State lawmakers are split, and not just along party lines, over continuing funding of an established grant program aimed at spurring research and economic development through allocations to state universities.
During a joint budget hearing on Monday, members of the Senate and Assembly split over funding for the Nevada Knowledge Account (also called the Knowledge Fund), a grant program for higher education facilities (UNLV, UNR and the Desert Research Institute) aimed at spurring “research and the commercialization of research in areas the state has targeted for economic growth.” The program was initially created under former Gov. Brian Sandoval nearly a decade ago.
Gov. Steve Sisolak’s recommended budget called for funding $5 million into the program split evenly over the two-year budget, but members of the Assembly motioned to only fund one year of the grant program at $2.5 million. Assembly members said that funding level matched the budget approved by lawmakers in 2019, and that increasing funding to the program now amid other proposed budget cuts didn’t feel like the right step.
“It just feels like with everything that we're doing across all budgets, that it's a win to keep the status quo, or it's a win to restore cuts that we made in the special session, and that trying to go above and beyond that funding for any particular program right now just doesn't seem prudent with what we're doing in other places in the budget,” Assembly Majority Leader Teresa Benitez Thompson said.
However, members of the Senate Finance Committee unanimously voted against that recommendation, with senators in both political parties saying that the state’s financial woes amid the COVID-19 pandemic underscored the need to invest in grant programs that could help broaden the tax base.
“Diversification of our economy is the really the only way we're going to get out of this mess,” Senate Finance Chair Chris Brooks (D-Las Vegas) said. “And this is a key component to helping us do that.”
The failure to agree on a budget recommendation for the program means the item will have to be hashed out during the process called “budget differences,” where Assembly and Senate members meet to reconcile differences in budget recommendations between the two legislative chambers. The deadline for budget differences is on May 15.
Assembly Ways and Means Committee Chair Maggie Carlton (D-Las Vegas) acknowledged that the issue would be addressed by budget committees later in the session, but said that lawmakers needed to keep all parts of the budget in perspective.
““There was a saying in the last fiscal crisis: save the seeds. Farmers never eat the seeds, you always save those because you want to be able to grow a program again, you never want to totally devastate a program,” she said. “So being able to keep it moving forward, when you consider some of the cuts and the situations that we're in right now, really is almost a win in some ways by not going backwards, by staying status quo.”
According to the budget closing document, the Knowledge Account was first created in the 2011 session as part of the overall restructuring of Nevada’s economic development apparatus. The program was funded for the first time in the 2013 budget cycle to the tune of $5 million per fiscal year, which continued until the 2019 Legislature (where lawmakers allocated only $2.5 million over the two budget years).
To-date, the grant program has received $32.5 million in state dollars. Though the program has no standard Return on Investment metrics (as it funds many different types of programs), the Governor’s Office of Economic Development estimates that the Knowledge Account program has leveraged $39 million in sponsored research contracts, led to 67 patents filed, 38 companies relocating to Nevada and 17 spinoff companies formed.
According to a summary of the Knowledge Fund’s 2020 annual report, the program helped fund 11 projects between November 2019 and October 2020, including projects related to robotics, gaming and hospitality, applied research, sports research, water innovation and autonomous vehicles.
Editor’s Note: This story first appeared in Behind the Bar, The Nevada Independent’s newsletter dedicated to comprehensive coverage of the 2021 Legislature. Sign up for the newsletter here.