A few federal entities have provided insight into how they will procedurally target and expedite their stimulus spending. Last week, Energy Secretary Steven Chu released guidelines to improve his department’s ability to issue direct loans, loan guarantees, and other forms of funding. As a recipient of $39 billion in stimulus funds (compared to a FY08 budget of $24 billion), the DOE has a goal to disperse 70 percent of its stimulus funds by the end of next year. Some of Secretary Chu's reform items include:

• Institute rolling appraisals of applications, reviewing them soon after submission;
• Offer applicants the ability to pay up-front fees after a loan is approved;
• Restructure credit subsidies to enable payment over the life of the loan;
• Hire additional staff to process applications; and,
• Produce a website to both provide transparency and guide applicants though the process.

Earlier today, the NIH’s Acting Director Raynard Kington released a statement that the agency expects “to spend as much as possible” of the stimulus funds in the current fiscal year. Additionally, Kington stated research funds will be distributed by the NIH in several ways: funding previously submitted grant applications judged to be highly meritorious, but ultimately not funded; awarding new R01 grants that can make progress within a two-year period; supplementing existing grants either to “competitively expand the scope of current research awards or supplement an existing award with additional support for infrastructure”; and, offering new challenge grants to support cross-cutting research.

Last Wednesday, February 18, Peter Orszag, Director of the White House Office of Management and Budget (OMB) released his office's first installment of guidelines to all agencies and departments receiving funds from the stimulus bill, as well as sections of the executive branch involved in the administration of stimulus funds. The OMB document calls for a number of timely actions, which include:

• Starting immediately, all funds from the stimulus must be distinguishable from non-recovery funds for reporting and financial reasons;
• By February 25, affected agencies must have a dedicated page on their website for monitoring recovery efforts;
• Starting March 3, agencies must submit weekly reports to the OMB, which include major actions taken to date, planned actions, and a breakdown of funding;
• By May 1, agencies must provide a “Recovery Plan” that outlines the agency's road recovery goals and coordinating efforts, and a “Recovery Program Plan” for their components within the stimulus;
• Starting on May 8, detailed monthly financial reports on obligations, expenditures, and award data must be submitted.

Regarding the determination of grant recipients from the stimulus, the OMB makes clear that awards should be made on a competitive basis, even though the funds are to be distributed as quickly as possible. State agencies may wish to conduct limited competitions among high-performing projects instead of full and open competitions. Additionally, because of the drive for greater transparency and tracking, OMB recommends the exclusion of supplements to existing grants. NIH’s intent to award some supplements seems to conflict with OMB’s guidance.

The first round of OMB guidelines regarding the stimulus can be accessed at: http://www.whitehouse.gov/omb/assets/memoranda_fy2009/m09-10.pdf

DOE Secretary Chu's announcement on spending reform can be accessed at: http://www.energy.gov/news2009/6934.htm

Today’s statement from the Acting Director of the NIH can be accessed at: http://www.nih.gov/about/director/02252009statement_arra.htm

The governor’s 2009-11 biennial budget dedicates $8.2 million in FY11 to the Wisconsin Institute for Discovery for research in biotechnology, nanotechnology and information technology. First proposed by Gov. Doyle in 2004 as part of the Grow Wisconsin plan, the Institute was established to strengthen the state’s position in science and technology (see the Nov. 22, 2004 issue of the Digest). A private donation of $50 million in 2006 launched the project, which was followed by a $50 million donation from the Wisconsin Alumni Research Foundation and matched by $50 million from the state. Construction is estimated to be completed in 2010.

The budget also includes $8 million over the biennium to establish University of Wisconsin (UW) Bioenergy Initiatives at the Madison, Stevens Point and River Falls campuses. These initiatives will explore the potential of bioenergy through biomass process, converting biomass into energy products, developing a sustainable energy economy, and developing enabling technologies for bioenergy research, according to budget documents. Another $2 million in FY10 would be allocated to establish the Wisconsin Genomics Initiative, a collaboration of the Marshfield Clinic, Medical College of Wisconsin, University of Wisconsin School of Medicine and Public Health, and UW-Milwaukee announced last October (see the Oct. 20, 2008 issue of the Digest).

In addition to the proposed R&D investments within the state’s institutes of higher education, Gov. Doyle is recommending $15 million to fund competitive salaries for high-demand faculty at UW campuses and $25 million to establish a funding base for Wisconsin Covenant Grants. The first class of eligible students, who may receive loans and subsidies for maintaining a B grade average, will enter into the higher education system in the fall of 2011. An initial endowment of $40 million was pledged in 2007.

Budget documents note that no additional funding is available to expand the efforts of the UW System Growth Agenda, which was funded by the legislature last biennium (see the Oct. 31, 2007 issue of the Digest).

Several tax credits aimed at stimulating the state’s economy through job creation and investments in R&D are recommended in the budget proposal. They include:

• Raising the cap on Act 255 tax credits for angel investments from $1 million to $4 million (see the Feb. 11, 2009 issue of the Digest). This is expected to reduce the general fund taxes by $7 million in FY11;
• Providing income tax credits to business that increase R&D spending to more than 125 percent of their average spending on R&D over the previous three years. This credit is expected to reduce income tax revenue by $5 million in FY11;
• Creating a Jobs Tax Credit that encourages businesses to locate in Wisconsin and create high-wage jobs by providing a tax credit for 10 percent of full-time payroll costs, up to a statewide total of $10 million per year beginning in 2012; and,
• Exempting purchases of machinery and equipment in the biotechnology industry beginning in 2012, reducing sales tax by $5 million per year in the 2012-14 biennium.

To encourage business growth in emerging fields, Gov. Doyle wants to create a venture network fund assisting entrepreneurs in obtaining capital. Under the proposal, the Department of Commerce would provide grants to research institutions and nonprofit organizations to expand access to capital networks and create networks and events that connect businesses with capital. The fund also would be used to provide matching grants to fund new business ideas. The governor recommends $1.4 million each fiscal year to establish the fund.

Gov. Doyle’s 2009-11 budget is available at: http://www.doa.state.wi.us/debf/execbudget.asp?locid=3.

The executive budget unveiled last week provides $1.4 billion in total funds for the newly reorganized Department of Energy, Labor and Economic Growth, with nearly half dedicated for workforce training. Gov. Granholm signed Executive Order 2008-20 in October, consolidating all activities related to the energy sector into the Department of Labor and Economic Growth. Energy programs and regulation are funded at $123 million in the FY10 budget proposal, which includes funding for an initiative to train workers for green jobs.

The governor recommends level funding ($15 million) for the No Worker Left Behind Initiative, a program that provides financial assistance for training programs or up to two years’ tuition at any Michigan community college or university for training in high-demand occupations. When established in 2007, the governor outlined the program’s ambitious goal to train 100,000 workers in three years. In August, the governor’s office reported that 11,000 participants had completed training (see the Aug. 6, 2008 issue of the Digest).

The Michigan Strategic Fund, administered by the Michigan Economic Development Corporation, is slated to receive $163.7 million in FY10, an increase of $11.1 million over last fiscal year. The 21^st Century Jobs Fund would receive $75 million – up from $65 million approved in FY09. This fund supports job creation in emerging fields such as renewable energy, life sciences, homeland security and advanced manufacturing by investing in basic research at universities and providing access to capital.

Faced with a proposed 3 percent reduction in their operating budgets, the state’s 15 universities are asked to freeze tuition for the next academic year. Gov. Granholm also proposed combining the Michigan Agriculture Experiment Station, which supports the research projects of more than 300 scientists at Michigan State University, and the Cooperative Extension Service. Funding for the programs would be cut in half under the proposal, according to The Detroit News. Community colleges are spared from cuts in FY10, in recognition of their role to provide job training.  

Gov. Granholm’s FY10 budget proposal and related documents are available at: http://www.michigan.gov/budget.

Tennessee

Gov. Phil Bredesen, State of the State Address, Feb. 9, 2009

“While we are interested in a broad range of business, there is one area where we have a great toehold and prospects, and that is the area of clean energy technology. …

“… We are extraordinarily well-positioned here and in the next couple of years, I want to wrap this up even tighter. Here’s an idea about how we might go about that: develop a Solar Institute in Tennessee that is the basic research leader in making solar power practical. …

“… I ask each of you: the General Assembly, the private sector, our university system, and Oak Ridge to work with me in the months ahead to invent a way to become a national leader in basic solar research – to invent a solar institute. If we can, it will pay huge dividends to our state and our citizens for decades to come.”

West Virginia

Gov. Joe Manchin, State of the State Address, Feb. 11, 2009

“Tonight, I am introducing a bill, called the Alternative and Renewable Energy Portfolio Act, which will put West Virginia at the forefront of new energy development. It sets a realistic timeframe for us to develop alternative and renewable energy resources. …

“… Our bill will provide incentives to locate new alternative energy facilities in West Virginia, which will encourage the development of renewable energy resources and create jobs in the Mountain State. …

“… With the growth of wind technology, by recycling waste heat from our industrial facilities, by cultivating biofuels like switchgrass, by harnessing the power of our rivers and the sun, and by expanding our clean coal efforts, we can meet our energy needs, create new jobs and improve our environment at the same time. …

“… It will encourage private investment in renewable energy sources, including solar, wind, biomass, hydropower, waste heat recovery and even landfill gas. It is another step toward expanding our state’s energy portfolio. …

“… One new technology that has promise is carbon capturing. … This week I will present a bill that will allow for permits for carbon sequestration projects. It will establish regulations for monitoring carbon sequestration sites and clarify ownership of the space in which the carbon is stored. Carbon sequestration is not the only solution to controlling power plant emissions, but we should explore its potential.”

The Canadian Research Chairs program supports the recruitment and retention of up to 2,000 star faculty in a broad range of scientific and technological disciplines, all with significant importance to the nation’s economy. Since 2000, the Canada Research Chairs Program has invested between $200 million and $300 million annually to attract and retain some of the world's most accomplished and promising minds.

With the new announcement more than 1,900 chairs are currently supported by the program’s awards. More than 30 percent of the Research Chairs have been recruited from outside of Canada, including 366 from the U.S. (some expatriates are included in this figure).

“Our government recognizes the important role that research excellence plays in furthering innovation and competitiveness, two main elements in our science and technology strategy,” noted Minister of State Goodyear.

With one-ninth of the U.S. population and current currency exchange rates, the $120 million the Canadian government invested in the Canadian Research Chairs program during this funding cycle alone is the equivalent of the U.S. federal government spending $900 million (USD) for innovation-driven faculty positions.

More information on the Canadian Research Chairs program is available at: http://www.chairs.gc.ca/web/home_e.asp

TechColumbus, Central Ohio's advocate for tech-based economic development, has partnered with the Ray and Barney Group to conduct an executive search for a vice president for finance and administration. The position reports to the president & CEO and is responsible for leading and executing the finance and administration functions of TechColumbus. The ideal candidate should have five to ten years of experience in leadership roles, strong leadership skills, and be a flexible and collaborative team player with a hands-on management style.