In the January 9, 2006 Issue:

Copyright State Science & Technology Institute 2006. 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.

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Oklahoma Supreme Court Approves $50M in Bonds for Endowed Chairs
Upon ruling in favor of a $50 million bonds issue last month, the Oklahoma Supreme Court cleared the way for an endowed chairs program at colleges and universities throughout the state .

Gov. Brad Henry signed HB 1904 in April 2004 to eliminate the backlog of endowed chair programs at Oklahoma colleges and universities, which is a priority of his Economic Development Generating Excellence initiative (see the May 3, 2004 issue of the Digest). According to budget figures, $52 million in private donations was available for matching states funds for the program. However, the program was put on hold following a constitutional challenge by former head of Common Cause of Oklahoma Edwin Kessler and Oklahoma City attorney Jerry Fent, the Daily Oklahoman reports.

According to the challengers, the bonds created an unconstitutional debt, the article states. The Supreme Court disagreed, ruling that the bonds are payable only by the state regents and cannot become debts of the state.

Bonds will be issued by the Oklahoma Capitol Improvement Authority and may be sold as early as this month, providing needed funding to hire new faculty by next fall, said Maryanne Meletz, higher education vice chancellor for budget and finance, in the Tulsa World. The bill does not require additional appropriations to the state regents, but allows the regents to provide $7.5 million in its budget base as security for the bond.

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Semiconductor Industry Picks New York, California Sites for Nano Centers
In the Dec. 19, 2005 issue of the SSTI Weekly Digest, an editor's note highlighted the mega-investments several states are making to establish themselves as significant players in key research areas. New York's commitment to nanotechnology research in the Albany region, already in the hundreds of millions of dollars with the 2002 recruitment of Sematech North, was one of the examples mentioned.

Also in the nanotechnology area, we could have included California's $100 million investment toward the $350 million initial cost to launch the California Nanosystems Institute at UCLA in 2001. The balance of the funding was secured through federal and industrial sources.

In addition to the direct economic benefits received by injecting so much public money into a specific field in a concentrated geographic region, states like New York and California are banking on their seed dollars attracting additional industrial and federal funding, as well as creating spillover effects through company expansions, relocations to the area and new company creation.

The Dec. 8 announcement by the Semiconductor Industry Association (SIA) that it was establishing one of its two major nanoelectronics research institutes at the State University of New York-Albany, with the other based at UCLA, would suggest that both states' past investments are paying off.

Press materials from SIA do not mention the size of the awards, but past history within the sector would suggest the commitment will be sizable and sustaining. Collaborative research has been a defining characteristic of North America's semiconductor industry for more than two decades. For example, the Semiconductor Research Corporation, SIA's university-research arm, has funneled more than $500 million into competitive university research projects since its founding in 1982.

The new centers are:

New York Gov. George Pataki has announced he will request $80 million from the state legislature to be used, in part, to construct a 250,000 square-foot research facility in Albany. There are no indications that California pledged any funding.

More information regarding SIA's Nanoelectronic Research Initiative is available at: http://www.src.org/nri/default.asp?bhjs=0

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South Dakota Governor's '07 Budget Features Funding for Research Centers, Higher Ed
Increased funding for research centers, a laptop program, and investments in higher education were highlighted in South Dakota Gov. Mike Rounds' fiscal year 2007 budget address last month.

While the governor’s FY07 recommendation for Economic Development is $3.4 million, only a 3 percent increase over the budgeted FY06 amount, the Division of Research and Commerce would receive $4.8 million -- an increase of 37 percent over last year. Included in this amount is a $1 million increase to fund research centers under the 2010 Initiative and $280,000 to fund Centers for Entrepreneurship.

Gov. Rounds touted the 2010 Initiative, stating that over the last two years, the state’s $2.8 million investment into four research centers had a $21.4 million economic impact within the state. The Centers for Entrepreneurship, a new initiative proposed by the governor, would facilitate public and private partnerships to develop programs and activities that support young business leaders.

The governor also is asking for $13 million for the first year of a three-year, $39 million program to provide laptop computers to all high school students. He also requested an additional $1.8 million to expand three S&T related doctoral programs within South Dakota universities: the doctor of science and information systems program at Dakota State University; a joint-institution program within the South Dakota School of Mines and Technology and the University of South Dakota leading to a Ph.D. in biomedical engineering; and, a doctoral program in energy engineering at South Dakota State.

Gov. Rounds' FY07 Budget Report is available at: http://www.state.sd.us/bfm/budget/rec07/

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Arkansas Universities Plan to Move Ahead, Despite Failure of Bond Issue
Last month, voters in Arkansas narrowly rejected a major bond proposal targeting technology and capital upgrades in higher education and actively supported by Gov. Mike Huckabee, leaving many to wonder what went wrong.

Although the bonds package lost by only by a small margin -- unofficial results indicate 50.26 percent to 49.74 percent -- Gov. Huckabee said he would not raise the issue again with voters during his months left in office, according to the Associated Press.

Perhaps what might be most surprising and educational for Digest readers considering their own higher ed and tech-based economic development bond initiatives is the proposal failed in each of the counties that are home to a college or university, according to unofficial results reported by the Arkansas Democrat-Gazette.

Media reports from Arkansas suggest that voters may have been confused on the higher education bond issue because it was on the ballot along with a highway bond proposal, which was heavily opposed by many interest groups.

Recognizing the mood of the electorate and the other items on the ballot may be critical for determining strategies for success with bond measures in other states. In Ohio, for instance, a $500 million TBED bond failed when on its own, but passed easily this past fall when it was combined with a larger, more popular infrastructure bond measure. In Maine, however, with six bond initiatives on the ballot totalling $83 million last November, the $9 million higher ed bond issue was defeated by a margin small enough to trigger a recount.

Under Arkansas's higher education proposal, the bonds would not have exceeded $250 million, which included $100 million to restructure existing bonds and $150 million in new funding for technology and capital projects, according to the governor’s office. The program specifically targeted technology upgrades, which bond proponents argued are needed as enrollment has increased by 34 percent since the most recent bond issue in the 1990s, according to the governor’s office. Additionally, $10 million was earmarked specifically to connect Arkansas four-year schools to the high-speed Internet initiative, the e Corridor. The bonds would be paid off through the annual higher education appropriations from general revenue funding.

Despite the loss for colleges and universities, many campuses are planning to go ahead with upgrades, according to an article from the Arkansas Democrat-Gazette. University officials said they would probably turn to individual campus bond issues, which would have to be paid off with other revenues, possibly by increasing tuition and fees, the article states.

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Recent Research
Chicago Fed Looks at Higher Ed and Economic Growth
It is no coincidence that every article in this issue of the SSTI Weekly Digest touched on some aspect of higher education's role in promoting economic growth. Knowledge-based economies driven by innovation require strong and successful institutions of higher learning. Those same types of economies, particularly when applied on a global scale, present unique challenges to sustaining educational and research excellence with academia based on older models of financing and leadership.

Last November, the Federal Reserve Bank of Chicago held a one-day conference examining the future of higher education and economic growth. Two January Chicago Fed Letters by Richard Mattoon summarize the event, calling out one of the most troubling trends in America: "The perception of higher education as an important public good has eroded. Higher education is viewed by some as a private good with the benefits accruing to the student in the form of higher future wages and quality of life."

Both Chicago Fed Letters are available at: http://www.chicagofed.org/economic_research_and_data/chicago_fed_letter.cfm

Individual presentations made during the conference, which was cosponsored by the Committee on Institutional Cooperation and the Midwestern Higher Education Compact, may be downloaded from http://www.chicagofed.org/news_and_conferences/conferences_and_events/
2005_future_of_higher_education_agenda.cfm

Links to this paper and more than 3,000 additional TBED-related research reports, strategic plans and other papers can be found at the Tech-based Economic Development (TBED) Resource Center, jointly developed by the Technology Administration and SSTI, at http://www.tbedresourcecenter.org/.

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People

The Association of American Universities named Robert Berdahl as the association's new president.

The North Carolina Biotechnology Center selected John Chaffee and Randall Johnson as directors of the center's new eastern and southeastern regional offices.

Virginia Gov.-elect Tim Kaine named Aneesh Chopra as his administration's secretary of technology.

South Dakota Gov. Mike Rounds announced that Jim Hagen will resign as secretary of the Department of Tourism and State Development, effective Jan. 17.

David Hollister announced he will leave his position as director of the Michigan Department of Labor and Economic Growth on Feb. 3, to head Prima Civitas, a newly formed nonprofit agency promoting economic development.

Bill Mahoney is the new president of the South Carolina Research Authority.

Guin Robinson is the new director of the newly created Talladega office of the Alabama Technology Network.

Phillip Singerman resigned as executive director of the Maryland Technology Development Corp.. Renee Winsky will serve as interim executive director until a permanent replacement is named.

Georgia Tech announced that Dr. Jeffrey Skolnick will join its faculty this spring as the Georgia Research Alliance Eminent Scholar in Computational Systems Biology.

The Maryland Department of Business and Economic Development appointed Benjamin Wu as the assistant secretary for the Capital Region and senior advisor for technology policy.

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