A state fund that provides money to Iowa startups is slated to lose about $2 million.
The Iowa Senate approved a bill last week intended to make up for a $118 million gap in the state’s budget for the current fiscal year, The Des Moines Register reported. The deal includes cuts to higher education and a variety of transfers.
Those transfers include taking about $2 million out of Iowa’s Innovation and Commercialization Fund. The Iowa Economic Development Authority uses the fund to provide financial awards to startups.
(Update: Iowa Gov. Terry Branstad signed this budget bill Wednesday, Feb. 1.)
The authority does not believe the transfer will result in fewer awards to startups this year, a spokeswoman said.
“We don’t anticipate it to be a cutback. We are planning for what we think the demand is,” IEDA spokeswoman Tina Hoffman said.
The innovation fund began fiscal 2017 (July 1, 2016) with $11.8 million, Hoffman said. By the end of December, the fund had about $9.8 million, according to the Legislative Services Agency.
Gov. Terry Branstad’s budget proposals call for providing IEDA with $7.7 million for the innovation fund in fiscal years 2018 and 2019.
Hoffman said the department does not consider this a budget cut. Instead, it’s viewed as a baseline amount for the innovation fund since IEDA could have carryover money from prior years.
Another IEDA fund, the Grow Iowa Values Fund, would also lose about $12 million, under the budget bill. Hoffman said money in that fund is not used to support entrepreneurs.
The legislation also moves about $6.1 million in Iowa’s cultural trust fund, used for the arts, to the general fund, the Register reported.
The Iowa House passed the bill Monday.
This story was originally published Monday, Jan. 30 and updated Wednesday, Feb. 1.
Matthew Patane is the managing editor and co-founder of Clay & Milk. Send him an email at email@example.com.