Can Jay Inslee save the Life Sciences Discovery Fund?
Eighteen Democratic state legislators want Gov. Jay Inslee to save the state's Life Sciences Discovery Fund.
The roughly $10 million fund would be phased out three years earlier than scheduled under a compromise supplemental operating budget that the Legislature passed for 2014-15. The 18 lawmakers want Inslee to veto that segment of the budget. The Science Discover Fund was part of the House's proposal going into last session's budget compromise talks, but not the Senate's. In the give-and-take of negotiations, the Senate's stance prevailed.
"We believe that ending this program prematurely is short-sighted," said the March 20 letter to inslee from the five senators and 13 representatives who suppoert keeping the fuind. "This decision comes at an especially bad time for our life siences sector. Due to legislative inaction, our state's research and development tax credit will expire at the end of the year. To prematurely close the (Life Sciences Discovery Fund) at the same time will have a chilling effect on our state's efforts to attract and retain the jobs and investment that this sector brings to our state."
In 2005, then Gov. Chris Gregoire and the Legislature established a program to spend $350 million — $35 million a year from 2008 though 2017 — to bolster life sciences research and use that research to create new jobs. The $350 million comes from the 1998 settlement between tobacco companies and numerous states, including Washington.
Washington's Life Sciences Discovery Fund finances a broad spectrum of health-related research and programs: studies on brain, breast cancer, blood and diabetes; developing technologies for human cell therapies; creating strains of gluten-free wheat; improving the safety of surgery in state hospitals; helping rural communities deal with mental health and substance abuse; developing "smart home" technology for the elderly; and teaching the latest CPR techniques to first responders.
The actual tobacco settlement payments to the state and the subsequent research allocations from the Life Sciences Discovery Fund have been close to the original projections — about $33 million each in fiscal 2008 and fiscal 2009. But the Legislature has been dipping into Washington's tobacco settlement revenues to pay for other programs; less than $15 million went to life sciences research in 2010. Since then, tobacco settlement appropriations to the fund have been less than $10 million annually, with the bulk of the tobacco settlement money getting funneled into the state's general fund.
John DesRosier, the executive director of the life sciences fund hopes that the 2013-2014 appropriation — the check is actually being sent to the fund on April 15 — will be $9.5 million. When the fund was set up in 2007, the 2014-2015 commitment was supposed to be at least $26 million.
DesRosier said that the supplemental budget legislation showed no appropriations for the Life Sciences Discovery Fund in the 2015-2017 biennium, effectively closing the fund three years early. The fund, said DesRosier, will be able to honor its current commitments. So far, roughly $80 million in Life Sciences Discovery Fund money has been spent, with almost $20 million earmarked to honor the fund's existing obligations.
The $80 million spent so far by the Discovery Fund has leveraged an additional $450 million in outside investments, which translates into roughly 3,000 new jobs, according to DesRosier, who notes that the program's research has also led to $67 million in health care savings. Since 2007, the Discovery Fund has awarded 79 grants to at least 40 Washington companies. More than 20 of those beneficiaries have been start-ups.
Life sciences is the state's fifth largest business sector, according to the Washington Biotechnology and Biomedical Association. WBBA figures show about 34,000 direct biotech jobs, a number that grows to roughly 92,000 when the ripple effects and support jobs are added. The biotech industry contributes roughly $11 billion to Washington's economy with more than 400 drug research and medical technology firms across the state.
"It's puzzling," said DesRosier, about the push to eliminate the fund, especially given the legislature's emphasis on job creation. "We have a variety of projects pointing in that [job creation] direction."
Photo of Jay Inslee by Tom James.