SSTI Digest

Now that many governors have signed spending bills and legislative sessions are drawing to a close, the SSTI Digest will check on the status of proposals related to the innovation economy, and examine the state of technology-based economic development funding in the states. This week, we review spending bills in Alaska, Connecticut, Louisiana, South Carolina and Vermont.

Alaska
On June 30, following a second special legislative session, Gov. Bill Walker signed a $9.8 billion (HB 2001) FY16 budget. The governor, however, vetoed $200 million in tax credits, which will delay payment to the state's oil and gas companies.

The budget allocates $5.2 million for Community and Regional Affairs and $1.6 million for Economic Development. The campuses of the University of Alaska are slated to receive $247.5 million, with $785,900 for its Small Business Development Center.

Over the past few months, SSTI has followed proposals issued by governors in their budget requests, State of the State Addresses, Inaugural Speeches and other events. Now that many state legislatures have begun approving budgets, the Digest will check on the status of these proposals, and examine the state of technology-based economic development funding in the states. This week, we review actions in Alaska, Colorado and Indiana.

Alaska
The Alaskan legislature reached a fiscal year 2016 operating budget agreement earlier this week (HB 72), but were unable to close a $3 billion gap. Gov. Bill Walker convened a special session on Wednesday to demand that lawmakers find a way to balance the budget.

Under the current agreement, legislators allocated $3 million for economic development and $11.5 million for an eighth round of renewable energy project grants through the Alaska Energy Authority.

As the outlook for general revenue funds improves in many states, governors are looking to boost investment in higher education and STEM as a means for growing the economy and enhancing the workforce. Universities' economic return to states can be quite impactful. A recent study commissioned by the Presidents Council, State Universities of Michigan, found the state's 15 public universities have a $23.9 billion economic footprint — collectively supporting more than $12 billion in earnings in 2012. Governors in Alaska, Missouri, Utah, Virginia, and Washington recently unveiled budget recommendations for the upcoming fiscal year or biennium calling for additional funds to support university-based initiatives including research, infrastructure, tuition freezes, and funding to graduate more students in STEM fields.

As many states near the mid-point of their 2012 legislative sessions, we thought it would be a good time to take a look at some of the bills advancing in statehouses that could impact states' efforts to improve economic conditions. Several states are seeking to advance access to capital initiatives as they continue to struggle with declining revenue and tight credit restrictions. The following overview provides a sampling of TBED bills supporting access to capital, R&D enhancements and higher education standards.

Providing Access to Capital

The Arizona Senate approved last month a bill to empower the state to facilitate $250 million in loans to manufacturers and other businesses by allowing third parties to sell income and insurance premium tax credits to venture capital firms, banks and other lenders, reports The Arizona Capitol Times. Supporters say the program, which has been employed at the federal level over the last decade under the New Markets structure, has been adopted successfully by nine other states. The measure awaits action in the House.

The second installment of SSTI's Tech Talkin' Govs series includes excerpts from speeches delivered in Alaska, Colorado, Missouri, and New Mexico. Our first installment was in the Jan. 11 Digest. Alaska Gov. Sean Parnell, State of the State Address, Jan. 19, 2012 "I also thank you for working with me to create a merit scholarship that gives all Alaska's children an incentive to complete a more rigorous high school curriculum. ... "... In its first year, this scholarship has been a remarkable success. Now we must secure it for future years. This legislative session, let us take the $400 million that we set aside last year, and build a strong fence of moral obligation around it. Let us create a fund for that money so the fund's earnings can pay for these scholarships for future generations." Colorado Gov. John Hickenlooper, State of the State Address, Jan. 12, 2012 "We established the Colorado Innovation Network (COIN) to foster collaboration and idea-sharing across private sector, academic and public lines, including the 29 research laboratories in Colorado. ... "...

To ensure funding is available in future years for students who complete a more rigorous high school curriculum focused on math and science, the legislature set aside $400 million for performance-based scholarships in the capital budget. The FY12 operating budget also includes $6 million in first-year funding for the program, which will be available to high school students graduating in 2011. Lawmakers last year passed legislation establishing the Alaska Merit Scholarship Program, but failed to provide a funding source (see the April 28, 2010 issue of the Digest). High-performing students, including those taking four years of math and science, are eligible for the scholarships, which provide up to $4,755 annually for postsecondary education and job training. The educational endowment was first proposed by Gov. Sean Parnell in 2009.

Proposals that promise job creation and economic growth have taken center stage in several state legislatures. Lawmakers who recognize the importance of R&D, tech commercialization, access to risk capital, and investment in higher education are fighting for passage of TBED-focused bills in the final months of their states' 2011 legislative sessions. A bill to revive the Missouri Science and Innovation Reinvestment Act, which failed in the legislature last year, recently passed the House with broad, bi-partisan support, restoring hope for the program that aims to grow science and technology companies. Meanwhile, two bills in Connecticut seek to boost technology transfer and lawmakers in Alaska and Florida are pushing for statewide R&D tax credits. An overview of select bills relating to TBED is included below.

The fourth installment of SSTI's Tech Talkin' Govs series includes excerpts from speeches delivered in Alaska, Delaware, Hawaii, Michigan, Missouri, Nevada, and Vermont. The first three installments are available in the Jan. 5, Jan. 12 and Jan. 19 issues of the Digest.

Two measures, one dealing with improving access to higher education in Alaska, and another focusing on economic growth through renewable energy in Nebraska, recently were approved as part of the 2010 legislative sessions. Lawmakers in Alaska passed a measure establishing a merit-based scholarship program championed by Gov. Sean Parnell, but left funding for the program uncertain. Meanwhile, Nebraska legislators passed a bill to promote economic growth through renewable energy export.

Alaska
Lawmakers passed a measure creating a merit-based scholarship program for higher education that includes many of the same elements proposed last year by Gov. Sean Parnell, with the exception of a funding mechanism. SB 221 establishes the Alaska Merit Scholarship Program providing grants for students who complete a more rigorous high school curriculum, including four years of math and science. Legislators scrapped a plan proposed by the governor that would have allocated $400 million to initiate the program by tapping into the interest earned on budget reserve funds.

The fourth installment of SSTI's Tech Talkin' Govs series includes excerpts from speeches delivered in Alaska, Connecticut, Maryland, Michigan, Nevada, and Oklahoma. The first three installments are available in the Jan 13, Jan. 20 and Jan. 27 Digests.

Alaska
Gov. Sean Parnell, State of the State Address, Jan. 20, 2010
"We will create even more jobs by funding construction of two new statewide buildings, the Anchorage crime lab I mentioned earlier and we will construct the Life Sciences building at [the University of Alaska, Fairbanks]. …

"… Where energy is concerned, we will continue reducing dependency on diesel across Alaska. And we are putting $25 million toward more in-state renewable energy projects. …

To help train future scientists and support cutting-edge research in health and environmental issues, Alaska Gov. Sean Parnell is recommending $109.5 million in the FY11 capital budget for the University of Alaska Life Sciences Facility in Fairbanks. The multi-purpose teaching and research facility would house the Department of Biology and Wildlife and accommodate a wide-range of research programs, reports Fairbanks Daily News-Miner. The proposal hinges on legislative approval of $88.9 million in financing through certificates of participation and $20.6 million in bond financing through the University of Alaska for construction, according to the governor’s press office. Read more at: http://www.gov.state.ak.us/news.php?id=5191.

Using the interest earned from $400 million in state savings, Alaska Gov. Sean Parnell announced a plan that would provide Alaska high-school students with scholarship funds to attend the University of Alaska or in-state vocational institutions based on academic performance.

The Governor’s Performance Scholarship would be awarded to students based on grade average. Students with an A grade average would receive a 100 percent tuition scholarship, students with a B average would receive a 75 percent tuition scholarship, and C students would receive a 50 percent tuition scholarship.

In an effort to promote college preparedness, the governor’s plan also stipulates that high-school students take four years of math, science, and language arts, and three years of social studies to be eligible for the scholarships.

Gov. Parnell will seek approval from the legislature in the upcoming session to set aside $400 million of nearly $8 billion currently in the Constitutional Budget Reserve Fund and Statutory Budget Reserve Fund to initiate the program.