With Connecticut's Budget Passed, Last Nail in 2009 State TBED Merger Proposals

This year as states were wrestling with significant deficits, several proposals to consolidate TBED initiatives with other units of government emerged. The most recently decided was in Connecticut, where the General Assembly did not move forward with a plan to merge the state's two primary financing agencies, Connecticut Innovations and the Connecticut Development Authority to form a new Connecticut Economic Innovations Authority. Gov. Jodi Rell had proposed the consolidation.

Governors in New York, Kansas, and Hawaii also outlined similar restructuring plans for the New York State Foundation for Science, Technology, and Innovation, the Kansas Technology Enterprise Corporation, and Hawaii's High Technology Development Corporation, respectively. As in Connecticut, none of the proposals were approved by the states' legislatures. In New York and Kansas, the stand-alone lead TBED organizations were proposed to be consolidated into the states' conventional economic development departments. In Hawaii, HTDC was to become part of the University of Hawaii system.

TBED Sees Cuts in Connecticut
Following several months of debate over how to fill a projected $8.5 billion deficit, Connecticut legislators passed the 2009-11 biennial budget, which became law without the governor's signature. Opposing several tax increases, the governor refused to put her stamp of approval on the enacted budget, which raises the state income tax for individuals earning $500,000 a year and couples earning $1 million a year. Additionally, the budget levies a 10 percent income tax surcharge for three years on the largest companies and raises the cigarette tax by $1 per carton, reports Bloomberg.com.

Most technology-based economic development programs will receive slight reductions in funding over the next two years. Biennial appropriations within the Department of Economic and Community Development include:

• $1.6 million for CONNSTEP ($400,000 less than last biennium), which provides consulting and training solutions for Connecticut's manufacturing industry;
• $1.3 million for the Small Business Incubator program ($700,000 less than last biennium);
• $800,000 for the Connecticut Center for Advanced Technology (CCAT) Manufacturing Supply Chain, which provides services to help small- and medium-sized manufacturers remain competitive;
• $475,000 for Hydrogen/Fuel Cell Economy ($25,000 less than last biennium);
• $270,750 for Entrepreneurial Centers ($14,250 less than last biennium); and,
• $200,000 for CCAT Energy Application Research ($250,000 less than last biennium).

Within the Office of Workforce Competitiveness, $400,000 is included for a nanotechnology study, down from $600,000 approved last biennium, and $300,000 was approved for SBIR matching grants, down $200,000.

Legislators did not pass the governor's proposal to create a new Middle College System. HB 6370 would have merged the vo-tech high school and community college systems within the state's Office of Workforce Competitiveness and allow high school students to earn up to 49 college credits by the time they enter college.

The enacted 2009-11 biennial budget is available at: http://www.cga.ct.gov/2009/ACT/Pa/pdf/2009PA-00003-R00HB-06802SS1-PA.pdf.

The Future of State TBED Programs
As this story points out, state TBED portfolios are being tested by the depths of the current recession. Connecticut wasn't alone in being forced to reduce its innovation investments this year. Everyone is feeling the pinch. So where do state programs go from here? Several highly interactive plenary sessions and provocative breakout sessions at SSTI's upcoming annual conference will explore this very question. Join the brightest minds and leaders of state and regional TBED for the answers on Oct. 21-23. More information is available at: http://www.ssticonference.org.