NEW YORK (GenomeWeb News) - Florida's dicey fiscal situation will preclude lawmakers from reviving next year a $250 million economic development fund that helped the Sunshine State attract six research institutes before it was eliminated last year in a budget-cutting move, according to the head of the task force that made the recommendation this week and an aide to the state Senate's second-highest official.
"From all practical discussion, I can't imagine that this  is the year to do it. I don't think the budget situation has improved," state Sen. Jeremy Ring (D-Margate), the chairman of the 17-member Task Force on the Study of Biotech Competitiveness, told GenomeWeb Daily News on Tuesday.
"A lot of what we recommended, though not everything, was based on appropriations, and very little of it will happen this [upcoming] year," added Ring, who also chairs the state Senate's Committee on Governmental Oversight and Accountability.
That assessment is shared by state Senate President Pro Tempore Mike Fasano (R-New Port Richey). "Based on current projections, it doesn't look like the innovation program is going to get funded, unless things turn around," Gregory Giordano, chief legislative aide to Fasano, who also chairs the state Senate's Transportation and Economic Development Appropriations Committee, said Wednesday.
Lawmakers, he said, were instead likely to continue funding the state's Quick Action Closing Fund — though the business attraction subsidy was chopped this year from $26.5 million to the current $13.5 million, well below the $45 million proposed by Crist.
The task force's final report and recommendations were released by Crist, a Republican who hopes to win a US Senate seat next year. The 25-page report sought to address how Florida should draw more federal research grants, boost its life sciences education and workforce training efforts, and improve its business climate.
Among the task force's recommendations was restoring the Innovation Incentive Fund, intended to bring the state larger projects in the life sciences and other technologies. The fund grew from $200 million when created in 2006 to $250 million a year later, making it Florida's costliest economic program.
Under Crist and predecessor Jeb Bush, Florida approved payments from the innovation incentive fund to six of the seven research institutes drawn to the state since 2003. They include the Burnham Institute for Medical Research, which earlier this month marked the grand opening of its new facility in Orlando's Lake Nona Medical City; the Torrey Pines Institute for Molecular Science, SRI International, the University of Miami's Institute for Human Genomics, Germany's Max Planck Institute, and the Oregon Health and Science University's Vaccine and Gene Therapy Institute.
The final $15 million in innovation funds in 2008 went to a company — Charles Stark Draper Laboratories has promised to create 165 jobs at a BioMEMS R&D Center at the University of South Florida in Tampa, and a multi chip module center in St. Petersburg, in return for the state money and a combined $15 million from the municipalities.
Bush and state lawmakers created the innovation incentive fund with the goal of repeating Florida's success in attracting the Scripps Research Institute. It agreed to establish a facility in Jupiter, Fla., in return for a $600 million incentive package that included $310 million in state funds.
But in the spring of 2008, with the economy starting to tailspin into recession, Florida lawmakers eliminated the fund to help plug a $2 billion hole in their spending plan for the fiscal year that ended June 30. Citing budget woes, lawmakers held off restoring the fund this past spring.
The state's current $66.5 billion budget was balanced in part with $5 billion from the American Recovery and Reinvestment Act, set to end next year, halfway through next fiscal year. Crist has asked department heads to slice 10 percent from their proposed budgets for FY 2011, when Florida faces a projected $2.6 billion shortfall.
"That is going to make any spending initiatives that were not part of last year's budget very difficult to find the money to fund," Robert Weissert, a spokesman for the budget watchdog group Florida TaxWatch, told GWDN.
Helping the industry's cause, he said, is the view among Florida officials that life-sci requires state funds to stay competitive with other US and global regions.
According to Florida TaxWatch, the state has shifted about $3.9 billion from special funds since FY 2008 to balance its general fund budgets — including $600 million this fiscal year.
Ring said he was open to restoring the innovation fund at a smaller amount than last year's $250 million. The need for the fund has not lessened, he added, even though Florida has set aside $250 million of its $110 billion pension fund this year for awards of between $5 million and $20 million to growing later-stage life-sci and other tech companies.
That money will come from the state-created Florida Growth Fund, a venture capital fund managed by Philadelphia private equity firm Hamilton Lane. In return for the cash, the state holds a stake in the funded companies.
Ring said he agreed with the task force that Florida should shift the focus of its life sciences effort from drawing additional research institutes, to capitalizing on their technologies and innovations through helping create spinout companies.
"Especially in the biotech space, you can't really start investing in commercialization until that seed [company] is incubated properly. Now that we've had this for several years, the next logical step in the process is to invest in commercialization," the state senator added.
One means for doing so, according to the report, would be to grow state funding for the Institute for the Commercialization of Public Research, which received $600,000 this fiscal year. The institute was established this year to link entrepreneurs with investors and companies to commercialize technologies based on publicly-funded research.
The task force report also recommended that Florida:
• Join the 32 states that award R&D tax credits.
• Step up life-sciences workforce education and training in high schools and colleges.
• Match the US Small Business Innovation Research grants won by companies.
• Join local governments in approving master plans and infrastructure for new facilities before site plans are filed.
• Cut state income taxes, as 23 states have done, by basing what companies owe simply on their sales taxes, rather than on sales plus property and payroll taxes.