Gov. Janet Mills, who entered the Blaine House last month after serving as Maine’s Attorney General, has provided an early sign that she’s open to supporting Maine’s startup and innovation community.
In her first proposed biennial budget, which covers the years 2020-21, Gov. Mills has restored full funding to three of the state’s startup incubators and removed language from the last few budgets that had effectively reduced the Maine Technology Institute (MTI) budget by $4.5 million over the past four years.
Here’s the rundown.
Funding for startup incubators
The governor included an annual appropriation of roughly $179,000 for what’s known as the Advanced Technology Development Centers System, which provides competitive grant funding to the Maine Center for Entrepreneurs in Portland, the Upstart Center in Bangor, and the Maine Aquaculture Innovations Center.
Former Gov. LePage in 2016 removed this appropriation from his final biennial budget. At the time, his press secretary suggested to Maine Startups Insider that MTI would take over providing the funding, though there was never any official plan to do so. The Legislature added the funding back into the budget bill, but at the lower amount of $100,000.
At the time, MTI made a commitment to make up the difference, providing $79,000 to the incubators last year and this year. However, there was never any official handoff of funding the tech center program from the Department of Economic and Community Development to MTI, according to Brian Whitney, president of MTI.
“Maine Technology Institute is to be commended for stepping up and supporting organizations like MCE when the ATC funding was unexpectedly reduced in the previous state budget,” Tom Rainey, executive director of the Maine Center for Entrepreneurs, told Maine Startups Insider. “MTI’s support was invaluable in not only filling the state funding gap, but also preserving a federal grant that required locating matching dollars and was in jeopardy when the cuts came.”
So the incubators effectively never lost the funding, but Gov. MIlls’ reinstatement of the appropriation signals her support for the incubators.
The funding isn’t a large amount, but does help fill out the budgets for the incubators, according to Rainey. The Maine Center for Entrepreneurs has a 2019 budget of approximately $840,000.
“It is encouraging to see the ATC funding fully restored in the governor’s budget. It signals that the new administration values and supports entrepreneurship, technology development and innovation in Maine,” Rainey said.
MTI Budget
Another area where Gov. Mills’ budget demonstrates a support for innovation is in how it treats the budget for the Maine Technology Institute.
While MTI’s baseline budget amount has been fairly consistent each year (around $7 million), the last two biennial budgets contained curtailment language that required MTI to return $1.5 million in FY16 and again in FY17 and $750,000 in each of FY18 and FY19. So, over the past 4 years, MTI experienced a total reduction in funding of $4.5 million.
Gov. Mills’ proposed budget does not contain that curtailment language, so for the first time in several years MTI will have its full funding allocation at its disposal.
“I was very encouraged by the governor’s budget as she demonstrated a strong commitment to Maine’s innovation economy by providing what I consider to be full funding of MTI after several years of curtailments,” Brian Whitney, president of MTI, told Maine Startups Insider.
R&D
One area where Gov. Mills’ budget doesn’t differ from her predecessors’ is when it comes to funding for research and development.
The governor’s budget includes proposed funding of $17.4 million each year for the Maine Economic Improvement Fund at the University of Maine System, which, in addition to the roughly $7 million to MTI, constitutes the state’s total R&D funding. That is the same level included in former Gov. LePage’s last budget.
However, the funding level falls short of where it should be according to a formula for determining the state’s R&D spending that’s been included in law (5 MRSA, chapter 149, §1664, sub-§3-A) for nearly a decade. Beginning in the FY10, the formula placed R&D spending at not less than 1% of General Fund revenue in the previous year, and then set it to increase by at least two-tenths of 1% each successive year over the next decade until R&D funding in FY20 should be at 3% of total General Fund revenue.
Based on that formula and a General Fund revenue of $3.5 billion, the state’s budget for R&D should be roughly $100 million.
When asked why Gov. Mills, like LePage before her, disregarded the required formula when determining a budget for R&D funding, the governor’s press secretary, Lindsay Crete, said the governor had maintained the current rate of R&D funding while directing the Department of Economic and Community Development to develop a long-term plan for economic growth in Maine.
“The budget proposal includes funding to maintain current research and development efforts while the department develops a comprehensive economic development plan which, in addition to identifying necessary state investments, will help Maine leverage federal and private funding to support our economic growth,” Crete said.
