The States, Science & Technology, and Election 2000

With what’s shaping up to be the closest presidential election in the last 40 years and control of the U.S. House and Senate up in the air, little press attention has been focused on the other elections occurring throughout the country. Today’s issue of the SSTI Weekly Digest provides an overview of some of the other races affecting S&T. On Thursday we’ll report on the results.



Gubernatorial Candidates on Technology . . .

While much of the country is focused on the race for the White House, eleven states will hold elections for governor (Delaware, Indiana, Missouri, Montana, New Hampshire, North Carolina, North Dakota, Utah, Vermont, Washington, and West Virginia). In at least five of those states, technology issues were on the front burner for at least one of the candidates. Most of the candidates’ technology initiatives center on access to the Internet, providing tax incentives, and supporting research and educational opportunities for universities and their students.

In Indiana, both candidates include a technology angle in their stated positions on economic development. Current Governor Frank O’Bannon would continue his efforts with the Skills 2016 Grant Fund which would: restructure Training 2000 funds and target them towards information technology, software development, and other high-tech high-skill jobs; expand the Research and Technology Fund by $100 million over four years to foster high-wage, high-skills jobs through the development and commercialization of cutting-edge research and technology; create venture capital opportunities through the Public Employee Retirement Fund; and, through the Hoosier Internship Program, provide links with Indiana businesses in the hopes of keeping Indiana’s graduates in the state. Challenger David McIntosh also focuses on the brain drain and plans to entice people and businesses to Indiana by eliminating the inventory tax, improving the tax credit for research and development, pursuing opportunities to create high-paying jobs through business incubators, creating the position of a new Secretary of Technology, and enacting several other related proposals.

Montana gubernatorial candidate Mark O’Keefe’s proposals for education and technology include: providing Internet access in every classroom; training by community colleges and tech colleges in the latest technology; expanding research at the university level and at non-profit research institutes; and, encouraging partnerships with companies to locate training centers at Montana universities and colleges of technology. He would also appoint a Chief Technology Officer for Montana who would be tasked with ensuring that state initiatives expand on and reinforce private efforts and with guiding the state's information services. New state incentives for telecommunications such as matching monies and tax credits would be created if needed.

Some candidates have made brief outlines of their technology plans available on their web sites, but the two candidates running for governor in North Dakota (Governor Schafer is not running for re-election) have included extensive plans demonstrating the importance of access and support of technology to a state’s economy. Heidi Heitkamp’s proposals include a long list of technology-related tax incentives for everything from venture capital firm investments, research and development increases, and tuition reimbursements, to stock options, software development, and computer purchases. Ms. Heitkamp also wants to continue the Internet infrastructure development and connection of every town and every school with high speed access. Her plans for education as it relates to technology are to create a mentoring program to allow teachers to share technology-oriented projects with other teachers and schools. This program would allow districts to share a teacher for specialized instruction and to help inexperienced teachers in technology, science and math. Local school districts also would be encouraged to set up Youth Tech Entrepreneur programs that empower high school students to use school computers to teach technology workshops and develop high-tech businesses in their communities.

Heitkamp would introduce legislation removing barriers to telemedicine, including a requirement for insurance companies to reimburse patients and providers for telemedicine services. The administration would work with the FCC’s telemedicine program and the Rural Health Care Corporation to expand telemedicine in the state.

John Hoeven, the Republican candidate for North Dakota’s governorship, also has a substantial plan for technology matters. Along with supporting the completion of the state’s high-speed data network, Hoeven wants to ensure that all K-12 schools are wired to the Internet. He calls for a 20-pecent tax credit for new seed and capital investments. Additionally, Hoeven calls for selling $5 million worth of the state's Development Fund portfolio to a local bank and injecting $3 million more of public funds permitting more investments in new business ventures. He would also increase funding for the Beginning Entrepreneur Loan Fund, giving more entrepreneurs an opportunity to launch innovative businesses, many with a technology connection. The creation of regional accredited investors networks would provide opportunities for high net-worth investors to invest and mentor emerging entrepreneurs.

Recognizing the role of universities in economic development, Hoeven proposes creating a Governor’s Cabinet on Economic Development and would include the University System chancellor and two of the chancellor’s designees - one representing research and high-tech and the other representing workforce development and jobs training. Hoeven also wants to establish a $4 million state matching fund to match the federal 21st Century Challenge Fund to challenge the research universities to secure research grants. Through a Tech-Savvy Entrepreneur Program, Hoeven supports closer relationships between industry and higher education. This program would match successful business people with professors in related fields to develop sound business plans. A Sci-Tech Faculty Development Program would be a new student loan program which would help residents secure their Ph.D. degrees in science and technology areas like engineering, biotechnology, medicine and information sciences. Up to $3,000 annually would be forgiven for as many as five years if the new professors stayed as faculty at North Dakota universities. In addition, a Technology Scholarship for the New Economy would provide $2,000 annual scholarships for technology-based studies at their universities for up to five years.

In Utah, Governor Mike Leavitt proposes to make high-speed, high capacity Internet service available to every community within two years. He want to open up interstate highway rights-of-way for telecommunications infrastructure.

One of Washington’s gubernatorial candidates, John Carlson, has outlined his plans to embrace technology by making sure the federal government does not enact laws which would stifle emerging technologies. He would lobby Congress in support of the biotech industry to reduce FDA licensing time frames; extend the moratorium on the taxation of the Internet; and relax immigration quotas for highly trained, well-educated, technical experts for companies that are recruiting worldwide. He opposes excessive privacy restrictions which would interfere with medical research and clinical trials. Carlson would reduce business tax and regulatory burdens through a number of means including keeping the high-tech sales tax credit exemption for investment in new plant and equipment.

Ballot Initiatives

Whether at the local, state, or federal level, issues central to technology-based economic development are taking prominent roles in this year’s elections. Deep and targeted tax cuts also may figure in future efforts to promote research and tech-based economic development. With record budget surpluses recorded in most states, this year's ballot initiatives reflect the struggle between making public investments in the future and returning overpayments to the current taxpayers. A sampling of the ballot initiatives, constitutional amendments, and voter referenda illustrates the trends:

Alaska – If passed, Ballot Measure #4 would cap property taxes at 10 mills and would cut an estimated $150 million from local government budgets across the state and put pressure on the state's budget. Alaskans pay no state income or sales tax and receive annual dividend payments from a permanent trust fund established with the state's proceeds from private oil exploration and production. Given its unique revenue structure, the state of Alaska faced a whopping 40 percent budget deficit during last year's slump in oil prices. Plans to meet the budget shortfall with a portion or all of the year's $1,000+ dividend payments to each Alaskan met stiff opposition.

Arizona – Proposition 301 would increase the state sales tax to 5.6 percent from the current 5 percent. The new funding would be directed to education improvements, including reducing class size, higher teacher pay, and school construction. An estimated $55 million would be directed to the Board of Regents to establish a New Economy Initiative Fund program for investments in research and technology and to the Community College Board to create a Workforce Development Initiative Fund. Governor Hull was quoted in the press as saying, ”This proposal is based on bringing Arizona to where we belong in the New Economy.”

Arkansas – A constitutional amendment to create a state lottery and permit casino gambling would direct the use of any proceeds to provide grants to qualified high school graduates for post-secondary education. Another Arkansas ballot initiative would establish how the proceeds from the state’s tobacco settlement would be used. Among the projects to be funded would be biosciences research buildings at two universities and approximately $13 million per year for the Arkansas Biosciences Institute.

Colorado – Ever since a 1992 Taxpayer's Bill of Rights required all surplus tax dollars to be refunded to taxpayers – about $2.3 billion so far – school districts throughout Colorado have been complaining of insufficient funding. Two ballot initiatives are intended to address their concerns. Referendum F would require $50 million from any surplus occurring in each of the next five years be used to support math and science education in needy schools. If the state ends the year with a surplus of less than $ 50 million, Referendum F requires the new grant program to get first dibs on the money. The latest news poll reflects continued support for the measure.

Amendment 23, also on the ballot this year, would use surplus revenues to boost K-12 education base appropriations, supplementing the 40 percent of the state budget already dedicated to K-12 education. The amendment directs the legislature to increase education spending by at least the rate of inflation plus one percent for ten years, pumping an estimated $ 4.58 billion into school districts and boosting per-pupil spending from this year's $5,175 to an estimated $8,192 in 2011. One of the latest polls shows voters in favor 56% to 33%.

Florida – The Florida Transportation Initiative is intended to reduce traffic and increase travel alternatives by providing for development of a high speed monorail, fixed guideway or magnetic levitation system. If approved, tt would link Florida's five largest urban areas and provide for access to existing air and ground transportation facilities and services. The initiative would direct the state and/or state authorized private entity to implement the financing, acquisition of right-of-way, design, construction and operation of the system, with construction beginning by November 1, 2003.

Louisiana – Amendment No. 1 would privatize and significantly downsize the state department of economic development while retaining the full budget. Louisiana, Inc, the new corporation, would be the state's principal source for economic development activity. Recent polls show the proposal failing.

Massachusetts – Question 4, if passed, would cut the state income tax from its current 5.85 percent to 5 percent over three years. A Boston Globe-WBZ-TV poll taken last week showed voters overwhelmingly support Question 4. Fifty-six percent of respondents supported the measure, while 26 percent were opposed; the balance were undecided.

Nevada – Addressing an issue preventing many states from more active engagement in seed and venture financing, Question 1 on the Nevada ballot asks “Shall the Nevada Constitution be amended to allow the investment of state money in a company, association or corporation to assist economic development and the creation of new high-quality jobs?”

North Carolina – A referendum requests the issuance of $3.1 billion in bonds to support capital improvements for the state's public universities and community colleges. Potentially doubling the state's debt, the proposed higher education bond issue is the largest single borrowing package in state history. If approved, it would set off a construction frenzy on campuses across North Carolina during the next six years. North Carolinians haven't defeated a statewide bond issue since John F. Kennedy was President, but the last higher education bonds in 1993 passed by slim margins - 52 percent for the UNC system's $310 million package and 57 percent for the community colleges' $250 million package. This time, the referendum is combined, and university leaders hope widespread support for the community colleges will help their cause.

Oklahoma – State Question 692, one of six questions on the Nov. 7 ballot, would amend the Oklahoma Constitution to create the Tobacco Settlement Endowment Trust Fund. A portion of the earnings from a tobacco trust fund would pay for research into tobacco-related illnesses. There appears to be no organized opposition to SQ 692.

Oregon – Voters will consider two alternative plans for handling the state's tobacco settlement package. Measure 89 would establish a multipurpose fund using Oregon's share of the legal settlement with tobacco companies. The measure, which was referred to the public by the legislature, would devote seven percent of the settlement for medical research.

Measure 8 would establish a multipurpose fund using Oregon's tobacco settlement monies. In addition to supporting county public health departments, housing for the poor and disabled, transportation for the elderly, tobacco use prevention, and women's shelters, the fund's investment earnings would allow the Oregon Health Sciences University to recruit top scientists and researchers. The measure which would also limit state spending to 15 percent of Oregonians' personal income in the two prior years, would potentially force nearly $5 billion in spending cuts in the next two-year budget. The latest polls show Measure 8 is opposed by 56 percent of voters.

Measure 86 would require surplus state budget funds to be returned to state taxpayers. The measure would put the state's current surplus kicker law into the Oregon Constitution. The law gives taxpayers an income tax refund or a credit if state revenues are 2 percent or more than the amount forecast when the state budget was adopted. The kicker is calculated separately for corporate taxes and all other general fund revenues. Under Measure 86, the Legislature could change the estimates, and thus reduce or eliminate the kicker, with a two-thirds vote in both chambers.

Measure 93 would amend the constitution to require voter approval of most tax increases. It is opposed by two-thirds of voters according to a late poll.



South Carolina – Passage of Lottery and Gaming Number 1 would allow the State to conduct lotteries. Lottery revenues would first pay operating expenses and prizes and the remaining revenues would be credited to a separate Education Lottery Account. If the polls are correct, a majority of South Carolinians have decided they're in favor of a South Carolina lottery although by a narrow margin. The rest of the South is looking at Tuesday's referendum as an important test of whether legalized gambling will continue to spread through the region.

Washington – Initiative 728 would increase education spending. The initiative would generate more money for public schools by redirecting a portion of state property-tax revenues, the emergency-reserve fund, and lottery proceeds. A favorable vote would see state funding for school operations increased by more than $1.8 billion over the next six years.