As economic experiments go, Science Foundation Arizona was showing
promising results.
Created by the Arizona Legislature in 2006, Science Foundation
Arizona was designed to help the state create high-tech—and
high-paying—jobs.
The nonprofit organization got off to a quick start. Public dollars
were matched by private dollars. University researchers were finding
new ways to bring their discoveries into the marketplace. New companies
were being created. Arizona’s science and math teachers were getting
new training.
But as state lawmakers faced multibillion-dollar budget shortfalls,
Science Foundation Arizona was a ripe target to some conservative
lawmakers who saw it as little more than corporate welfare. Earlier
this year, they yanked all funding for the program, leaving its future
in jeopardy.
Science Foundation Arizona was the brainchild of Arizona business
groups working with Gov. Jan Napolitano and the Legislature in an
attempt to develop the state’s fledgling science and technology
economy.
“The 21st century is going to be powered by brains, so they wanted
to invest in the biomedical and high-technology fields that create
high-paying jobs,” says Margaret Mullen, chief operating officer for
Science Foundation Arizona. “They wanted Arizona to get in that
game.”
Three regional business organizations—the Southern Arizona
Leadership Council, the Greater Phoenix Leadership and the Flagstaff
40—pooled their resources to raise $2.5 million a year to cover
administrative costs. In turn, the state agreed to provide $135 million
over five years, provided matching funds could be raised from the
private sector. Science Foundation Arizona would then use those dollars
to fund scientific research through grants, and support science and
math education in schools.
Ron Shoopman, president of Southern Arizona Leadership Council, says
that Science Foundation Arizona was a key step toward diversifying
Arizona’s economy and bringing more high-wage jobs to Tucson.
“We think it’s a pretty important investment in the future of our
state,” Shoopman says. “It’s created some interesting partnerships.
Raytheon has teamed with the UA Cancer Center to come up with a better
technology to identify and diagnose skin cancer. It’s real technology
that’s going to move to the marketplace pretty quickly.”
Science Foundation Arizona was modeled after Science Foundation
Ireland, which has been credited with helping build Ireland’s
scientific economy. Then-Science Foundation Ireland CEO William Harris
was recruited to set up a similar outfit in Arizona, with a promise of
state backing.
Supporters of Science Foundation Arizona say it delivered quick
results. With the state’s investment of $60 million in fiscal years
2007 and 2008, it was able to raise nearly $110 million in matching
funds and other contributions, according to a report prepared by
Battelle, a nonprofit that also invests in scientific endeavors. The
report credits Science Foundation Arizona for creating 757 jobs and 11
new companies in Arizona, including businesses that are improving
medical procedures, lowering the costs of generating solar power,
improving computer and communication circuits, and even developing jet
fuel from algae. The funding has also led to the filing of 50 new
patents and nine new technology licenses.
Nearly $43 million in Science Foundation Arizona grants came to
Southern Arizona to support organizations such as the Critical Path
Institute, according to Mullen.
On the educational side, Science Foundation Arizona helped train 681
K-12 science and math teachers and provided classroom instruction to
54,517 K-12 students.
Jim Gentile, president and CEO of the Research Corporation for
Science Advancement, says Science Foundation Arizona was capturing the
attention of science and technology companies around the country.
“You build a reputation as a state that can make things happen,”
Gentile says. “And that has a cascade effect that’s going to touch the
science and technology community in a very positive way.”
That opens up the opportunity for manufacturing jobs alongside the
research opportunities, says Gentile, who cites a partnership between
the Research Corporation and Science Foundation Arizona on an $8
million solar-energy initiative.
But with the cuts in funding, manufacturing for the project may not
happen in Arizona.
“We’re interested in moving things along fast,” Gentile says. “I
hope it happens in Tucson, but damn it, it’s going to happen
somewhere.”
When a newly elected Legislature began chopping the state budget
earlier this year, Science Foundation Arizona fell victim to the ax. A
group of five Republican lawmakers in the House of Representatives,
including Frank Antenori and David Gowan of Southern Arizona, insisted
that Science Foundation Arizona’s funding be zeroed out before they
would vote for a budget fix—even though some of that money had
already been committed by Science Foundation Arizona. The leader of the
group of lawmakers, Rep. Sam Crump of Anthem, dismissed the
organization as “corporate welfare.”
Science Foundation Arizona filed a breach-of-contract lawsuit,
arguing that the state owed them at least $18.5 million. Maricopa
County Superior Court Judge John Buttrick ruled in favor of Science
Foundation Arizona—but added that he didn’t have the authority to
force the Legislature to appropriate the funds.
Mullen says lawyers for Science Foundation Arizona are prepared to
continue legal action against the state, but Gov. Jan Brewer and
legislative leaders have asked her to hold off to see if they can
resolve the problem outside of the courtroom.
Antenori, a freshman Republican who represents District 30, says
state funding for Science Foundation Arizona gives him “heartburn,”
because it doesn’t provide any kind of royalties back to taxpayers if
research that the state supports turns out to be lucrative.
“I’ve been trying to find a way to fund it so it’s not just a $22
million-a-year giveaway,” Antenori says.
Antenori tried to persuade his colleagues to support a program in
which state funds invested on behalf of retirees would be used to fund
Science Foundation Arizona, with a payback returning to those funds if
the research turned out to be profitable. But the bill ran into
opposition from the boards charged with overseeing the funds and never
made it out of committee.
“It had great opposition from the retirement board,” Mullen says. “I
applaud him for looking for a permanent funding solution, but those
sorts of concepts need to be reviewed and agreed to by the entity, and
the retirement board did not agree to this.”
Mullen cautions that Antenori’s plan could run into other legal
problems, given Science Foundation Arizona’s nonprofit status.
State Sen. Jonathan Paton, a Republican who represents District 30,
says the state should pay Science Foundation Arizona the $18.5 million
that is owed.
“I think it’s important to live up to our obligations, whether you
like it or not,” says Paton. “We gave them the impression that they
should go ahead and proceed a while ago, and you can’t just flip on
that.”
But given the state’s precarious financial situation, Paton is
skeptical that future funding would be available for Science Foundation
Arizona.
Democratic Rep. Steve Farley of District 28 says Democrats have
tried to restore funding for Science Foundation Arizona, but
Republicans have largely ignored Democratic proposals in budget
talks.
Shoopman holds out hope that the state will find a way to continue
to fund Science Foundation Arizona.
Science Foundation Arizona can continue to build collaborations
without state support, according to Mullen, but in a “diminished
role.”
“It’s unfortunate that we’re in the situation we’re in,” says
Shoopman, “but I’m not going to give up on it.”
This article appears in Sep 10-16, 2009.
Okay Jim, now that you have told us how wonderful this operation was and what a loss it is, perhaps you could provide some specific examples on just how Arizona materially benefited from this group.
You also somehow failed to mention that the Fund was used by our previous governor as a slush fund to assist those who supported her.
If this is so wonderful, then why can’t it continue without match funding from the State?
Antenori looked at what it delivered and how it was used and then looked at the state treasury and the budget and make a priority, results based choice to eliminate it.
You see Jim, Antenori knows that unlike the bible where Moses could tap a rock for water, you, and Frank Antenori cannot tap a rock to make dollars available to spend.
The fiscal conservatives in this State, which you are apparently not one of them, know that only spending what you have and not adding to the tax burden in a down economy is the smart play. Choices had to be made, and Frank Antenori, a rising star in the State, routinely makes the tough choices and the smart plays for the State.
Ken: Either you believe that the state needs to diversify its economy or you don’t. Either you believe that the U.S. needs to reclaim its position as the scientific leader of the world in the 21st century or you don’t. Either you believe that finding ways to attract high-wage, high-tech jobs is a good idea or you don’t. Those are matters of individual values. Yours probably differ from mine.
As far as a slush fund for Napolitano’s supporters goes: As the story points out, the idea was backed by business leaders in Tucson, Phoenix and Flagstaff. They’re hardly a left-wing bunch.
The choice to eliminate it included eliminating funding that the organization was owed by the state, as a court judgment has shown. Is it really fiscally conservative to ignore your debts while 10 percent interest piles up every year?