Council pushing high-tech stimulus in Oregon

The sky may be falling in Salem, but a group of high-tech executives, educators and politicians say they are optimistic they can convince legislators to spend $76 million in the 2003-2005 biennium on programs to increase technology-related economic development.

By:
Ted Sickinger
Oregonian

To that end, the 15-member group, the Oregon Council on Knowledge and Economic Development, began making the rounds Wednesday in Salem to urge legislators and Gov. Ted Kulongoski to get behind legislation designed to use the higher-education system as a catalyst for economic growth, cultivate innovation and new companies, and train workers to thrive in new industries and jobs.

Former Gov. John Kitzhaber created OCKED, as the council is known, in 2001. Since then, economic development has become a top priority for business and political leaders as Oregon looks for a way out of its lingering recession, persistently high unemployment rate and deepening budget crisis. But the state has little discretionary money, or precedent, for investing in such initiatives.

OCKED finalized a series of specific recommendations in November. On Wednesday, Sen. Ryan Deckert, D-Beaverton and a council member, introduced six bills based on the recommendations to the Senate Committee on Transportation and Economic Development.

The measures call for: Spending $30 million to pay for a center at Oregon State University researching multiscale devices, which include miniature chemical and mechanical systems. Eliminating Oregon’s capital gains tax, which the council contends is a highly volatile source of revenue and a disincentive for investment. Adjusting the mission statements of state higher-education institutions to give more weight to commercializing university research. Developing a statewide integrated work-force strategy at a cost of $500,000. Providing targeted tax breaks to lure venture capitalists and high-end researchers who bring investable funds and research grants, respectively, to Oregon. Supplying $4 million to feed a higher-education technology-transfer fund that the 2001 Legislature created and $1 million to fund "knowledge-based" economic development in rural areas.

The council also advocates two long-standing tech-community priorities: doubling the number of Oregon engineering graduates and building a top-tier engineering school at a total cost of $40 million in the 2003-2005 biennium.

On Wednesday, council members testified in the committee hearing and met with the leadership of both houses as well as Kulongoski’s chief of staff, Peter Bragdon.

Council members say their recommendations would cost less than one-half of 1 percent of the state budget but would offer promising returns in the form of high-paying jobs and a bigger tax base.

"Everyone is mindful of the backsliding revenue situation," said Scott Gibson, a local venture capitalist and council member who testified in Salem on Wednesday. "But to a person, everyone recognizes that if we only make cuts, we’ll have the same thing going forward, only smaller. The current system we have isn’t working any more. It’s hard coming down asking for money, but people are really receptive."

The council and the high-tech community has mounted a concerted, steady campaign in the past two years to sell legislators on the importance of technology-based economic development.

Tech leaders think they have made headway in convincing legislators about their cause, but they recognize the budget crisis could deter them from investing money in their ideas.

"It will be an uphill to do any significant investment in anything in this building," said Jim Craven, lobbyist for the AeA, an electronics industry trade group.

http://www.oregonian.com