In the February 6, 2006 Issue:

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Florida Governor Requests $630M for TBED, Other ED
With state revenues posting a surplus, Florida Gov. Jeb Bush used his 2006-07 budget proposal to make his largest request yet to support efforts to diversify the state's economy through technology-based economic development (TBED). In total, the budget provides $630 million for several new research-focused initiatives, business recruitment funds, and other economic development programs.

The governor's funding recommendations focus on growing science and technology-based jobs and industries, investments in the space industry, and developing funds to support innovative start-up companies, and include:

In addition, Gov. Bush is recommending $1.6 million for high-impact performance incentives for biomedical research, $4.3 million for international programs that encourage international trade, and $24.3 million for the Qualified Target Industry tax refund program to provide tax refunds to new or expanding corporate headquarters and R&D facilities and businesses in key industrial sections.

Enterprise Florida, the state's office for traditional economic development approaches of business recruitment/retention, international trade and marketing is slated to receive $12.5 million in the governor's 2006-07 budget request.

Gov. Jeb Bush's FY 2006-07 Budget Recommendation is available at http://www.ebudget.state.fl.us/.

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Pennsylvania Gov: $500M for Bioscience Research Initiative
Pennsylvania Gov. Ed Rendell is set to release his fiscal year 2006-07 budget request later this week, which is expected to significantly redesign the state's investment in biotechnology and life science research, according to materials released by the governor's office.

Since passage of Act 77 in 2001, the Pennsylvania Department of Health (PDEH) has used 19 percent of the state's tobacco settlement funds to fund biomedical-related research projects through the Commonwealth Universal Research Enhancement (CURE) program. The program provides formula and competitive grants to universities to support research priorities set by PDEH.

Gov. Rendell is proposing that the Commonwealth borrow $500 million to finance a new bioscience research initiative named after the late Pittsburgh scientist, Dr. Jonas Salk. The governor proposes to maintain half of CURE's funding level, but use the other half - or just under 10 percent of the state's share of tobacco settlement funds - to repay the bonds. The move is expected to provide greater flexibility in the use of the funds and hasten any economic development opportunities resulting from commercialization of research results.

If the request is approved by the legislature, the Salk Legacy Fund would provide dollar-for-dollar matching grants to the state's leading bioscience researchers in academia and industry. The fund would be administered by the Jonas Salk Legacy Fund board, to be comprised of university, medical research, bioscience, and public agency representatives.

Nearly $100 million of the $500 million pool would be used in "starter kits" to help academic medical centers, research colleges, and universities buy the necessary tools and machines to conduct investigations and experiments. The remaining $400 million would be used for grants and awarded to companies and institutions planning to build laboratories and incubators.

Gov. Rendell's budget is expected to be submitted to the legislature on Wednesday, Feb. 8. More information is available at: http://www.state.pa.us/papower/cwp/view.asp?A=11&Q=449550

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Missouri Unveils $450M TBED Strategy
Not all of the pieces critical to building an innovation-based economy have to cost hundreds of millions of dollars, as might be suggested in the Florida and Pennsylvania stories above. Gov. Matt Blunt's Feb. 2 call for the state to provide $2 million for a new Missouri Life Science Incubator - designed to help researchers move their science from the laboratory to commercial businesses - provides a case in point. The proposed facility would be located on the University of Missouri-Columbia campus.

The $2 million investment is a new part of the governor's $450 million Lewis and Clark Discovery Initiative, which already includes proposals for two other life sciences facilities at the University of Missouri-Columbia. The first is a new $150 million Health Science Center designed to grow the university’s research base and second is a $15 million plant science research center that will seek to develop and enhance plant-based products.

Gov. Blunt proposed the Lewis and Clark Discovery Initiative for the state to invest $450 million for capital improvement projects, new scholarships and endowed professorships at universities throughout the state through the sale of assets from the Missouri Higher Education Loan Authority (MOHELA).

The MOHELA board last week approved placing select assets for sale on the open market, with the exclusion of loans MOHELA backs for Missouri college students. The action is expected to generate $300 million for capital improvement projects, $100 million in student scholarships, $30 million to enhance the growth and development of technology businesses near college campuses, and $20 million for endowed professorships at universities across the state.

Another component of the Lewis and Clark Discovery Initiative would have Missouri provide assistance to help the state's academic institutions bring technologies into the global market through the Missouri Discovery Alliance. The Missouri Discovery Alliance is designed to maximize the economic impact of science and technology in Missouri by attracting and retaining life science companies and to help develop commercial applications for research. The major funding source for the alliance would be a $5 million endowment set aside through the Lewis and Clark Discovery Initiative.

More information is available at: http://www.gov.mo.gov/press/LewisandClarkInitiative012606.htm Projects to be funded in 2007-08 through the Lewis and Clark Discovery Initiative are listed at: http://www.umsystem.edu/ums/departments/gr/newsletter/060127/01-27-06AllocationPlanFinalII.pdf

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New York Considering $200M for Biotech, Biomed
On Jan. 26, New York Gov. George Pataki and State Senate Majority Leader Joseph Bruno announced legislation to create a $200 million Biotechnology and Biomedicine Research Initiative through the New York State Charitable Assets Foundation.

The new program would provide challenge grants that are expected to generate an additional $600 million in federal, nonprofit and private sector matching funds to expand biotechnology and biomedicine R&D at public and private academic and nonprofit biomedical research institutions throughout the state.

First announced in the governor’s 2006 State of the State Address, the proposed legislation would establish a two-part $200 million program through the foundation. The proposal allocates $40 million of capital funding - already authorized to finance equipment costs of this initiative - and $160 million to recruit the most talented researchers and scientists and acquire the necessary technology and equipment, among other purposes. Applicants would have to provide a three-to-one match for the funds, which would spur a total research investment of $800 million.

The Charitable Asset Foundation was established in January 2002 when Empire Blue Cross Blue Shield converted from a nonprofit to a for-profit company. As part of this conversion, the company, WellChoice, issued all of its authorized stock to the newly created New York Public Asset Fund and the Charitable Asset Foundation. The fund was established to receive 95 percent of WellChoice’s value and the foundation, a New York nonprofit, received the other 5 percent.

The foundation was formed as a charitable trust to dedicate the remaining 5 percent to expand or create a variety of health care programs that deliver services that improve public health as well as identify health care needs and develop solutions to address those needs. Original projections for the foundation’s assets were between $50 million and $100 million. However, due to the increased revenue generated by the conversion, the foundation now has approximately $260 million.

To help distribute the grants, the governor and Senate’s legislation would create two boards within the Charitable Asset Foundation:

The Biomedicine Advisory Board and the Bioethics Advisory Board will each be comprised of 13 members appointed by the Governor, the President Pro Tem of the Senate and the Speaker of the Assembly.

More information is available at: http://www.ny.gov/governor/press/06/0126062.html

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DOL Announces WIRED Awards
The U.S. Department of Labor (DOL) recently announced the 13 recipients for one of the most anticipated new federal workforce programs to be launched in several years. The $195 million Workforce Innovation in Regional Economic Development (WIRED) program attempts to integrate human capital issues of talent and skill development into larger technology-based economic development strategies. While that in itself is seemingly unique for a federal initiative, WIRED also requires regional cooperation that crosses political jurisdictions and traditional organizational missions.

Each of the 13 regions will receive approximately $15 million in funding over three years to support strategy development, regional network formulation and plan implementation:

Award criteria included:

In addition to the $195 million in awards, the Department of Labor's Employment & Training Administration will create a WIRED Academy to share successes and challenges between selected regions and capture that knowledge for other regions.

More information about WIRED, including project summaries for the 13 selected regions, is available at: http://www.doleta.gov/

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Recent Research
Cities' Fiscal Condition Improves, But at Cost
Despite overall signs of improving fiscal health in 2005, half of the nation’s cities have been forced to raise new revenues to address gaps created by rising employee health care and pension costs, as well as increases in public safety and infrastructure needs, according to a National League of Cities (NLC) survey released last week.

Results from City Fiscal Conditions in 2005 show that nearly half (48 percent) of the cities surveyed increased fees and charges for city services in order to balance budgets in 2005. Only 26 percent say they relied on increases in property taxes, while even smaller numbers increased sales tax rates, income tax rates and other tax rates.

For the first time since 2001, city fiscal conditions are showing improvements. But ongoing revenue constraints and concerns over potential declines in property tax revenues resulting from slowing real estate markets leave many city officials cautious as they draw up their budgets for 2006.

Findings from the survey include:

City Fiscal Conditions in 2005 is a national mail survey of finance officers in U.S. cities. Survey data was drawn from 276 cities, with a representative sampling across city size. This is the 21st year that NLC has conducted the survey.

The eight-page report is available at: http://www.nlc.org/content/Files/RMPctyfiscalcondbrf05.pdf

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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Recent Research
New Jobs Come with Shrinking Paychecks, Report Finds
Many Wall Street analysts reacted to last month's jobs numbers with fears of inflation, but a new report released by the U.S. Conference of Mayors Jan. 27 finds those new jobs often are associated with smaller paychecks than those before the last recession. A declining standard of living is not a goal for any state or local economic development program, so the findings present new challenges on how to create higher wage jobs in the future.

The Metro Economy Report found jobs created after the 2003 recession have paid working Americans about $9,000 less annually than the jobs lost during the recession. The report, released at the organization's annual winter meeting, showed that the 10 sectors that lost the most jobs through the end of 2003 paid an average wage of $43,629, while the 10 sectors with the largest increases in employment in 2004-2005 paid only $34,378, a staggering 21 percent decline.

The wage gap has resulted from the combined effects of the loss of high-paying jobs, especially in the durable manufacturing industries, and post-recession employment growth that has been concentrated in services sectors that have lower wage levels.

While the report indicates that the nation as a whole has regained the jobs it lost during the recession, labor markets have not improved uniformly across the country. By the end of 2004, 220 of the nation's 361 metros had regained jobs lost in the recession. In 2005, an additional 24 metros are projected to have reached their peak employment. Yet only 18 will regain employment levels in 2006, including the major metro areas of Atlanta, Dallas-Fort Worth, Kansas City, New York, Seattle, and St. Louis, leaving 99 metros slated to regain their lost jobs during the 2007-2015 period.

The report is available at: http://www.usmayors.org/74thWinterMeeting/metroeconreport_January2006.pdf

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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