There is a lot of talk and understandable handwringing about declining state revenues for higher education. The difficulty of finding funds for expansion, let alone maintenance, is often painful for college and university executives, as well as for many state leaders.
But even amid cash-strapped state governments, creative solutions can be found to maximize resources. In my home state of Arizona, Gov. Doug Ducey has found an intriguing approach to redirect a small amount of tax money for a large, long-term investment into the development of our three public universities and enhance their role as drivers of economic development and growth.
Mr. Ducey intends to draw on some $30 million in annual state taxes — what are known as transaction privilege taxes paid by Arizona’s three universities. With a matching amount from the schools serving as collateral, this can fund a billion-dollar bond for infrastructure construction and maintenance.
At Arizona State University, for example, this makes it possible to expand the commitment to scientific and medical research and development, strategic partnerships and innovation. This includes the construction of three buildings: an interdisciplinary science and tech building for global work on sustainability, an anchor building for the university’s biomedical campus, and a home for health care solutions involving ASU’s major alliance with Mayo Clinic and its medical school. The faster this expansion happens, the sooner ASU can add to its research initiatives and burgeoning collection of homegrown, job-producing startups and spinouts.
In the race for research dollars and the effort to drive scientific and technological breakthroughs, every dollar counts. That’s why this kind of creative use of state money is so important. Rather than $30 million going into the general fund, it becomes a significant investment that can help expand the state’s economy and drive innovation. Ultimately, the benefits accrue to both the state and far beyond.
The history of America’s technological triumphs has depended on the combination of public and private investment. At a federal level, we can trace the existence of time-sharing computers, microprocessors and the internet to investments made by the Defense Advanced Research Projects Agency, better known as DARPA. Beginning in 1958 after the Soviets’ launch of Sputnik, that federally funded research not only led to technologically advanced applications well beyond defense, it also spurred the success (and high-paying jobs) at Intel, IBM, HP and other top tech companies such as Microsoft and Dell. It can be argued that there would be no Google or Amazon or Facebook without DARPA and that national investment.
Today we can identify states and universities that both recognize this tradition and are focused on innovation and knowledge enterprise that produces concrete, real-world impact. Some of our largest state governments spend hundreds of millions of dollars on R&D — more than $500 million by California, over $365 million by New York, $185 million by Texas and nearly $200 million by Florida in 2015.
Smaller states generally can’t compete with that scale. But it’s not always a question of how many dollars are invested, rather how well-targeted those dollars are to yield genuine advances.
Which brings us back to Arizona. Hard hit by the Great Recession, it has clawed back from a nearly $3 billion deficit in 2010 to a balanced budget. Mr. Ducey’s unique approach to using the state’s resources to support higher education and advance its competitive position is a model for other cash-starved states who also recognize that colleges and universities are critical catalysts to workforce development, economic growth and prosperity.
Recently, a new ASU spinout was launched to produce a gene-sequencing technology that allows physicians to tailor and accelerate cancer treatments around patients’ individual disease and immune responses, Emerging from the work of scientists at the university’s Biodesign Institute, one of the state’s largest investments in research, Gemneo Bioscience is the kind of enterprise that not only can be a driver of economic growth — it also can save lives.
It’s surely too early to estimate how many lives may be saved by other breakthroughs resulting from the state’s investment in sophisticated R&D. But it’s clear that it will take creative funding ideas to prove that investing in advanced research can be the difference between life and death.
• Matt Salmon, a former member of the U.S. House of Representatives from Arizona, is vice president for government affairs at Arizona State University.