tax credit permanent would stimulate an additional $41 billion in R&D activity by U.S. companies between 1998 and 2010.
The coalition sponsored a study prepared by Coopers & Lybrand's Tax Policy Economics Group. The study examined both the cost of the tax credit to the Treasury and impact of the provision on the economy.
The R&D Credit Coalition is comprised of approximately 1,000 companies and trade associations and supports efforts to make the tax credit a permanent part of the tax code. Currently, the R&D tax credit is considered temporary and is scheduled to expire June 30, unless Congress votes to extend it.
Other benefits cited by the report include:
Higher productivity stimulated by the R&D credit would cause the economy to produce nearly $58 billion more of goods and services during the 1998-2010 time period.
As a result of productivity gains and the expansion of opportunities, personal income would increase by $61 billion over the 1998-2010 period. The report calculates the after-tax benefit of this increase would be equivalent to a $5 billion tax cut over 5 years and a $25 billion tax cut over 10 years.
A 1996 survey of state R&D tax incentives conducted by the State Science and Technology Institute indicated that the impact and effectiveness of state incentives were unclear. The survey found that 35 states offered some type of incentive for R&D activity. Many of those states modeled their programs after the federal tax provision and some states tied their tax credit formula to the federal credit and are dependent upon federal action.
The SSTI study noted that although most states do offer some type of R&D tax incentive, the limited amount of data that is collected and available limits any analysis of the effectiveness of state incentives.
The Coopers and Lybrand study, Economic Benefits of the R&D Tax Credit, is available by contacting Mark Weinberger, counsel to the R&D Credit Coalition, at 202/293-7474. The SSTI survey of state R&D tax incentives is available by calling the Institute at 614/421-SSTI (7784).
MATH & SCIENCE PERFORMANCE IS UP IN MOST STATES
A recent study found that students are performing at higher levels in mathematics and are taking more higher-level math and science courses in the majority of the 40 states that participated in a recent study of U.S. mathematics and science education.
The findings come from State Indicators of Science and Mathematics Education, 1997. This study, the fourth in a biennial series on the condition of K-12 science and math education, was funded by the National Science Foundation (NSF) and prepared by the Council of Chief State School Officers (CCSSO) with cooperation from the state departments of education and the National Center for Education Statistics.
The CCSSO study focused on student achievement in mathematics and science, mathematics and science content and instruction, and teacher preparation, supply, and conditions. Major findings include:
From 1990 to 1996, 27 states made significant improvement in the percent of 8th grade students reaching the "proficient" level of the National Assessment of Educational Progress (NAEP);
The average NAEP science score was significantly above the national average in 17 states;
More than 50 percent of high school students take three years of mathematics and science by graduation, a significant increase from 1990; and,
Nationwide shortages of well-prepared or certified teachers persist; one-fourth of the states have significant teacher shortages at the high school level, with 10 to 20 percent of teachers not certified in their assigned field.
CCSSO is a nationwide, nonprofit organization composed of public officials who lead the departments responsible for elementary and secondary education in the states. CCSSO's goal in producing this report is to assist state, national, and local policymakers and educators in making informed decisions when reforming and restructuring science and mathematics education. The entire report, State Indicators of Science and Mathematics Education, 1997, can be viewed on the web at www.ccsso.org.
USE OF PATENT FEES RAISES CONCERNS
Industry associations are expressing concern that the diversion of user fees from the U.S. Patent and Trademark Office (PTO) is adversely affecting the speed of innovation. The PTO receives no taxpayer dollars and is supported entirely by user fees; however, for the last several years, most of those user fees have gone to the government's general fund to help balance the budget rather than to support PTO operations.
Under the Clinton Administration's 1999 budget proposal, $119 million in user fees would go to the general fund. This amount is up from $92 million in FY1998 and $54 million in FY1997.
Several professional associations and trade groups, including the National Association of Manufacturers, have argued that if PTO were able to retain more or all of its user fees the PTO would be able to cut its backlog of pending patent applications and speed the process of bringing new products to market.
This provision is expected to be discussed by industry leaders at a hearing of the House Judiciary Committee's Subcommittee on Courts and Intellectual Property scheduled for March 19.
PRESIDENT OF MSTF NAMED
Joel B. Russ was recently named the new president of the Maine Science and Technology Foundation (MSTF). Prior to accepting this position, Russ served as the President and CEO of the Chamber of Commerce of the Greater Portland Region, as well as serving as a member of the MSTF's Board of Directors. MSTF is a state-chartered, non-profit organization whose mission is to stimulate science and technology-driven economic growth in Maine.
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