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Governors-elect Outline Support for Tech-Based Economic Development

While the 2002 election marked the return of Republican control of the U.S. Senate and the departure of a number of governors that had been strong supporters of investing in science and technology (e.g., John Engler of Michigan, Angus King of Maine, and Roy Barnes of Georgia), it may also mark the beginning point of a new group of governors that embrace technology-based economic development as a focal point of their administrations.

Of the 24 new governors, 14 outlined specific initiatives designed to build tech-based economies. Holding with tradition, support for science and technology crossed party lines and geographic region. Developing more capital sources for companies was raised by seven during their campaigns. Bringing broadband to all sections of the state was also a common theme with six indicating this as a major goal for their administration. Other areas of emphasis included working to better commercialize university technology, encouraging entrepreneurship, and expanding R&D tax incentives.

A sampling of some governors-elect positions on issues of interest to the tech-based economic development community follows:

Alaska
Governor-elect Frank Murkowski (R) called for developing technology industries as part of Alaska’s resource economy and creating businesses that export that technology in such industries as telemedicine, commercial fishing, and oil and gas. He also advocated increasing laboratory capabilities at the University of Alaska to leverage public and private grants for medical and technological research.

Georgia
Governor-elect Sonny Perdue (R) wants to provide high-speed internet access statewide through tax incentives and public-private partnerships.

Hawaii
Governor-elect Linda Lingle (R) supports state and federal matching funds for research to create new industries in agricultural science, biotechnology and pharmaceutical products; aggressive marketing programs that provide incentives for high technology investments; and, more state and federal funds for research activities at the University of Hawaii, technical assistance programs and technology transfer efforts.

Illinois
Governor-elect Rod Blagojevich (D) campaigned on a Partnership for a New Economy that includes the creation of a public-private $200 million Illinois Opportunity Fund and 20 Entrepreneurship Centers and improving high-speed internet infrastructure by laying fiber optic conduit with every road project.

Kansas
Governor-elect Kathleen Sebelius (D) called for broadband accessibility statewide.

Maine
Governor-elect John Baldacci (D) wants to increase investment in R&D by 50 percent in the first two years of the administration.

Michigan
Governor-elect Jennifer Granholm (D) outlined an economic development plan that: builds on the success of the Life Sciences Corridor by adding a high-technology corridor that leverages the automotive industry and a homeland security technology corridor to create a Michigan Technology Tri-Corridor; creates a seed development fund; and, provides high-speed internet access statewide.

Minnesota
Governor-elect Tim Pawlenty (R) says hopes to provide job growth with an agenda that stimulates more R&D through the use of incentives and promotes more aggressive deployment of research into the local economy.

New Hampshire
Governor-elect Craig Benson (R) supports the creation of an angel investment network, a venture capital network, business incubators and putting them on-line, and urging the retirement system to invest in the state and encouraging small business development through advocacy, incubators, and reduction of workers’ compensation costs.

New Mexico
Governor-elect Bill Richardson (D) is committed to providing seed capital and mezzanine financing to new or expanding companies and creating a partnership between state government, the federal labs, the state’s research universities, military bases and private investors into a New Mexico Technology Corporation.

Pennsylvania
Governor-elect Ed Rendell (D) campaigned on: the creation of a new investment tax credit program and expansion of the R&D tax credit program by $45 million; creation of a public-private venture fund; providing funding for statewide accessibility of telecommunications infrastructure; and, creation of an Economic Development Cabinet to oversee and coordinate all programs and agencies.

Tennessee
Governor-elect Phil Bredesen (D) is committed to supporting small business, technology development and entrepreneurs.

Vermont
Governor-elect Jim Douglas (R) called for attracting venture capital to finance entrepreneurs; enhancing and re-targeting R&D efforts that translate into new companies and jobs; creating a technology advisory board; supporting collaboration between public, private and non-profit and education institutions to deploy technology infrastructure and information transfer between organizations; and, encouraging technology research to create new technology-based ventures.

Wisconsin
Governor-elect Jim Doyle (D) campaigned for an economic plan that focuses on: creating an Office of Entrepreneurial Development; generating and commercializing new ideas in concert with University of Wisconsin; supporting biotechnology R&D and expanding the R&D tax credit; enhancing technology transfer programs; strengthening angel investor networks; capturing SBIR grants; making broadband accessible statewide; and, promoting and nurturing industry clusters.

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State Tech-based ED Measures Pass, Fail in 2002 General Election

Some of the 200-plus ballot measures decided in the 2002 General Election held Tuesday were dedicated to promoting tech-based economic development (TBED). The results were generally mixed, however. Promoters of Michigan’s Life Sciences Corridor were pleased with the failure of an initiative that would have dictated the allocation of the state’s tobacco settlement funds, including a smaller amount than the state is currently spending on life sciences research. However, the stock market’s decline over the last two years may have played a role in voters’ rejection of several investment-related measures. Below, SSTI highlights some of the TBED- and university-related measures and initiatives that were addressed by voters in a dozen states.

Those that passed include the following:

* Arizona voters passed Proposition 104, which exempts from aggregate state spending limits the revenue derived from a sales tax rate increase for education approved by voters in 2000.

* Voters in California gave way to Proposition 47, a measure allowing the state to issue $13.05 billion of general obligation bonds toward construction and renovation of education facilities. The measure reserves $1.65 billion of that total for college campuses. The Governor and Legislature would choose the specific projects to be funded by the bond dollars.

* In Florida, Constitutional Amendment 11 restructures governance of the state’s institutions of higher education. The amendment provides a local 13-member board of trustees to administer each of the state’s public universities and a 17-member governing board to oversee the entire university system to prevent wasteful duplication of facilities or programs. In addition, the measure provides procedures for selecting board members, including a student and faculty representative for each board.

* In Georgia, Constitutional Amendment 3 will allow counties and municipalities to create redevelopment tax incentive programs for blighted property. Under the programs, properties in blighted condition will be subject to increased taxes, and formerly blighted property will benefit from decreased tax burdens.

* A majority of voters in Virginia answered yes to Question 1, allowing the Commonwealth the right to sell up to $900.5 million in bonds to pay for capital projects at public institutions of higher education, museums and other educational facilities. Such projects may include renovation of instructional facilities and construction of new research space. And,

* Voters in West Virginia approved Amendment 1, which permits the State Legislature to authorize county commissions and municipalities to create a new economic development measure for creating jobs. With the amendment’s passage, county commissions and municipalities may redirect specific new property tax revenues from approved projects or project areas to help finance development or redevelopment projects.

The following measures failed to sway enough voters for passage:

* In Louisiana, a constitutional amendment designed to give public higher education institutions the flexibility to invest in stocks failed by a narrow margin. Receiving 49 percent of the vote, Amendment 8 would have allowed colleges and universities or their management boards to invest up to 50 percent of gifts and grants, endowments and other permanent funds in stocks. The state’s public colleges are not permitted to make such investments.

* Michigan voters denied passage of Proposal 02-4, a constitutional amendment that would have reallocated 90 percent (approx. $297 million) of tobacco settlement revenue toward health care related purposes. Approximately 73 percent ($215.7 million) of the revenue presently is appropriated for merit-based scholarships for the state’s college students, while approximately $50 million each year supports the state’s life science initiative.

* In Montana, a constitutional amendment that would have permitted additional funds, including those from the permanent public school trust and the university system, to be invested in private corporate capital stock failed.

* Additional funding for life science research in Missouri took a hit as Proposition A, a measure for implementing a tax of 2.75 cents per cigarette (55 cents per pack) and 20 percent on other tobacco products, failed to pass. The revenues would have expanded the states support for biomedical/biotech research, among other purposes.

* In North Dakota, voters turned down Measure 3, an initiative to establish a program that would provide partial reimbursement of student loan payments. Supporters had hoped the "anti-brain drain" measure would help entice younger college graduates to remain in the state after school. Under the program’s terms, residents under 30 years old who graduated from accredited post-secondary schools would have been eligible for $1,000 per year for up to five years. And,

* In Oregon, the people voted against Ballot Measure 18, which would have allowed or expanded the potential to create geographic areas or zones with lower taxes.

More information on the 2002 General Election, including a searchable state listing of all ballot measures and legislative races, is available at http://www.ncsl.org.

Copyright State Science & Technology Institute 2002. Information in this issue of SSTI Weekly Digest was prepared under a cooperative agreement with the U.S. Department of Commerce, Economic Development Administration. Redistribution to all others interested in tech-based economic development is strongly encouraged — please cite the State Science & Technology Institute whenever portions are reproduced or redirected. Any opinions expressed in the Digest do not necessarily reflect the official position of the U.S. Department of Commerce.

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