The Mass. Life Sciences Center got another haircut in Gov. Deval Patrick’s proposed 2011 fiscal budget, but neither the center nor the governor himself appears ready to concede ground on the initiative once known as the $1 billion life sciences bill.
At a breakfast meeting of the Mass. Biotechnology Council today, Patrick vigorously denied that his proposed cuts to the life sciences center reflected anything other than fiscal necessity. His proposed budget calls for a temporary cut of $5 million to the center’s tax credit initiatives, bringing the total to $20 million for 2011, and another cut to the center’s investment fund.
Asked whether the cuts reflect any doubts about the center’s mission, Patrick said, “Absolutely not.”
“It reflects the reality of the economic climate,” Patrick told MassDevice. “We all have to share in the sacrifice and trim the sails a little.”
The Life Science Investment Act, which Patrick signed into law in 2008, was billed as a 10-year, $1 billion initiative. But it’s actually four different funding pools, most consisting of tax breaks for infrastructure improvements and capital spending. There’s also a $25 million annual discretionary fund the center uses to make direct investments in small and mid-sized companies in the medical device, pharmaceutical and biotech sectors. Last year, amid an unprecedented economic crisis, the investment fund was cut 40 percent to $15 million.
Patrick further cut that investment fund, to $10 million, in last year’s budget and kept the line item at the same level for 2011, meaning the investment pool has never been fully funded. It’s the first time the center’s ability to give out tax credits was trimmed as well. The center doled out $25 million in tax breaks to 28 companies in December. Those awards, aimed at fostering the creation of 918 new jobs here, have so-called “clawback” provisions to ensure that the new positions last at least five years.
Despite the budgetary setbacks, MLSC president Susan Windham-Bannister told MassDevice she remains positive that the center can make due.
“I’m a realist and these are tough times,” she said. “I wish we had [the full amount], but $20 million is still a good number to be able to work with.”
Bannister said the center will be rolling out new initiatives in the coming months as it looks to call more attention to its efforts. She cited yesterday’s announcement of $3 million in matching grants for companies awarded SBIR and STTR grants, as well as a move to expand the center’s internship initiative (which she said would cost about $750,000) as examples of how her quasi-public agency is helping to boost the life sciences industry in the Bay State.
Bannister said the center currently has $10 million in its investment fund for 2010 and will bring a new round of accelerator loan proposals before the board next month.
Even with that in mind, she said, it’s imperative that the center not take any more hits to its investment fund as Patrick’s budget makes its way through the state Legislature.
The center would be lobbying hard to make sure those dollars don’t get trimmed further, Bannister said, a tough task given that they are tied to the state’s ability to post a net-consolidated surplus. With the state’s fiscal crisis, the fact that the funds were green-lighted this year might qualify as a minor miracle.
Patrick seemed willing to throw his weight behind the MLSC as well. When asked it he would put up some political capital toward protecting that $10 million investment fund, he said, simply, “You bet your life.”