Don Fry Commentary on WYPR:
In Maryland’s bioscience community, the line says it all.
What line? The annual line of entrepreneurs that forms to apply for a limited amount of state tax credits made available on July 1 to investors in Maryland biotech companies.
Last year, the line formed a day in advance for $6 million in available tax credits. This year, the line started five days early and a record number of applicants vied for another $6 million in credits.
The growing demand for these tax credits highlights two important points.
The presence of the bioscience industry in Maryland is becoming more and more evident. Despite the recession, bioscience industry growth in our state is beginning to percolate. That’s a good thing, but the bad news is that much of the demand for the tax credits is due to the fragile financial structure of these companies. These funds are needed to keep young and not so young companies afloat in these difficult economic times.
It is estimated that almost half of Maryland’s young bioscience companies have less than six months of revenue on hand and many could go out of business by the end of the year.
The tenuous financial posture of these companies and the five-day line for limited biotech tax credits underscores the need for Maryland to ramp up its support of critically-needed biotech investment capital for this key growth industry.
Governor O’Malley pledged to double the amount of tax credits available this year and to increase available tax credits to $24 million by 2013 as part of his 10-year bioscience growth plan but the recession got in his way. He sought and received General Assembly approval to offer the same amount of biotech tax credits. So far, this has survived the budget axe.
The governor has the right idea but must get his bioscience plan back on track. State lawmakers could help by overcoming their prevailing belief that bioscience tax credits are budget frills, rather than economic opportunities.
Recession or not, we need to find a way to nurture, rather than stifle, the biotech industry growth that is poised to blossom in our state.
For the Regional Business Report, this is Don Fry, President and CEO of the Greater Baltimore Committee, for 88.1 WYPR, your NPR news station.