SSTI Digest

Big H, little u, little d may provide the most apt description of the priorities in the Department of Housing and Urban Development (HUD) FY 2006 request, as cuts to the economic development programs are deep. Housing advocates may not entirely agree with that summation as the agency overall takes an 11 percent cut to total $28.51 billion for FY06; however, nearly every major initiative promoting economic development falls victim to the budget knife.

The total FY 2006 budget request for the Department of Interior, as reported in its Budget in Brief, is $14.958 billion, down 6.7 percent from FY 2005. The discretionary budget appropriation request is $10.76 billion, 1 percent less than FY05. There are two research-related items of potential interest:

The Administration's FY 2006 budget request of $59.5 billion for the Department of Transportation (DOT) is 1 percent higher than the FY 2005 appropriation. DOT's request would be distributed across the department's five key strategic objectives as follows:

• Improve safety (26.1 percent);
• Increase mobility for all Americans (64.5 percent);
• Increases global transportation connectivity in support of the Nation's economy (0.5 percent);
• Protect the environment (6.7 percent); and,
• Support national security (0.9 percent).

The balance of 1.3 percent would go toward organizational excellence, according to the DOT Budget in Brief.

The Department of Labor's (DOL) discretionary budget request of $11.5 billion for FY 2006 is 4.4 percent less than the FY 2005 appropriation. The agency's payroll, however, would increase by 169 full-time equivalent positions, according to the budget overview.

The Employment and Training Administration (ETA) FY06 budget request of $6.36 billion reflects a 5.4 percent decrease from the FY05 appropriation. Highlights of ETA include:

There are only a few programs in the Treasury Department that SSTI monitors for the tech-based economic development community. All are slated for termination or phaseout.

The Community Development Financial Institutions (CDFI) Program ($31.4 million in FY 2005), the Bank Enterprise Award ($11.4 million in FY 2005), and the CDFI Native Initiatives ($6 million in FY 2005) all would be eliminated as part of the initiative to create a Strengthening American Communities Grant Program within the Department of Commerce (see Multi-Agency Initiatives for details).

The Administration's FY 2006 budget request for the Environmental Protection Agency (EPA) is $7.6 billion, a 5.6 percent decrease from the FY 2005 appropriation. However, the agency's science and technology programs would receive $760.6 million, a 2.2 percent increase over the FY05 appropriation.

A $79 million increase is proposed for EPA homeland security efforts, including:

The Administration's $16.47 billion FY 2005 budget request for NASA represents a 2.4 percent increase over the FY 2005 appropriation. Among highlights, the budget proposal maintains investments in next-generation Earth-observing satellites to support climate research efforts. It also continues support for Lunar, Mars, Earth Observations Systems and solar research, but cancels the Jupiter Icy Moon Orbiter program, promising to fund Project Prometheus to test a nuclear reactor in 2008 and fly a demonstration mission within a decade.

The budget request for the Science Mission Directorate is $5.48 billion, a modest decrease from its $5.53 billion in FY05. By contrast, Education programs are reduced by nearly 23 percent to $166.9 million. Funding for AeronauticsResearch is down 5.9 percent from FY05 to $852.3 million.

The Administration's FY 2006 budget request for the National Science Foundation (NSF) is $5.605 billion, a 2.4 percent increase above the FY05 appropriation level, but is still lower than the agency's FY04 appropriation of $5.652 billion.

Demand for NSF funding has increased dramatically over the past few years, based on the funding rate for research grants dropping from 30 percent in the late 1990s to only 20 percent in 2005 (estimated). The budget brief states, "In FY06, NSF will increase the funding rate to the FY04 level of 21 percent, while striving to maintain recent gains in award size and duration." This may be difficult given funds available would barely keep pace with inflation and the agency would add 25 employees under the Administration's request.

There are three federally established regional commissions and authorities that are dedicated to improving the economic opportunities within specific geographic regions. Two - the Appalachian Regional Commission and the Delta Regional Authority - are dependent on annual appropriations and are looking at reductions in FY 2006. The Tennessee Valley Authority, the oldest and largest of the three, generates its budget primarily through power generation revenues. TVA still requires the government to approve or set its annual spending level.

The Administration's $593 million FY 2006 request for the Small Business Administration (SBA) represents a 3 percent decrease from the FY 2005 appropriation. Funding levels for selected activities identified as "core programs" in the agency's press release include:

The first four installments of SSTI's annual look at how TBED will play in the 2005 legislative priorities of the governors can be found in the Digest archives on our website: http://www.ssti.org/Digest/digest.htm

Kentucky

Gov. Ernie Fletcher, State of the Commonwealth Address, Feb. 1, 2005

"The tax plan I offer tonight includes incentives to help promote education and economic growth...I'm proposing a tuition tax credit of up to 500 dollars for each student going to Kentucky colleges and universities.

Gov. Christine Gregoire announced the first stages of her economic development program last Wednesday, highlighted by a proposal to inject $35 million annually starting in 2008 for the next 10 years into life sciences research at the state's universities. Gov. Gregoire also requested legislation be introduced this week that would facilitate the transfer of technology from research institutions to the private sector.

Gov. Gregoire said the payoff of the proposed Life Sciences Discovery Fund would be twofold, with a strengthening of the state's reputation as a bioscience center and the creation of as many as 20,000 new jobs in the next 10-15 years.