Md. Governor Blames Predecessor, Economy for Stem Cell Cut; $20M Approved for FY’09
BALTIMORE — Speaking exclusively with BioRegion News last week, Maryland Gov. Martin O’Malley blamed the fiscal policies of his predecessor and the weak economy of recent months for his agreeing with state lawmakers to cut funding for the state’s stem cell research program in the $31.2 billion state budget adopted last week.
The budget set aside $20 million for the stem-cell program in the fiscal year that starts July 1 — $3 million less than the 2008 fiscal year, which ends June 30. The funding cut could have been worse. Last month the state Senate voted for just $5 million in stem cell funding, while the House of Delegates approved $15 million, plus an up-to-$8 million transfer of profits from the state lottery. [BRN, March 31].
“We were left with a huge budget deficit by our predecessor, and have spent about 14 months digging out of that. And then with the Bush economy dragging all of us down, we had to make even more cuts this year, so that was hard,” O’Malley said in an interview.
He said the state’s new budget upheld the consensus among officials to support the life sciences, citing the stem-cell funding — as well as the officials’ decision to spend $5 million from the capital budget toward the Science + Technology Park at Johns Hopkins, which last week celebrated completion of its first building [see related story, this issue].
The cutbacks reflected a scramble by O’Malley and state lawmakers to erase the state’s projected $332.9 million budget shortfall — a $74.7 million gap in the current FY 2008 and a $258.2 million hole expected the following year, which begins July 1.
The governor was non-committal when asked if he would pursue a restoration of stem cell research funding next year to the $23 million FY ’08 level: “I hope so. I wish some of our wise economic minds can tell me when we hit the bottom of this national recession.”
O’Malley spoke to BRN minutes before cutting a ceremonial ribbon for the first building at Science + Technology Park, a life sciences campus that, along with other new developments, are promising to revive Baltimore’s long-depressed East Baltimore section.
O’Malley, a Democrat in his second year in office, has attacked predecessor Robert Ehrlich Jr. for leaving him a $1.7 billion budget deficit when he took office in January 2007, two months after unseating the one-term Republican in the 2006 election. Ehrlich, now in private law practice, and supporters have countered that he would have responded by cutting state spending more than O’Malley has, and noted that he plugged a budget shortfall inherited from a Democratic predecessor, Parris Glendening, Both parties have contributed, however, to the state’s “structural” deficit between recurring expenses and recurring revenues — pegged at $1.7 billion last year, when lawmakers approved a package of tax hikes.
Florida State Senate Committee Approves Amendments to Innovation Incentive Bill
The Florida state Senate’s Transportation & Economic Development Appropriations Committee last week approved by 5-0 four amendments by the committee’s chair, state Sen. Gregory Fasano (R-New Port Richey), to his original bill requiring a closer legislative eye on Florida’s Innovation Incentive Program.
One amendment will allow universities that meet certain criteria to be eligible for investment partnerships with the Florida Opportunity Fund, the state-created entity that invests seed capital and early-stage venture capital funds into startups in the life sciences and other industries.
In addition, the state will create a uniform economic development incentive application process for all business incentives reviewed by its public-private economic development agency, Enterprise Florida, and approved by the state Office of Tourism, Trade and Economic Development. To date, Innovation Incentive alone required approval by the Legislative Budget Commission.
Another amendment requires the agencies to decide Innovation Incentive funding requests within 65 days; at present there is no timetable for a decision.
And a fourth amendment rolls back a requirement in the original Senate Bill 2778 by limiting to 50 percent the amount of program funds awarded to the life sciences or any of six other industries the state has targeted for growth; the other six are aerospace, alternative energy, aviation, information technology, nanotechnology, and robotics.
“The vast majority of businesses that have taken advantage of the program have been biotech-related. Removing the cap will free up dollars for the other businesses to access if they apply for them,” said Gregory Giorlando, chief legislative assistant to Fasano, told BRN via e-mail.
The amended bill, available here, advances to the full Senate to be placed on its Special Order Calendar on April 16.
Created in 2006, the Innovation Incentive Program has been a key subsidy in Florida’s successful attraction of five research institutes and their jobs to the Sunshine State — the Burnham Institute for Medical Research, the Torrey Pines Institute for Molecular Science, SRI International, the University of Miami’s Institute for Human Genomics, and Germany’s Max Planck Institute [BRN, Jan. 14; Oct. 8, 2007].
The program received $200 million in the 2007 fiscal year, and $250 million in the current fiscal year, set to end June 30. But with the state facing a projected budget shortfall of $2 billion, both chambers of Florida’s legislature are far into reviews of a new state budget for the fiscal year that starts July 1 that would slash funding for the Innovation Incentive program. The state Senate has proposed slashing Innovation Incentive funding to $25 million; the state House of Representatives has eliminated the program altogether [BRN, April 7].
MdBio, Tech Council Lobbying Succeeds as Maryland Repeals Computer Services Tax
Months of lobbying by MdBio and its parent organization, the Tech Council of Maryland, has succeeded in persuading Gov. Martin O’Malley and state lawmakers to repeal a new 6-percent sales tax on computer services approved just last fall. O’Malley signed into law Senate Bill 46, available here and introduced by state Sens. Jennie Forehand (D-Montgomery County) and Verna Jones (D-Baltimore).
The tax, which was set to take effect July 1, drew fire from a coalition that included the Tech Council and MdBio, as well as the Maryland Chamber of Commerce, local tech groups, local chambers of commerce, and some individual businesses. In rallies, meetings with lawmakers, and a web site called ww.fightthetechtax.com, tech tax foes argued the measure would drive away many state businesses to neighboring Virginia — including life sciences and information technology companies now in Montgomery County.
O’Malley earlier argued the tax would benefit Maryland by generating $200 million a year over its five-year life at a time the state is scrambling to plug a budget shortfall. But after the opposition arose, leading to votes by the Senate and House of Delegates [BRN, April 7], O’Malley and lawmakers agreed to replace the tech tax with a three-year, 6.25 percent surcharge on residents with taxable incomes of more than $1 million, projected to generate $110 million, as well as by cutting $50 million worth of transportation projects and another $50 million in spending by state agencies.
San Diego, Imperial Valley Economic Councils Win $225,000 for Project with Mexico’s N. Baja California
The US Department of Commerce's Economic Development Administration has awarded $225,000 to the San Diego Regional and Imperial Valley economic development councils to develop a mega-region strategy intended to enhance their regions’ economic competitiveness, in the first such grant ever awarded by the federal government.
Under the Mega-Region Initiative, the economies of San Diego County, Imperial County, and Northern Baja California, Mexico, will be studied over the next 12 months — with those studies leading to the development of economic strategies focusing on workforce and infrastructure needs of the bi-national mega-region. The goal is to create an economic environment attractive to outside investment, especially in five targeted industries: Applied biotechnology, clean technology, construction materials, distribution/warehousing/transportation, and specialized manufacturing.
Another $75,000 in matching or in-kind contributions is being provided by AT&T, Bank of America, San Diego Gas and Electric, Grubb and Ellis, the San Diego Workforce Partnership, Imperial Irrigation District, Imperial Valley Joint Chambers of Commerce, Brawley Inn, County of Imperial, and the San Diego County Water Authority.
Christina Anne Luhn of the San Diego Regional EDC has been named senior project manager for the study. She previously managed large-scale projects at the International Energy Agency in Paris, and at the National Security Council.
Massachusetts Gov. Announces 16 ‘Growth’ Districts in Economic Stimulus Plan
Massachusetts will create 16 “growth” districts that will allow tax breaks and other incentives for companies that meet job-growth targets after moving to the districts or expanding there, Gov. Deval Patrick said in an April 9 address laying out his package of programs intended to stimulate the state’s economy.
Patrick announced in his address the creation of one growth district in Haverhill, Mass., within the state’s Merrimack Valley region. Earlier this year the state designated its first growth district within an 81.5-acre section of Worcester, Mass. Additional districts will be announced at later dates, following visits statewide over the next month by Patrick, the state’s lieutenant governor, Tim Murray, and state economic development officials.
Patrick described the districts as areas “primed for significant commercial, residential or mixed-use development,” typically older mill towns or cities near highways or other transportation. The state will help the city or town clear land, secure permits and improve infrastructure in hope of drawing businesses.
The districts would be modeled, he said, on Devens, Mass., where the former US Army base Fort Devens has been transformed into a site for Bristol-Myers Squibb, which is constructing a $750 million, 400,000-square-foot biologics manufacturing plant after winning $60 million in state and local incentives as well as state and local permit approvals in less than six months. The plant is set to employ 350 people when it opens in 2010.
“Our commonwealth is a varied place, and the path to prosperity will be different in Pittsfield than it is in Provincetown,” Patrick said in the address.
The stimulus plan also includes a $3.8 billion bond proposal to repair hundreds of bridges statewide; and the creation of a $20 million fund to acquire vacant foreclosed properties so they can be turned over to nonprofit housing developers.
Tennessee Technology Development Corp. Unveils Economic Development Strategy
The Tennessee Technology Development Corp., which promotes technology-based economic development statewide, has unveiled an economic development strategy intended to advance the Volunteer State’s economy by boosting the life sciences and other science and technology sectors.
The plan creates four new operating committees, each focused on a core objective of the organization, and each expected to help develop a growth strategy, and oversee details of each initiative they recommend:
- The Tennessee Strategic Research Board will focus on growing the state’s scientific research base, facilitating sponsored research between businesses and universities, and increasing the flow of innovations from laboratories to the private sector.
- The Tennessee Entrepreneurship Network will foster tech-based entrepreneurship support efforts by increasing access to workforce training, mentoring and other resources.
- The Tennessee Capital Formation Board will work to increase the supply and accessibility of risk capital for Tennessee’s technology-based businesses.
- The Tennessee TBED Stakeholder Relations Board will link the resources and activities of existing tech-based economic development programs.
Committees will consist of members of the TTDC board, as well as individuals recognized for expertise in scientific research, entrepreneurship and capital formation in Tennessee’s urban and rural communities.
TTDC won a $5 million contract last year by the Tennessee Department of Economic and Community Development to create and implement a statewide, innovation-based competitiveness agenda.
Alabama, China Sign Trade Accord Pledging Cooperation in Biotech, Three Other Industries
Alabama has reached agreement with China's Jiangsu province calling for cooperation in biotechnology, automotive manufacturing, higher education and financial services, with the goal of encouraging trade, investment and research opportunities between the state and the Chinese province, the Birmingham, Ala., News reported.
A formal memorandum of understanding spelling out each side’s obligations was signed April 9 by Gov. Bob Riley, traveling in China this week on a trade mission, and the governor of Jiangsu, Liang Baohua. Officials began working on the accord during a 2006 trade mission to China.