But DBED funding program, stem cell research are cut...
Monday, April 13, 2009
Budget ax spares biotech tax credit
But DBED funding program, stem cell research are cut
by Kevin James Shay | Staff Writer
Bioscience industry leaders got their wish for full funding of the state's biotechnology investment tax credit, as the House on Saturday passed a $13.8 billion operating budget that included $6 million for the popular program.
The House earlier voted to slash that fund by $2 million. But the Senate approved the full funding, and a compromise by a House-Senate conference committee included $6 million for the biotech tax credits.
The full Senate planned to vote Monday — the final day of the legislature's regular 90-day session — on the final version of the budget, but it is not expected to reduce the biotech tax credit. Owners of biotech companies, led by the Tech Council of Maryland, launched a campaign to lobby for full funding of the program.
The tool, which formed in 2006, allows investors in Maryland biotechnology companies to take a 50 percent credit against state income taxes. The biotech that receives the investment must have headquarters in Maryland, have fewer than 50 employees and be in business less than 12 years.
Last July, the credits ran out on the first day applications were taken, with $8.5 million worth requested by local biotechs, officials said.
However, other programs of interest to Maryland business executives were slashed by the conference committee. The Maryland Economic Development Assistance Authority and Fund, which has provided more than $160 million in loans, grants and other aid to help companies expand or relocate to the state since forming about a decade ago, is expected to see a $6 million reduction in both this year and next fiscal year.
That is less than the $10 million cut legislators originally set for that program, whose beneficiaries include telecommunications company Comcast Corp. and Rockville biotech Novavax. The fund is the "workhorse" tool that the state Department of Business and Economic Development uses to retain and attract companies, said Jim Henry, managing director of finance programs for DBED.
Funding for stem-cell research next fiscal year was reduced by the House-Senate committee by $3 million to $15.4 million, although the Senate sought a larger cut. The state arts council saw its funds reduced by $3 million.
In addition, the program started last fall to help subsidize small employer's health insurance costs for workers was reduced by the House-Senate committee by $13 million. The program has not had as many businesses sign up as officials expected, largely due to the flagging economy, said Nicole Stallings, chief of government relations and special projects for the Maryland Health Care Commission.
Some business owners have said the requirements are too restrictive. Legislators passed a bill that would expand eligibility, including a provision to let businesses with as many as 19 employees tap the subsidies.