OR Legislature Provides Level Funding for Innovation Efforts, Adopts Strict Higher Ed Policy

The 2011-13 biennial budget for the Oregon Business Development Department recently approved by lawmakers allocates $16 million for the Oregon Innovation Council (Oregon InC), the same amount as last biennium, but short of the $19 million requested by Gov. John Kitzhaber to broaden research and technology transfer programs.

Funding for Oregon InC is provided through lottery revenues and is divided among six signature centers and programs dedicated to growing the state's innovation economy. Funding in 2011-13 will be distributed as follows:

• $5.2 million for the Oregon Nanoscience and Microtechnologies Institute (ONAMI)
• $3.8 million for the Built Environment and Sustainable Technologies Center (BEST)
• $2.8 million for the Oregon Translational Research and Drug Development Institute (OTRADI)
• $2.5 million for the Oregon Wave Energy Trust (OWET)
• $1.2 million for Drive Oregon
• $0.5 million for the Northwest Food Processors Innovation Productivity Center

The approved budget adds $8.95 million in lottery funds to the Strategic Reserve Funds (SRF) within the Oregon Business Development Department. This brings total support for new SRF commitments to $15 million in lottery funds and other funds, budget documents note. Up to $4 million may be used for a new Business Retention and Expansion Program designed to incentivize businesses that hire 50 or more high-wage workers. This is $1 million less than the governor's recommendation.

With a projected shortfall of nearly $3.5 billion at the beginning of the session, lawmakers targeted several of the state's tax credits for reduction, including the R&D tax credit. Many of the tax credits up for review in HB 3672 were spared, but pared down. For example, investors in R&D will be able to claim a maximum credit of $1 million, down from $2 million. The legislation also extends the sunset date on the R&D tax credit another six years.

Earlier this month, lawmakers passed a bill (SB 253) declaring the mission of Oregon's education system to ensure that by 2025: 40 percent of adults have a bachelor's degree or higher, 40 percent have earned an associate's degree or post-secondary credential, and the remaining 20 percent have a high school diploma or equivalent. In comparison, 30 percent of all U.S. adults 25 and older have obtained at least a bachelor's degree, according to the latest Census Bureau data. At the same time, lawmakers approved an 11 percent reduction to the Oregon University System and tuition increases are expected to be as high as 9 percent in some schools (see the June 15, 2011 issue of the Digest)