In the November 13, 2006 Issue:

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 New Governors Make TBED and Economic Development a Priority
Last Tuesday's elections resulted in the selection of 11 new governors across the country, and could lead to important changes for TBED communities in many states. Six races resulted in a change of party affiliation in the top state position, including races in Arkansas, Colorado, Maryland, Massachusetts, New York and Ohio. All six governorships changed from Republican to Democratic administrations. This is the first time in 12 years that a majority of governors have been Democrats.
 
Incumbents won gubernatorial races in 25 states, and 14 governors did not face re-election this year.
 
But what changes are in store for the states with new leadership? Several of the governors-elect made economic development and TBED a part of their platforms throughout their candidacy. Here is a sampling of policies and programs announced by some of the governors-elect on their official websites as collected by SSTI:
 
Arkansas
Attorney General Mike Beebe (D) has proposed developing a series of regional community partnerships across the state to promote economic growth. Existing community partnerships in the state, the governor-elect says, have been successful in recruiting new employers by marketing regional assets and collaborating on infrastructure improvements. The incoming administration will favor communities that have demonstrated a commitment to regionalism when considering discretionary incentives and infrastructure funding. Beebe has also pledged to help find private partners to collaborate on biotech research conducted within the Arkansas University system.
 
Colorado
Denver District Attorney Bill Ritter (D) has a similar plan to implement regional development strategies in Colorado. His administration will establish State and Regional Economic Development Offices to conduct county research and analysis, recruit new businesses, and develop recruitment and information packages for new and existing businesses. Ritter has also released his New Energy Economy plan, which calls for the promotion of wind, solar, and biofuel industries to benefit rural areas, and for the creation of the Colorado Clean Energy Fund to provide seed money for alternative energy companies.
 
Iowa
Clean energy also will be a priority in Iowa, where Secretary of State Chet Culver (D) has proposed a $100 million Iowa Power Fund to support businesses attempting to enter the clean energy industry. Culver also favors a small public venture fund ($20 million to $25 million annually) to provide venture capital in underserved areas of the state. Entrepreneurial support will be available through a new Office of Small Business Development and Entrepreneurship, which will serve as a one-stop shop for training, advice and advocacy. Culver supports a repeal of the state's ban on stem cell research and will provide at least $10 million in funding for the Iowa Center for Regenerative Medicine in Iowa City to leverage life science growth and investment.
 
Florida
Attorney General Charlie Crist (R) has promised to develop the state's science, technology, engineering and math (STEM) programs as engines of high-tech growth. His administration will offer additional research funding to universities that focus or increase their focus on STEM education and research. Crist also plans to encourage public-private partnerships to implement the Sure Futures program, which would match businesses with students seeking advanced STEM degrees and offer employers a tax credit for hiring those graduates to work in the state.
 
Massachusetts
In Massachusetts, attorney and businessman Deval Patrick (D) plans to focus the state's investment in high-tech businesses on areas that have not benefited from recent growth along Route 128. State funds for start-up businesses will offer more favorable terms of repayment based on the number of jobs created by the new firm. New businesses that create new jobs in distressed areas of the state will owe substantially less. Patrick's administration also will issue bonds to invest in the expansion and development of facilities and new faculty at public universities to promote stem cell research and biotech commercialization.
 
New York
Applied research in New York may receive a boost from Attorney General Eliot Spitzers (D) planned New York State Innovation Fund. This program, if funded by a voter-approve bond act, would support research with a direct commercial application. The fund would support research with direct commercial applications, which the governor-elect says has been ignored by the state's Centers of Excellence.

Ohio
U.S. Representative Ted Strickland (D) will seek to unify Ohio's economic development efforts by requiring all state agencies that provide subsidies to businesses to publicly and comprehensively submit those activities for public and legislative review. In order to promote regional development, the new administration will oversee the creation of Regional Enterprise Networks and an Ohio Community Charter to encourage cooperation within regional economies. Strickland plans to dedicate $5 million to a statewide Urban Entrepreneur Partnership that would provide start-up consulting services and support greater inclusion within the entrepreneurial community. He also plans to establish four new "micro-incubators" to provide office space and shared computing resources for new businesses.

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Missouri Passes Embryonic Stem Cell Amendment
Voters in Missouri approved, 51 percent to 49 percent, an amendment to the state constitution that will prohibit state or local governments from preventing embryonic stem cell research. The amendment also defines what type of research is permitted.
 
The vote comes after years of controversy in the state with frequent attempts by some state legislators to restrict the research in the state. The amendment is the first of its kind in the nation to remove the issue from the legislature and put it directly to the voters.
 
The amendment will accomplish the following, according to the fair ballot language on the website of the Missouri Secretary of State:

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Dems Pick up Nine Legislative Chambers; GOP Picks up One
The wave that swept the Democrats into control of Congress manifested itself on the state level in the legislatures as well. Democrats took control of nine chambers, while Republicans picked up one. After Tuesday's election, the Democrats took control of the following chambers: Indiana House, Iowa House and Senate, Minnesota House, Michigan House, New Hampshire House and Senate, Oregon House, and Wisconsin Senate. Republicans picked up the Montana House.

Final results are still uncertain in the Pennsylvania House, where the Democrats hoped to regain control. As of Nov. 11, press reports indicated that Democrats had won 101 seats in the Pennsylvania House, the Republicans had won 99 seats and were leading in three other races.

As a result of the elections, Democrats will control both chambers in 23 legislatures, Republicans will control both in 15, and chambers will be split in 10 states. The total comes to 48 because of the uncertainty in Pennsylvania and Nebraska, which has a unicameral legislature.

Prior to the election, Republicans controlled both chambers in 20 legislatures, Democrats controlled both in 19, and chambers were split in 10 states.

With the party shift in governor's or legislative races, the Democrats now control the executive and legislative branches in 15 states (Arkansas, Colorado, Illinois, Iowa, Louisiana, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New Mexico, North Carolina, Oregon, Washington, and West Virginia). Republicans retain control of the executive and legislative branches in 10 states (Alaska, Florida, Georgia, Idaho, Missouri, North Dakota, South Carolina, South Dakota, Texas, and Utah).

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Higher Education Issues: Bonds and Affirmative Action Ban Pass
Last Tuesday's election included four ballot initiatives pertaining to the issuance of bonds for capital improvement projects at higher education institutions as well as a highly watched amendment to the state constitution in Michigan to ban public institutions from utilizing affirmative action practices. All five measures passed.

Arkansas
Voters approved 68 percent to 32 percent  Question 1, which will raise funds not to exceed $250 million in order to finance technology and facility improvement projects at institutions of higher education within the state.

California
A $10.4 billion bond measure, Proposition 1D passed 57 percent to 43 percent. The bond issue will be used to repair and upgrade buildings and classrooms at schools for all educational levels from kindergarten to community colleges to state universities in California.

 
New Mexico
Bond Measure B in New Mexico proposed to raise funds not to exceed $118 million for higher education capital improvements. Voters approved the measure 55 percent to 45 percent.
Rhode Island
Rhode Island's Question 4 was very specific in purpose, requesting $65 million to construct a new college of pharmacy building at the University of Rhode Island and $7.8 million for renovations to facilities at Rhode Island College. It passed overwhelmingly 62 percent to 38 percent.
Michigan
Michigan voters approved a constitutional amendment to ban public colleges and universities, community colleges, and school districts from using affirmative action programs for employment, education or contracting purposes. It also proposed to extend discrimination protection on the basis of gender and ethnicity, in addition to the existing prohibition on discrimination by race, color or national origin.
According to an article in The Chronicle of Higher Education, the University of Michigan president has already vowed to "immediately begin exploring legal action concerning this initiative." For higher education organizations within Michigan, the amendment is expected to affect recruitment, scholarship programs and student-support services.
The amendment passed with 58 percent of the vote. Michigan is the third state to restrict affirmative action at public institutions, after similar measures were passed in California in 1996 and Washington in 1998.

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Four States Reject Spending Restrictions; Tax Limitation Approved in Arizona
Five states voted on measures that would have the effect of limiting the growth of government expenditures or taxes. Four states rejected the measures, while Arizona narrowly approved its measure.

Arizona
Voters narrowly approved Proposition 101 on Tuesday by 10,400 votes, with 50.4 percent in favor and 49.6 percent against it. This amendment to the state constitution will limit the increase of property taxes for counties, cities, towns and community college districts to two percent each year.

Maine
Voters rejected 54 percent to 46 percent a bill that would impose expenditure limitations on the state and local government. Under this proposal, growth for state school administrative units and educational institutions would have been indexed to inflation and the changes in student enrollment. Any future increase in tax revenue would have needed to be approved by two-thirds of the jurisdiction's legislative body and the voters of the jurisdiction.

Michigan
Another variation of indexing future expenditures was found on the ballot in Michigan. In this case, after an initial expenditure increase, subsequent annual funding changes would be equal to the rate of inflation. Voters rejected Proposition 5 in Michigan 62 percent to 38 percent. The law intended to increase current funding for education purposes by $565 million.

Nebraska
Nebraska's Measure 423 was a constitutional amendment to limit state spending based on previous appropriations, the rate of inflation, and population change within the state. It failed by a wide margin, with 70 percent of voters rejecting the amendment.

Oregon
Measure 48 was another constitutional amendment that failed by a large amount, with 71 percent voting against the amendment and 29 percent approving it. The measure would have pegged the state's budget to the change in future population and inflation rates. The limitation could have been overridden with a two-thirds vote of both the Oregon House and Senate and subsequent approval by a majority of the voters.

Last year's SSTI 2005 Elections Review described extensively the history of tax or expenditure limitations (TELs) in the country. It is available at: http://www.ssti.org/Digest/2005/111405.htm#TABOR

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Renewable Energy Measure Approved in Washington, Fails in California
Two states had measures on the ballot to address energy conservation and encourage alternative energy production and technology. While Washington's measure passed, California's failed.
 
Washington's Initiative 937 will result in targets for energy conservation and use of renewable energy resources for all electric utility companies that serve more than 25,000 customers in the state. Electric companies will required to provide 3 percent of total electricity to its retail customers from renewable resources by 2012, with that percentage eventually increasing to 15 percent of total electricity distribution by 2020.  Renewable resources include wind farms, solar panels and geothermal plants. This initiative passed 52 percent to 48 percent.
 
California's initiative proposed to levy a tax on oil extracted within the state to fund a new program whose goal is to reduce petroleum consumption by 25 percent, promoting incentives for alternative energy and more efficient technologies, and encouraging education and training. Anticipated revenues from this tax were estimated to be between $225 million and $485 million each year.  The initiative failed 55 percent to 45 percent.

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Manufacturing Assistance Approved in Oklahoma
Voters in Oklahoma approved 54 percent to 46 percent State Question 725, which was intended to provide financial assistance to "high-risk" manufacturers in the state, in order to minimize the possible loss of employment. Funds provided to each manufacturer by the state would be limited to 10 percent of the manufacturers in-state capital investment. The source in the budget for this initiative would be Oklahoma's Rainy Day Fund, which can only be accessed when the fund is at least $80 million, and annual funding would be limited to $10 million total.

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Job Corner
Delaware ETC Seeks Executive Director
The Delaware Emerging Technology Center (ETC) is seeking an individual to be the center's inaugural executive director. The ETC is a public-private partnership focused on providing services and working to tailor programs to the unique needs of technology businesses and entrepreneurs in the state. Compensation is commensurate with experience and includes an attractive incentive package. A full description of this opportunity and others is available through the SSTI Job Corner at http://www.ssti.org/posting.htm.

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