A detailed report estimating the potential impact of the Citizens for Healthy Michigan ballot proposal on the Michigan Life Sciences Corridor was presented to the Life Sciences Corridor Steering Committee today.The report found the ballot measure would potentially reduce funding for Life Sciences Corridor-sponsored projects by nearly $50 million annually.
This annual reduction includes both the cut in direct funding and required matching funds for Corridor funded projects.It also takes into account the loss in expected yields from the Corridor’s loans; equity stakes investments and direct investments in venture capital funds.
“Within the past six months many states have announced that they have eliminated or significantly curtailed their life sciences initiatives.Michigan, on the other hand, has received national acclaim for its continuing commitment to the program and the positive results that have been achieved,” said Doug Rothwell, chairperson of the Life Sciences Corridor Steering Committee.“Approval of this ballot proposal would significantly reduce funding for the Life Sciences Corridor and associate Michigan with other states that are pulling back, rather than moving forward, in this important industry sector.”
Under the ballot initiative, the Life Sciences Corridor would receive 13 percent of the state’s tobacco revenue settlement dollars.The Corridor would receive an estimated $42 million in fiscal year 2003 funds, a reduction of about $3 million from fiscal year 2002.In fiscal year 2004, the funding amount would be reduced to about $37.8 million, an estimated $12 million reduction.
The state of Michigan has committed $1 billion over 20 years from its tobacco settlement money to energize the life sciences industry.About 300 life sciences businesses are located in the state, with more than 16,500 workers and $1.6 billion in annual sales.
In 2001, Michigan welcomed at least 22 new life sciences start-up companies.Private and public investment in life sciences activities exceeded $2.9 billion in the state creating more than 2,000 new jobs since the inception of the program.
Since its creation in 1999, the Life Sciences Corridor Fund has invested $145 million in 78 awards.This includes assistance to 16 early stage life sciences companies to help further their growth plans.The assistance also has impacted about 200 employees funded directly through Life Sciences Corridor awards.
The Citizens for a Healthy Michigan initiative diverts more than $300 million annually from the state’s budget.Voters will decide to accept or reject the ballot initiative on Tuesday, November 5.If approved, the proposal would end the Michigan Merit Award for students statewide.It also would change Michigan's constitution requiring the majority of the funds to be set aside for health care programs.
To View this report in PDF format CLICK HERE.
The Michigan Economic Development Corporation, a partnership between the state and local communities, promotes smart economic growth by developing strategies and providing services to create and retain good jobs and a high quality of life.
# # #