As a part of Arkansas Gov. Mike Beebe’s plan to draw more high-paying jobs to the state, his office is close to rolling out a proposal to award college scholarships for students pursuing careers in the life sciences and other science, technology, engineering, and mathematics disciplines, Beebe told BioRegion News last week.
“I will probably propose some extraordinary proportion of scholarship funds targeted toward the STEM arena,” Beebe, a Democrat who took office last year, said in an interview. Beebe said he and officials have yet to decide how much funding the state would set aside for the scholarships, which is expected to be part of the governor’s budget proposal next month.
“We will spend some more money on either college loan forgiveness programs or scholarship programs targeted at those disciplines where there’s a huge need, which includes the STEM area. Whatever it costs, we have to spend it,” Beebe told BRN. “It’s an investment we cannot ignore, because that’s where the world’s going. That’s where the need is. That’s where the greatest opportunity is.”
Beebe spoke in New York at the Italian restaurant Trattoria Dell’ Arte, where he and his wife, First Lady Ginger Beebe, led a delegation of 13 state officials in hosting a luncheon designed to promote Arkansas’ economic development and tourism efforts.
The luncheon was part of a three-day trip by the Arkansas officials to the Big Apple, where they met several undisclosed economic-development prospects and journalists. The cost of the trip was unavailable.
The scholarship program would mark one of the most visible results of a one-day education summit he led six days before the NYC visit. Beebe outlined his goals of boosting Arkansas’ college baccalaureate and high school graduation rates in an address to more than 1,400 academic, business, economic-development leaders at Arkansas Works 2008: The Governor's Summit on Education and Economic Development, held Oct. 16 in the state capital of Little Rock. The summit drew twice the number of participants originally projected, he said.
State officials have begun crafting plans to achieve both goals, said Maria Luisa Haley, executive director of the Arkansas Economic Development Commission.
Beebe’s remarks are in line with a recommendation in Access to Success: Increasing Arkansas’ College Graduates Promotes Economic Development, a 58-page report released in August by a 16-member task force examining how to improve higher education in the state. The report of the Arkansas Task Force on Higher Education Remediation, Retention, and Graduation Rates, chaired by US Rep. Johnnie Roebuck (D-Arkadelphia), is available here.
Recommendation 4.6, the last of six recommendations for increasing student access to financial aid, calls for the state to “explore giving financial incentives to Arkansas students who complete bachelor’s degrees in high need areas and remain in the state for a specified period of time.”
The life sciences or “biosciences” is one of 15 industry sectors identified by the Arkansas Economic Development Commission as a focus of future recruiting and retention efforts under its Targeted Industry Program. In addition to biosciences, the AEDC will target aerospace/aviation, automotive assembly and suppliers, bottled spring water, health and international foods, steel, data centers, information technology and telecommunications, logistics services, alternative energy, “green” or sustainable building materials, nonprofit organization headquarters, global business headquarters, and tourism.
“In addition to the growth in the number of degrees, the ratio of students enrolled who complete their postsecondary education, as well as the speed in which Arkansans complete their postsecondary education will have to be increased in order for Arkansas to thrive within the new economic paradigm,” the task force stated in its report.
The task force did not detail the projected cost of financial aid to students pursuing the life sciences and other high-need majors, but did say all of its recommendations for increasing financial aid to students would cost $36 million — part of a total $95 million price tag for all recommendations offered in the report.
Beebe’s concept of scholarships differs, however, from how the task force report envisioned assisting students in high-need majors — namely through tax credits toward the repayment of student loans following graduation. Such a program was introduced in Maine this past January.
“Opportunity Maine is the model for this financial incentive to earn a bachelor’s degree and contribute to the state’s economy by working in the state,” the task force stated.
Opportunity Maine offers tax credits not only to students, but to employers that agree in return to repay the college loans of those graduates they hire. “To be eligible, graduates must work and pay taxes in Maine after they finish school – but there are no restrictions on leaving Maine for graduate school or programs such as the Peace Corps,” according to the program’s web site.
Through the financial incentives and other programs, Arkansas officials hope to raise their state’s dismal graduation rankings at both the high school and college level.
“We’re going to proceed with or without a lot of help from Washington, and we’ll overcome whatever obstacles whoever is in there tries to throw up.”
The task force cited the 2006 American Community Survey, which found only 18.2 percent of Arkansas citizens 25 years old and older have bachelor’s degrees — a lower percentage than any state except West Virginia, for a ranking of 50th out of 51 places (the District of Columbia is ranked along with every state). The national average that year was 27 percent.
Arkansas fared slightly better in the 2007 ACS, edging up to 49th place with a 19.3 percent bachelor’s degree completion rate; the national average also rose, to 27.5 percent. According to the task force, Arkansas is producing baccalaureates at a rate of 11,186 students per year. At that rate, the state will have 337,256 citizens with bachelor’s degrees by 2015, or 22.3 percent — still below the 27-percent standard projected for that year by the Southern Regional Education Board.
“This means that Arkansas must increase the current production of bachelor’s degrees by 64 percent (7,098 more graduates per year) each of the next six years to reach the SREB average,” the report concluded.
The 2007 ACS also listed for Arkansas a high school graduation rate of 81.1 percent, placing the state at 45th of 51, and below the national average of 84.5 percent.
That is marginally better than the 80.5 percent listed for Arkansas the previous
year, in which it also ranked 45th while the nation as a whole finished with 84.1 percent.
Those numbers measure residents 25 years old and over, allowing for students who take more than four years to graduate as well as residents who move to Arkansas from other states. In the latest available Report Card available on the Arkansas Department of Education web site, Arkansas reported a lower percentage graduation rate of 76 percent for 2006-7 — the first year in which it recalculated its figures to reflect the National Governors Association Compact. NGA measures the number of on-time graduates in a given year divided by the number of first-time entering ninth graders four years earlier, adjusted for transfers.
Gov: No Rescinding April Budget Cuts
During the interview, Beebe said he would not rescind across-the-board spending cuts that took effect in May and totaled $107 million — about 2.5 percent of the $4.4 billion general revenue portion of Arkansas’ $20 billion budget for the fiscal year that began July 1.
Beebe imposed the cuts in April, as energy costs zoomed and state officials feared the state would end this fiscal year in the red. Instead, the state finished the first quarter of its fiscal year — July 1 through Sept. 30 — with revenues $64.2 million above the year-ago quarter, finishing at $1.2 billion.
Beebe credited increased business activity, reflected in the state gaining 36,000 jobs over the past 20 months. The state has trumpeted its attraction of numerous smaller companies and corporate giants. In the largest job-attraction triumph, construction began Oct. 13 on a $35 million, 150,000-sqiare-foot Hewlett-Packard customer service and technical support center in Conway, Ark. The center was originally set to employ 1,200 people over four years — “they’re talking about adding 400 more because of the things that they’re seeing in Arkansas.”
In return for the jobs, officials from the state and Conway agreed to give Hewlett-Packard economic incentives totaling $43.7 million — $35.4 million from the state; the remaining $8.3 million from the town, including $2.1 million for site work and about $3 million for improvements to roads leading to the office park where the HP center will be located.
In the life sciences, Beebe said, Arkansas has worked to anchor its industry attraction and retention efforts on biofuel, drawing upon the state’s agricultural heritage and some old industrial capacity. In one instance, a former specialty photo chemical plant near Batesville, Ark., made obsolete as photography evolved from film to digital images, was acquired from a spinoff of Eastman Kodak two years ago by its managers, a year after they transformed the site into a facility that created biodiesel fuel from rice and soybeans. In addition to $75 million, the managers’ Viceroy Acquisition Corp. agreed to give Eastman Chemical two cents per gallon of biodiesel fuel produced through 2009.
More recently, the DFI Group of Raleigh, NC, began site preparation last month for the first of two biofuel plants to be built in the southeast Arkansas town of Jerome. Each $18 million plant would be capable of producing 10 million gallons of biofuel annually from oil extracted from algae in catfish ponds, as well as other oil-bearing plants and animal fats.
The plants would be part of a complex to include a $200 million, 110-million-gallon plant capable of producing ethanol from the algae oil, as well as switchgrass and crop residues. DFI envisions the Arkansas site as one of six biofuel-producing facilities it plans to build nationwide.
“It’s a trend that we certainly encourage,” Beebe said, with the state setting aside $20 million for grants to growing biofuel companies. Arkansas will pursue more biofuel development no matter how federal policies are reshaped by next month’s presidential election.
“We’re going to proceed with or without a lot of help from Washington, and we’ll overcome whatever obstacles whoever is in there tries to throw up,” Beebe said.
The state’s life-sci research capabilities and tech commercialization effort were enhanced last year when the National Science Foundation awarded a $9 million grant to the Arkansas Science and Technology Authority to establish the Arkansas ASSET initiative — short for Advancing and Supporting Science, Engineering and Technology.
Among projects funded by the grant was the development of the Arkansas EPSCoR Center forPlant-Powered Productionat Arkansas State University, EPSCoR being an acronym for NSF’s Experimental Program to Stimulate Competitive Research. The center carries out research into plant-based biofuels. Also funded was the Wireless Nano-Bio-Info-Tech Sensor System and Center, shared by University of Arkansas’ Little Rock and Fayetteville campuses.
The state surpassed last year in collections of gross general revenue, individual income tax, and “gross receipts collections” paced by sales and use taxes. One factor in the decline: The state is set to lose $121 million annually as a result of its halving its grocery tax last year — though Beebe has said he plans to eliminate the remaining three-cent grocery tax, which generates about $130 million a year.
In September, however, those gross receipts were $183.4 million, a
decrease of $1.3 million or 0.7 percent below last year, reflecting a decline in consumer spending.Collections were also below monthly forecast levels by $4.1 million or 2.2 percent. Yet the state still finished the month with net available revenues of $481.4 million, up $28.4 million from September 2007, and $24.4 million above forecast, according to the latest monthly revenue summary from the state Department of Finance and Administration, dated Oct. 2 and available here.
Earlier this month, Beebe said he was considering restoring a percentage of the budget cuts — he never said how much at the time, and wouldn’t say how much when asked by BRN.
“Then the market fell,” Beebe said, explaining his decision to maintain the cuts. “While we’re withstanding the global economic downturn, I’m cautious about when and if it will affect us. We’re probably going to err on the side of retaining those cuts for the foreseeable future, and ensuring that we don’t have to do the things that other states have done, laying off people and cutting services.”
To that end, Beebe has asked all state agencies to prepare three different budgets for the next two-year budget cycle — the worst of which would include a 7 percent reduction in spending.
Arkansas finished the fiscal year ending June 30 with a $176.5 million surplus, more than double the $81.7 million originally projected. Beebe is expected to unveil future surplus projections, and a balanced budget for the two-year budget cycle starting in 2009-11, on Nov. 13.
For the current fiscal year, Beebe’s budget has cut about $32 million from the budgets of the state’s higher education institutions.
Not affected by the cost cutting was the $15.2 million, 43,000 square-foot I. Dodd Wilson Education Building that officially opened last week at the Little Rock campus of the state’s principal biomedical research center and sole medical school, the University of Arkansas for Medical Sciences.
Wilson, who will retire as UAMS chancellor on June 30, 2009, led administrators and state officials in dedicating the building Oct. 22. The building is part of an effort by the med school to boost enrollment, which has already risen 43 percent since Dodd took office in 2000, to the current 2,652 students.
UAMS is set to open in January a $150 million, 540,000-square-foot hospital, and a $26.3 million Psychiatric Research Institute with 40 inpatient beds. In 2010, UAMS will complete a 300,000-square-foot expansion to the Winthrop P. Rockefeller Cancer Institute in 2010.
UAMS is counting on future state financing, as well as increased donations and investment income, to meet projections that it will finish the current fiscal year and the following two in the black. The med school has projected positive net income of $1.5 million this fiscal year, $4.6 million in FY 2010, and $5.1 million in FY 2011, despite operating loss forecasts it disclosed to Arkansas Business of $46.3 million in FY 2009, $41.2 million in FY 2010, and $43.1 million in FY 2011.
The luncheon and three-day visit to New York City are part of a marketing effort the Arkansas EDC launched earlier this year, with the goal of raising the state’s profile nationally. [BRN, Feb. 25]