It’s safe to say a lot has happened in response to COVID-19. The impacts have been felt in every community and industry.
On April 2, Missouri Governor Mike Parson announced $180 million in spending restrictions to address the budget shortfall. Included in that withholding was $2.91 million from the Missouri Technology Corporation (MTC) – the ENTIRE FY20 MTC budget allocation.
In a completely unprecedented move, the state is calling for MTC to pay back FY20 funds already expended. This is concerning not only for our programs and our successful operations, but sets a very dangerous precedent for all publicly funded entities. Historically, budget withholds have been forward-looking only.
We know these are tough times. We were fully expecting a withhold of future funds. The situation we find ourselves in now exceeds the definition of a ‘withhold.’
These funds have been allocated to and already spent by innovation centers, entrepreneurship resource groups and startups across the state – innovation centers like the efactory and Jordan Valley Innovation Center.
What the Withholding Means for Entrepreneurship & Innovation in Springfield
The Jordan Valley Innovation Center and efactory collectively receive an annual innovation center allocation from the Missouri Technology Corporation to help support both of our operations. Our FY2020 Innovation Center allocation was $161,539. We match this annual allocation dollar for dollar with money from our operational fund. Match funding means the state gets the best bang for their buck. An annual investment of less than $200,000 produces far-reaching economic impacts for our region.
This funding is in jeopardy not only for 2020, but for 2021 and beyond. To have a Q3 and Q4 withholding would be a blow, but we could sustain it. To have to pay back Q1 and Q2 funding that has already been spent on top of receiving no additional funding would be devastating to our programs.
The efactory is also in the second year of a three-year $350,000 MOBEC grant award ending at the end of 2021. This grant provides funding for operations and programming that are critical to assisting entrepreneurs and startups in our community.
The Missouri Technology Corporation is the state’s greatest advocate for startups and entrepreneurship. Defunding Missouri’s entrepreneurial and innovation support infrastructure is crippling. By forcing MTC to surrender their entire FY20 budget and an anticipated deep FY21 budget cut looming, MTC will be unable to adequately support our state’s innovation centers and startups.
In recent years, the MTC budget has been cut dramatically, from a high of $23 million for FY2017 to the current level of $1 million. These cuts send a clear message that Missouri is not open for business and is not ready to support startups and entrepreneurship.
The State of Missouri is attempting to pull the plug on the future of our state’s economy – entrepreneurship and innovation. To terminally defund entrepreneurship and innovation efforts is a fatal misstep on behalf of our state government. It’s a move that our community will likely not recover from.
We Need You, Springfield!
We’re proud of the work we do. We’re proud of the clients we serve. And we know the role of entrepreneurs, innovators and risk takers will be more important to our state’s economy than ever before as we move out of this crisis.
Our model is proven to be successful and produce strong returns on the state’s investment. IDEA Commons is a shining example of why public-private partnerships work. Investments like those from MTC are the best money our state can spend to spur economic development and generate a strong ROI.
What we ask of you is this. Contact stakeholders to let them know what the efactory and JVIC mean to you and our community. Let them know the importance of maintaining state funding for the Missouri Technology Corporation and innovation centers.
- Office of the Governor
- Members of the Missouri House of Representatives & Missouri Senate
- Missouri Department of Economic Development
- City of Springfield
- Springfield Area Chamber of Commerce
We also encourage you to join NEXT Missouri, a statewide coalition focused on advocating for pro-entrepreneurship policies and regulations. NEXT Missouri has also created an action center that makes it easy to draft and send letters to stakeholders.
We’ll be doing all of the above and more while we continue to help businesses respond to COVID-19.
Community is who we are. Forward is where we’re (still) going.