I’m one of the few commentators left, apparently, who thinks that Virginia’s political leadership should return some of the state’s mounting budget surplus to the taxpayers. But that’s not going to happen. So, it’s time to revert to Plan B. The next best use of surplus funds is to invest in programs and initiatives that either (a) expand the tax base through economic growth, or (b) achieve efficiencies that reduce future outlays.
Gov. Warner has announced two new initiatives: creating a $250 university research fund and spending $460 million to restructure state and local mental health services. The research fund, I believe, is a good idea. I don’t know enough yet about the mental health initiative to comment thoughtfully.
Under Warner’s proposal, according to Michael Hardy’s story in today’s Times-Dispatch, state colleges and universities could tap the research fund by matching grants with money they raised on their own. The funds could be used to recruit top researchers, build specialty laboratories or purchase cutting-edge equipment.
A top economic development goal of the Warner administration has been to improve the rankings of the state’s major research universities. To date, no significant gains have been made, mainly because competing research universities are all trying to raise money to improve their rankings, too. The best that can be said is that Virginia research institutions have held their own. This research fund represents the Warner administration’s effort to make good on its promise to higher education.
An investment in university research is an investment in economic growth. When universities succeed in recruiting top research scientists, they usually bring multi-millions in federal research grants along with them. Additionally, intellectual property created by these scientists often can be spun off in entrepreneurial start-ups (although Virginia’s track record in this regard has been mixed).
Virginia universities presidents will have no trouble putting the research funds to use. Instructive is a recent press release from George Mason University:
President Alan Merten called upon [Northern Virginia] legislators to provide the additional funding needed to propel George Mason into a world-class research university that is able to compete for the high-tech and biotech industries that are the foundation of the economic future.
In a plan that asks the state to add $5 million a year for the next five years to George Mason’s current budget, the university would specifically recruit research faculty with national and international reputations to focus on cancer biology and bioengineering; neurosciences and bioengineering; and global biosphere.
According to Merten, the university predicts their research dollars will grow to $150 million in five years with the goal of placing George Mason within the top 100 research universities in the nation.
Endowing a research fund with a one-time shot of $250 million, only a fraction of which would go to to GMU, isn’t the same as increasing GMU’s annual budget by $25 million a year over five years. But Merten is a smart fellow — I’m confident that he, like his counterparts at Virginia Tech, UVa, VCU and elsewhere, can figure out a way to restructure their plans to take advantage of Warner’s idea.
