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Budget cuts will affect MN economic development efforts

Two Minnesota entities charged with encouraging early-stage tech and biotech companies to prosper in the state are dealing with budget cuts following the longest state shutdown in the nation’s history. The state legislature has decided that encouraging economic development and entrepreneurship, particularly in science and technology, is not so important. BioBusiness Alliance of Minnesota had asked legislators […]

Two Minnesota entities charged with encouraging early-stage tech and biotech companies to prosper in the state are dealing with budget cuts following the longest state shutdown in the nation’s history.

The state legislature has decided that encouraging economic development and entrepreneurship, particularly in science and technology, is not so important.

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BioBusiness Alliance of Minnesota had asked legislators to maintain the $1.75 million funding it got when it was created, but got a one-time grant of $356,000 for the current fiscal year, said Jeremy Lenz, chief operations officer at the nonprofit. The fledgling Minnesota Science and Tech Authority, for which Rep. Tim Mahoney wanted $10 million, was given a meager $714,000 over two years, the Star Tribune reported.

Cuts at BBAM were expected, Lenz said. (They were also foreshadowed in a MedCity News article late last year.)

Lenz wouldn’t go into too much detail about how the organization will prioritize its activities but said that the nonprofit has been trying to find money from elsewhere instead of being exclusively dependent on the state. For instance, BBAM worked with various vendors at the Renewable Materials Conference in Moorhead in April and was paid for services and got sponsorship revenue.

“We’re starting discussions with our board,” he said.

A champion for economic development, Mahoney expressed his frustration at the developments Thursday. Mahoney had authored a bill that sought $10 million for the Minnesota Science and Tech Authority out of increased revenue from income taxes that the state collects.

“There is a pervasive feeling at the legislature that the government has no role in business,” he said. “I just don’t understand that.”

He added that the $714,000 that the Minnesota Science and Tech Authority got was still better than some earlier proposals he heard on funding that group, which is housed inside of the Department of Employment and Economic Development.

“We were fighting for a while to keep Betsy’s salary,” Mahoney said in reference to Betsy Lulfs, the executive director of the organization.

What BBAM and the Science and Tech authority can do with such little money is an open question. Some may question why any money at all should be given if the amount is so small.

But ideological views about government’s role in business aside, Minnesota’s recent track record in public-private partnerships has left much to be desired.

The Elk Run development in southeastern Minnesota for which the state is building a multimillion-dollar interchange on Highway 52 has yet to get off the ground after numerous delays. The Minnesota Partnership for Biotechnology and Medical Genomics is involved in a lot of research, but has not created the industry jobs many had hoped for. The incubator University Enterprise Labs in St. Paul similarly has not been a catalyst for tech transfer.

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