Every year when the Jones Lang Lasalle Report is released listing the nations top life sciences cluster, our community has the same conversation, why is Chicago not in the top 10? Click here to read the report.
Ultimately we come to the same conclusion, if only we were better at translating research from our universities, or if we had more established entrepreneurs and if only those coastal VC firms would just invest in our community, then we would have a start up community like the coasts. Significant progress has been made in all three of these areas, something I plan to write about later on in the month. And I am not saying that those areas do not need to be addressed, but what we need to do is look at where these hubs are located, not the city but the state. State investment and incentives are a major piece to the equation, and as the investment community continues to be more risk adverse, it is the state and federal government that need to provide programs and funding to help start-up companies grow.
A good set of state incentives for the Life Sciences community builds a strategic advantage in creating and attracting companies. This is something that Massachusetts learned a long time ago.
Illinois is making strides with initiatives like the Angel Tax Credit, the Invest Illinois Venture Fund, The Illinois Technology Development Account, and the Illinois EDGE Tax Credit Program. But there are a number of programs missing that are critical to new company creation and the investment in the existing programs needs to be increased to keep Illinois competitive. I could spend the rest of this post and a few more going over these programs and comparing Illinois investment to other life sciences hubs, but the fact is Illinois needs to be able to invest in the life sciences community before we can review specific programs for investment. Case in point, did you know that Illinois has a SBIR matching program? It just has not been funded for the past 10 years or so.
If you want to read about suggested state incentives, click here to review the BIO organization’s “State Legislative Best Practices in Support of Biosceince Industry Development”.
We are a boot-strapped state, trying to help a boot-strapped start-up industry. Illinois Department of Commerce is doing everything they can with the resources they have. But at this point we are on a downward spiral created by our state’s unfunded pension liability — currently $96 billion, although unofficially it has been reported to have topped $100 billion.
$100 billion dollars is such a comically large sum (comparatively) that it was the ransom Dr. Evil requested in the second Austin Powers movie. But that is the unfortunate truth facing our state. As a result we are seeing essential programs and funds getting cut. Governor Pat Quinn’s office predict education funding will be cut by about $400 million in the next fiscal year. The forecast also calls for cuts to economic development programs and public safety.
Today Illinois lawmakers return to Springfield for a two month push to enact major pension reform. There is a moral and constitutional problem that needs to be addressed. Keeping funding for the hard working retirees who have earned their pensions, and having the legal flexibility to make changes to the system. Illinois constitution prohibits reduction in pension benefits to active and retired workers, and reform efforts have been inhibited by warnings made by union groups and others that they intend to file lawsuits to block implementation of many reforms.
Two weeks ago the Illinois House passed a bill sponsored by Michael Madigan, which limits cost-of-living allowances (COLAs) on pension payments, a significant factor in Illinois’ rising pension costs. Under it retired workers would get the current 3 percent compounded annual automatic increase only on the first $25,000 of their pension after the age of 67. That bill will be taken up by the Senate. Meanwhile, Senate President Cullerton’s effort to put together a bill that can pass constitutional review has already begun, with a relatively modest measure dealing solely with the Teachers’ Retirement System. The key to Cullerton’s plan, is the effort to offer pension beneficiaries a choice in how their benefits may change. The Cullerton plan offers something of value in exchange for reduction in pension benefits – in this case, health coverage in retirement – and this consideration could be key to any constitutional challenge.
We need to resolve Illinois pension problem, so the state can focus on programs and initiatives to build business, instead of alienating the business community. What can we do to help out? Take action: fortunately there are signs of some progress in Springfield. When the time comes, iBIO will activate the grass roots advocacy system and we all will need to encourage Springfield to act. I will follow up with updates and when the time comes I will forward along the call to action.
This is a conversation, not an editorial. Did I forget something, get it wrong or do you agree? Please Comment, Like, Re-Tweet and Share.