The business community Wednesday cheered Gov. Christie’s budget-address pledge to double the tax credit for biotech or high-tech entrepreneurs.
The increase in the tax credit rate will be phased in from 50 to 100 percent by January 2012, according to BioNJ, which serves as an advocate for that sector.
That commitment was seen as good news, especially since the state’s Commission on Science and Technology received no funding in this fiscal year’s budget.
“One of the things we have suffered from in the research and development sector is a diminished interest on the part of federal and state governments,” said Katherine Kish, one of the founding organizers of Einstein’s Alley, a private, non-profit that encourages high-tech business growth in New Jersey.
And Debbie Hart, president of BioNJ, said in a prepared release: “We believe this action reflects the governor’s recognition of the growth that has happened in this industry over the past decade and its potential for continued growth going forward.’’
According to BioNJ, there were 80 biotech companies in the state in 1998, and today there are more than 300, employing more than 15,000 people.
But despite such growth, business leaders said they have seen R&D funding suffer as part of the overall recession of the last few years.
“One of the proverbial cans that gets kicked down the road is funding for R&D and education,” said Kish, adding that the two are inextricably related.
Evidence of that was seen in the 2010-2011 budget, when the N.J. Commission on Science and Technology received no funding reflecting the state’s budget problems and the Christie administration’s goal of having a smaller government.
The commission began approximately 25 years ago, and before its end provided grants and support to encourage research and innovation, with a budget that sometimes reached $50 million.
One of the commission’s programs that Kish cited as particularly valuable paid for a New Jersey graduate’s salary for a period of time if they worked for a New Jersey company. That and more were lost in the decision to eliminate funding for the commission, she said, which made Christie’s upbeat comments in his budget address very welcome.
In addition to boosting the tax credit, Christie also plans to add $30 million to the Technology Business Tax Certificate Transfer Program, restoring its previous level of $60 million, according to Hart.
The restored funding, if it remains in the budget once it winds its way through the Legislature, may help with startups that originate at universities, spinoffs from other bio-techs, and with luring out-of-state companies, according to Hart.
“Looking to the future,” she said, “the question we must ask ourselves is: How much more growth could New Jersey experience with increased government support?”