Washington Budget Would End Life Sciences Discovery Fund

Xconomy Seattle — 

Washington lawmakers have put the Life Sciences Discovery Fund on life support and unless Gov. Jay Inslee saves it again with his veto pen Tuesday afternoon, the plug will be pulled.

An 11th-hour operating budget passed by the state Legislature overnight delivers a significant blow to the state’s life sciences industry, particularly at the very earliest stages where researchers and entrepreneurs are trying to shepherd new treatments, devices, and diagnostics from laboratories to commercial enterprises.

The budget, which is coming together a day before the start of the new fiscal year, takes $11 million in the Life Sciences Discovery Fund (LSDF) treasury account and shunts it to the general fund. It blocks the LSDF from awarding new grants after July 1, shutting down the current grant program for which proposals are due next week. It provides no revenue—from state tobacco settlement dollars or otherwise—in 2016 or 2017.

“This budget creates considerable uncertainty for the future of LSDF,” writes executive director John DesRosier in a message to supporters Tuesday morning. “Depleting LSDF’s treasury account and defunding the organization in the next two years will make it extremely challenging for the program to survive.”

This looks to be about the worst of the possible outcomes for the LSDF we examined in May. If there is one silver lining, it’s that existing grants were not terminated immediately. The $38.2 billion, two-year budget, “leaves some funding to wind them down,” DesRosier says in an e-mail to Xconomy.

He and other life sciences leaders are imploring constituents to contact Inslee and plead for line-item vetoes of the $11 million transfer and prohibition on issuing new grants. Inslee saved the LSDF last year. This year, vetoes would only keep the 10-year-old program, established to provide public support for applied research and commercialization of new medical treatments, “functional in the near term,” DesRosier tells supporters.

The governor does not have authority to provide 2016-17 funding with a veto.

“Developing a long term solution for providing risk capital to enhance commercialization will be a challenge for all of us in the life sciences community if we are to keep this successful program running,” DesRosier writes.

The state’s life sciences industry is meeting today and Wednesday for its annual Life Science Innovation Northwest expo.

Inslee is expected to sign the budget Tuesday afternoon.