DEPARTMENT OF COMMUNITY AND ECONOMIC DEVELOPMENT

    The proposed budget would fund $55 million in new community and economic development initiatives. Total grants and subsidies for community and economic development programs will grow to an estimated $550 million when anticipated federal assistance is included in the 1998-99 budget.

Workforce Development

    In an attempt to better coordinate the state=s 37 job training programs administered through 5 different state agencies, the Governor has created the Human Resources Investment Council. The budget provides $500,000 through the Department of Community and Economic Development=s Team Pennsylvania appropriation to coordinate and integrate these programs into a unified workforce development system.

    One of the largest single increases in the Department=s budget would provide an additional $11 million in funding for the Customized Job Training Program (CJT). This initiative would restructure (for the second time during Ridge=s first term administration) CJT to target $3 million of the proposed $29 million CJT appropriation toward the formation of industry led training consortia in key industries, while setting aside $8 million in CJT funds to guarantee grants for any manufacturing or high tech firms increasing employment.

Marketing

    The budget includes nearly $8 million in additional marketing initiatives. While several press reports have criticized recent Department ad campaigns for devoting more attention to marketing Governor Ridge than the commonwealth, funds for these marketing efforts would total more than $25.5 million in the Department=s budget.

    Marketing efforts through the Team Pennsylvania appropriation will include $4.5 million to expand the business calling program to make more than 10,000 visits during the next fiscal year and $500,000 to establish a new Entrepreneurial Assistance Network.

Technology Development

    The budget provides $9 million for several new technology 21 initiatives, the Ridge Administration=s master plan to spur new growth to attract and expand high tech development in the commonwealth. The budget includes $4 million within the Ben Franklin/IRC Fund appropriation to encourage collaboration among research universities to commercialize technology innovations and develop ATech Communities@ to fund community based technology infrastructure initiatives.

    The final budget agreement provides language to insure that 98 percent of the $34.45 million transferred to the Ben Franklin/IRC Board shall be allocated directly to the regional technology centers and the industrial resource centers. The current year budget only guaranteed a 95 percent transfer.

    Other funded initiatives from the $40 million Ben Franklin/IRC appropriation include using $2 million in reserves from the Ben Franklin/IRC Fund to develop a new Pre-Venture Seed Fund. The budget provides a new $3.3 million appropriation to fund the first year of a three year $10 million commitment to the Catalyst Stage Fund. The state commitment to this new venture capital fund will be combined with $30 million from the Public School Employees Retirement System (PSERS) and $10 million from Safeguard Scientific, who will manage the Fund.

Business Finance Programs

(Dollars in Thousands)

* The funds for the Small Business First Fund include a $5 million transfer from the Minority Business Development Authority and $7.5 million from the Hazardous Sites Fund. Both fund transfers must be approved in separate implementing legislation.

    The Administration intends to use the $5 million transfer from PMBDA to establish a special category of assistance within the Small Business First Fund. The funds will be targeted to distressed communities and eligible loan activity will be expanded to include retail and commercial businesses, and providing child care assistance.

    Funding for Infrastructure Development is increased by $13 million in the proposed budget. The budget includes a new $1.5 million appropriation for the Machinery and Equipment Loan Fund. PIDA funding was increased to $20 million.

Community Development Initiatives

(Dollars in Thousands)

    The budget funds some modest community development initiatives including the creation of a separate $3.1 million Main Street appropriation to revitalize central business districts. The current year budget includes $1 million for Main Street programs within the current Housing and Redevelopment appropriation. Housing and Redevelopment Assistance would increase by a net of $1.5 million. The budget provides an additional $300,000 for Shared Municipal Services.

    The budget includes no new appropriation for the Home Owners Emergency Mortgage Assistance Program (HEMAP). The current year budget provided a $10 million HEMAP appropriation. The lack of any new appropriation for HEMAP will likely result in the forced reduction of an estimated 500 loans.

Other DCED Programs

(Dollars in Thousands)

    Grants for Industrial Development Agencies are increased by $900,000. This increase will include funds for a new program to help small companies fund joint child care plans for employees.