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Friday, May 29, 2009
Mass. budget cuts leave state-funded groups in limbo
By Mass High Tech staff
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Less than a year after state and industry officials heralded the enactment of the $1 billion, 10-year life sciences bill as a step toward positioning Massachusetts as a sector leader, one of more than 700 proposed amendments to the Senate version of the 2010 state budget sought to kill the program.
The move by Sen. Richard Tisei, R-Wakefield, was easily defeated, 32-7, but it was emblematic of the beehive that is the annual budget process on Beacon Hill — further stirred up by fiscal crisis. The frenzy has left some critical quasi-public tech agencies wondering whether they’ll get enough funding to continue their mission of identifying and investing in opportunities in the longer term. Those agencies include the Massachusetts Technology Transfer Center and the Advanced Technology & Manufacturing Center at the University of Massachusetts Dartmouth.
The Life Sciences Act of 2008 was to provide $1 billion worth of loans, grants, tax incentives and other stimulus funding mechanisms to the state’s biotechnology industry. A quasi-public agency called the Massachusetts Life Sciences Center (MLSC) oversees its implementation.
Although the act remains on the books, the center requires annual funding to operate and disburse funds. Both the Senate and House budgets have slotted it at $10 million for 2010, down from the $15 million at which it was funded in 2009 — and that figure was down from the $25 million originally intended when it was created in 2008. However, Tisei’s amendment would have stopped the life sciences act in its tracks, killing future funding.
Tisei insisted he would submit the amendment again, saying the state can’t afford such giveaways in the current economy, and that it’s not fair to favor biotechnology over other industries, such as retail or manufacturing.
“We shouldn’t be picking winners and losers among industries,” said Tisei. “I’d rather see an across-the-board approach.” The Legislature should focus on cutting costs overall for businesses, he said, addressing things such as taxes, the cost of energy and regulations, particularly around labor law.
For biotech advocates, the funding battle is worth the fight — state support is the best way, they say, to maintain the state’s superior position in life sciences. The initial legislation passed “overwhelmingly” the first time around and the defeat of the repeal amendment was also by about the same vote margin, noted Angus McQuilken, spokesman for the center. “It appears not much has changed.”
In the past year, the center has invested $46 million in state funds, leveraging $357 million in matching federal and private investment, and helping to create a projected 950 jobs, McQuilken said.
But the battle is not just about life sciences: Agencies created to help identify innovations across technologies are also laboring at the mercy of the budget process.
Fighting for survival
While the MLSC survived its threat, several state-backed, tech-oriented groups may be at risk as a result of the tight budgets. They include the Massachusetts Technology Transfer Center, which provides early funding and mentoring services to startups emerging from state and private colleges. MTTC hoped for at least operational funds for 2010, but it was omitted from the House budget and is slated for $350,000 in the Senate budget through an amendment filed by Sen. Karen E. Spilka, D-Framingham.
The primary question for MTTC director Abigail A. Barrow is whether that $350,000 will survive when the two budget proposals are reconciled by a conference committee. “If we get the $350,000, we’ll survive through the next fiscal year. We could still manage operations and support services. We are looking to see if we could supplement that with other sources,” said Barrow, raising the possibility of federal grants or private partnerships.
At a recent State House hearing, Barrow said her office has given out $1.9 million to researchers at 22 institutions, helping to spawn seven startups that have raised more than $11 million in subsequent financings. “If we don’t come out of the conference committee (with funds), we can stay operational until around Christmas,” said Barrow.
Nina Green, director of the office for technology licensing and industry collaboration at Tufts University and chair of the Massachusetts Association of Technology Transfer Offices, said the loss of MTTC would mean “no access to entrepreneur mentorship.”
Meanwhile, other key tech groups, including MassDevelopment’s Emerging Technology Fund and Massachusetts Technology Collaborative’s John Adams Innovation Institute, rely on recurring recapitalizations to continue their work.
“Our program was largely capitalized through stimulus funding, so we get periodic funding,” said Patrick Larkin, director of the John Adams Innovation Institute. “We are due for a recap, and it would have been good to do it this year — but given the state of the economy, we aren’t expecting it.”
In Fall River, the Advanced Technology & Manufacturing Center at the University of Massachusetts Dartmouth, relies on a $1.5 million state budget line item that was passed by the House but rejected by the Senate. ATMC director of operations John Miller says the agency has turned that annual investment into a $30 million economic impact.
Like the MTTC, the ATMC’s funding is now at the mercy of the conference committee process, but has key backers on Beacon Hill. “Both the Legislature and UMass Dartmouth are committed to it,” said State Rep. Michael J. Rodrigues, D-Westport, a member of the House Ways and Means committee. “It has been too much of a success story across the whole spectrum of technology ... to abandon it at this point.”
Staff writers Brendan Lynch, Efrain Viscarolasaga, Galen Moore and Marc Songini contributed to this report.
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