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States' New Economy Readiness Graded
by Liza Porteus
California, Colorado, Connecticut, Massachusetts and Maryland are the states in the best position to take advantage of growth in the new economy, according to a Milken Institute study released this week.
The study ranked states based on 12 criteria critical to a region's future high-tech growth: including money spent on research and development; percentage of advanced degrees; number of patents issued; amount of venture-capital investment; number of business startups; and value of proceeds from initial public offerings (IPO). Texas, Arizona, Iowa and Louisiana were among the most-improved states, while New Mexico, Vermont and Maine fell the most in the rankings.
"Some people have given up on the new economy because of so many dot-com failures, and the implosion of tech-stock valuations," said Ross DeVol, director of regional and demographic studies at the institute. "That's a big mistake. ... Those regions that can best take advantage of high-tech will be rewarded."
Massachusetts claimed the top spot because of its vast research capabilities, highly educated population and venture-capital investments. California did well in exports, the number of patents issued, venture-capital investment, business startups and IPO proceeds. But New Mexico fell 11 positions because it has not been able to use its research capabilities to produce commercial products. Arkansas, South Dakota, West Virginia, Mississippi and Wyoming will have a difficult time succeeding in the new economy, DeVol said.
Despite Massachusetts' favorable rating, the legislature cleared only two tech-related measures this year. They were:
- H.B. 1753, which allows for the installation of more telecommunications lines to transmit, receive and switch voice, data and video services.
- H.B. 3763, which establishes a fund in the Hull, Mass., police department for modernizing equipment and technology.
Governors Weigh In On Stimulus Package
The National Governors Association (NGA) recently forwarded to the Senate the governors' recommendations for a refined economic stimulus package. The recommendations are based on states' fiscal positions as detailed in an Economy.com report.
Sent to Senate Majority Leader Thomas Daschle, D-S.D., and Minority Leader Trent Lott of Mississippi, the letter notes that many states face "mounting fiscal problems" and a cumulative revenue shortfall of $10 billion and growing, with the cost of homeland security adding to the debt. The House-passed stimulus bill would further reduce state revenues by at least $5 billion annually, according to NGA.
NGA also notes that, absent federal funding for state compliance with the Health Insurance Portability and Accountability Act (HIPAA), "states will have little choice but to divert scarce funds to comply with this federal mandate." HIPAA moves the healthcare industry onto a single, computerized format and also led to the adoption of new medical privacy rules. Using state funds to comply with HIPAA would mean less money for education, state services, capital investment, infrastructure improvements and homeland security, according to NGA.
NGA also recently asked President Bush for a fair allocation of federal resources across the states for homeland security and critical infrastructures protection. In a letter to Bush, governors asked for the creation of a discretionary fund at the White House Office of Homeland Security that would provide states money for sustained security at energy facilities, international borders, airports and other infrastructures.
Industry Lends A Helping Hand In Relief Effort
Some of the nation's leading computer, technology, consulting and accounting firms have agreed to donate products and services to help establish a confidential, shared database of World Trade Center victims, New York Attorney General Eliot Spitzer recently announced.
The database will allow charities and government agencies involved in relief efforts to track giving and coordinate activities. The team includes IBM, SilverStream Software, Qwest Communications and KPMG. The firms are working with charities, the Federal Emergency Management Agency and Spitzer's office to ensure database security.
The Red Cross, Safe Horizon, Salvation Army and the September 11th Fund also have announced their intention to help. Spitzer established a Web site of more than 190 different charities and other groups involved in the relief effort.
The First Internet Tax?
Although some federal lawmakers predicted chaos would ensue when the Internet access-tax moratorium expired last month, the NGA claims that the only new Internet tax is the one proposed by the federal government to pay for aviation security. The plan, adopted unanimously by the Senate with White House support, would impose a new federal tax on airline tickets purchased online or over the counter.
The move illustrated that the federal government does not believe purchases over the Internet should be exempted or treated differently from those made at brick-and-mortar stores, NGA officials said. "I know of no governor who intends to impose new taxes on the Internet," NGA Chairman John Engler, the governor of Michigan said in a statement.
In Iowa, meanwhile, Gov. Tom Vilsack and others said last week that they will not tax Internet access, even though it could help ease the state's $158 million budget shortfall, reports The Des Moines Register. State Sen. Larry McKibben said Congress could revive the moratorium. "I think that all of the signals that we have gotten from congressional leaders is that states would be poorly advised to try to proceed rapidly in this area."
State CIOs To Focus On Security
The National Association of State Chief Information Officers (NASCIO) will hold a forum on security and critical infrastructure protection from Nov. 13-14 in Washington.
In other NASCIO news, Governing magazine recently named Aldona Valicenti as one of nine government executives to win its prestigious award recognizing "public officials of the year." Valicenti, the CIO for Kentucky, served as NASCIO's 2000-2001 president.
Governing selected Valicenti, Kentucky's first CIO, for her pioneering efforts in transforming state business processes to meet the demands of an electronic world.
Fast Times At High-Tech High
The Greater Albuquerque Chamber of Commerce and representatives from Albuquerque public schools took a trip to San Diego this week to visit High-Tech High, a charter school that seeks to provide graduates with relevant academic and workplace skills for a technologically based society. "By studying the best practices of schools nationwide, we can mirror their efforts and successfully reform our public education system at home," said chamber President Terri Cole.
Mayors Elected In Technology Havens
Voters in 362 U.S. cities with populations of more than 30,000 elected mayors on Tuesday, and several of the elections were in tech-heavy cities.
Internet consultant R.T. Rybak won the mayor's seat in Minneapolis, defeating two-term Mayor Sharon Belton, while in neighboring St. Paul, state Sen. Randy Kelly eked out a victory over City Council Member Jay Benanav, who may challenge the results.
Incumbent mayors won in Boston, Pittsburgh and Charlotte, N.C. Boston Mayor Thomas Menino, a Democrat, easily beat challenger Peggy Davis-Mullen, securing a third term there. And in Pittsburgh, Democratic incumbent Tom Murphy easily brushed off three poorly funded opponents.
Pat McCrory, Charlotte's Republican incumbent, coasted past Democrat Ella Scarborough. McCrory has met with White House Homeland Security Director Tom Ridge on a coordinated homeland security plan.
Finally, three different Utah cities elected mayors. In Provo, Mayor Lewis Billings defeated challenger Dave Bailey; Orem Mayor Jerry Washburn went unchallenged; and in Salt Lake City, Jill Remington Love unseated Mayor Roger Thompson.
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