LANSING – Meeting for the first-time since the 21st Century Jobs Fund was signed into law, the Michigan Strategic Fund was encouraged Wednesday to move quickly on creating a distribution model for about $300 million dollars in tobacco settlement securitization money that will go to fund Michigan technology start ups.
Headed by James Epolito from Michigan Economic Development Corporation, members of Strategic Fund Board discussed how to stimulate high-tech job growth in Michigan, trying to create a distribution model for grants, loans and investments.
Referring to the seemingly insurmountable task of pulling the state from an economic decline, Epolito commented: “I’ve been on the job four months now and had two major worries. The first was that the 21st Century Jobs Fund would not pass, and the second was that it would.”
Epolito expressed urgency as he described ongoing budget cuts affecting economic development programs while there’s a growing need to invest in the high-tech industry. He told fellow board members, “We are on a bit of a burning platform here.”
But not all members felt that quicker is better. Richard Wilcox, a returning board member and president of Wilcox Association, a professional service firm in Cadillac, suggested the group move slowly to ensure efficient programs.
Epolito optimistically suggested the group begin distributing funds in January rather than the June 2006 deadline set by Governor Jennifer Granholm’s Job package.
The Board discussed how the money should be concentrated, ultimately deciding to prioritize loan programs for the commercialization of products rather than development. However, grants, as stated in the 21st Century Jobs package, can only be allocated to higher education institutions and non-profit organizations, which would likely focus on research and development.
The group also voted to allocate 4 percent of the funds, or up to $15.76 million, to administrative costs because provisions in the jobs package capped administrative costs at that amount. That money would be divided among the Strategic Fund Board, Jobs for Michigan Investment Fund and a strategic commercialization board, as well as any outside agencies that provide services.
The Strategic Economic Investment and Commercialization Board will decide through a competitive process which projects will receive funding. The 19-member Commercialization Board includes university presidents, high-tech entrepreneurs, economic developers and various department heads. It plans to meet in January.
The 21st Century Jobs Fund strives to increase jobs in the high-tech sector through investment and lending programs. The Strategic Fund will oversee about $300 million of the $400 million available because a portion of the funds have been promised to programs such as forest, tourism and agriculture, these programs are also subject to the competitive loan and grant process.
