Purdue Statehouse Update
Purdue Statehouse Update
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A Purdue Newsletter on Legislative Issues
Fiscal Update By the time this issue of Statehouse Update is in your hands, the Indiana House is expected to have passed its budget bill, House Bill 1001. At this juncture, some perspectives on the financial constraints facing lawmakers may be useful in helping you understand the process. As reported in the first 1999 issue of Statehouse Update, the state will have a projected balance of $2.7 billion on June 30, 2001, based on the budget submitted by Gov. Frank O'Bannon and the State Budget Committee. However, just like your household budget, the state must allocate funds based on projected recurring revenue -- and not solely on balances in a "savings account." The projected revenue for 1999-2000 and 2000-2001 currently is $9.26 billion and $9.74 billion, respectively. The introduced House budget appropriates $8.94 billion in fiscal year 2000 and $9.28 billion in FY 2001. This leaves an annual surplus of $320 million in FY 2000 and $462 million in FY 2001. The governor has proposed several initiatives, including eliminating welfare levies from the property tax, increasing income tax exemptions and offering optional full-day kindergarten. These programs would cost $230 million in FY 2000 and $438 million in FY 2001. Deducting these from available recurring revenue leaves a balance of $90 million in FY 2000 and $32 million in 2001. Assuming no other budget changes and adoption of all of the governor's proposals, only $32 million could be added to the House budget to keep 2001 revenues and expenditures in balance.
The Needs of Higher Education Indiana higher education alone would require almost $150 million in 2001 in addition to the introduced budget to fund the Commission for Higher Education recommendation -- certainly a far cry from the $32 million mentioned above. While the discrepancy seems bleak at first glance, several alternatives would make it possible for the Legislature to respond in a more positive way to our needs. Some proposals making the rounds include: funding some items from the accumulated balances for the biennium only; reducing appropriations for Medicaid and corrections in the introduced budget; and waiting for the updated revenue forecast in April, which could produce added revenue; or by using some of the $400 million annual revenue from the state lottery and riverboat taxes. The other wild card, of course, is that by the time the budget and other agenda items are addressed, some of the governor's initiatives may not be fully supported. One thing is certain: Those of us who are advocates for Indiana higher education have to continue to state our case to lawmakers as the budget process unfolds.
Jobs, High-Tech Growth Indiana's high-tech future and its impact on the state's economic vitality are issues receiving a good deal of attention in the 1999 General Assembly. For Purdue, the high-tech arena and economic development are ongoing priorities. Here are some recent cases in point:
"This new building, the Innovation Center, is our way of helping new businesses that have outgrown the incubator stage but still want to be close to the research park, Purdue and its faculty's expertise," says Stan Mithoefer, director of real estate for the Purdue Research Foundation, the nonprofit corporation that sponsors the privately funded park. "As part of the graduation process, tenants of the Innovation Center will have access to the same services provided by our incubators, but they will lease space at higher rental rates." The 48,000-square-foot, $3 million Innovation Center will open late this year in the park, which is located just north of the West Lafayette campus. All the space already has been leased. "The community will benefit in two ways," Mithoefer says. "We will retain high-tech jobs and pay full property taxes." The Research Park boasts two incubators. A 28,000-square-foot center opened in 1993 and is now at capacity with 29 businesses. The second incubator, a 60,000-square-foot building now under construction, will open in June. The new incubator will offer a more sophisticated office decor, a larger conference facility, and videoconferencing capability. The facility will provide start-up businesses, mainly in the high-tech arena, with a shared office concept, flexible leases, attractive rental rates, and some shared office services including the use of a copier machine and administrative assistant. PRF also plans to help these fledgling companies write a business plan, market their product, connect with mentors, and utilize the expertise of accountants, bankers, attorneys and other professionals. The Purdue Research Park, which opened in 1961, is home to 81 companies that employ 2,500 people. It covers almost 700 acres, of which 120 have been developed by the Purdue Research Foundation.
The Gateways Program will be a mentoring presence for the many businesses throughout the Research Park. "It will provide an infrastructure for the commercialization of new technology," says Sam Florance, Gateways director. The Gateways Program makes available a task force of accountants, attorneys, bankers and others who can provide a diverse perspective in response to new business ventures. The mentoring opportunity involves mainly Purdue alumni who have distinguished themselves in specific areas. "The very best innovators can benefit from others' experiences in initiating and maintaining a business," says Mithoefer. "These prospective entrepreneurs are heavily involved in their own research. This program aims to raise their awareness of the need for a business plan and the capital requirements of starting a new business." The program makes available resources that can identify market prospects, develop a prototype, launch marketing activities or develop financial resources. Most incubators don't have that kind of support, Mithoefer says. The Gateways Program will focus on new technology-based businesses. Such businesses wishing to obtain space within either of the park's two small-business incubators -- the Business Technology Center or the Purdue Technology Center -- will be expected to present a brief summary of their technology and market prospects to the Gateways Task Force. The task force will consider the company's readiness to enter into business. If approved, the Purdue Research Foundation will offer to lease incubator space to the business.
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