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Brunell: Lawmakers should fund life sciences discovery

By Don Brunell
Published: June 23, 2015, 12:00am

Some may remember the infamous Seattle billboard: “Will the last person leaving Seattle turn out the lights?”

The billboard appeared in April 1971 after Boeing shed 60,000 jobs at its Puget Sound plants. The collapse spurred the state to diversify its economy. Seattle, in particular, has become one of the world’s hubs for software, health care and life sciences research.

One of the key ways to stimulate innovative life sciences research is the Life Sciences Discovery Fund.

Established in May 2005 to help attract life sciences research to Washington, LSDF got its seed money from a portion of Washington’s share of the $206 billion tobacco manufacturers’ settlement with the states. Washington was awarded about $4 billion, to be received in payments over time. That LSDF money then attracted $510 million in private contributions from corporations and foundations such as Bill and Melinda Gates’.

So where’s the glitch? It is caught up in state budget negotiations in Olympia. LSDF funding is included in the House budget, but is missing from the Senate version even though Gov. Jay Inslee supports its inclusion.

LSDF funding isn’t a budget buster, amounting to just $19 million in a nearly $40 billion spending plan. That’s a fraction of 1 percent of the budget. It’s not that we’re short of money; state revenues grew by $425 million in the last quarter.

Remember, LSDF funding is money that was put aside from the tobacco settlement.

Another major problem is it is small and easily overlooked. Lobbyists are not pounding on doors at the state Capitol to restore it.

But for diabetics like myself and people suffering from Parkinson’s disease and Alzheimer’s, funding for promising startups must continue researching new treatments and medicines.

A company like M3 Biotechnology Inc. may not have located in Washington if not for LSDF. It is an innovative young therapeutics company with potentially game-changing drugs designed to treat diseases like Parkinson’s, Alzheimer’s, multiple sclerosis and ALS. LSDF provides a financial bridge from the challenging period at a company’s birth to a time when those companies are more attractive to investors.

Supporters identified 40 companies in the last decade that have benefited from LSDF grants and point out that it has generated more than $1 billion in statewide business activity. They calculate the fund has a seven-to-one return on the state’s investment and created 3,500 jobs and $67 million in health care savings.

Some may argue that our state shouldn’t underwrite life sciences research, that we should let funding come from foundations and corporations. But Washington has provided incentives before — and they work.

After the 1970-71 Boeing layoffs, Republican Gov. Dan Evans and the Legislature passed legislation allowing a sales tax deferral for manufacturers who modernized their plants and hired or retrained workers.

When Washington started competing head-to-head with Oregon for semiconductor manufacturers, then-Sen. Al Bauer, D-Vancouver, worried that,without a sales tax exemption for new manufacturing machinery and equipment, Washington would lose those plants to Portland. They passed legislation in 1995.

In 1996, the first year of the exemption, an Association of Washington Business survey found that 141 small manufacturers purchased more than $250 million in new machinery and equipment and SEH America built a $4.5 billion plant expansion in Vancouver instead of Portland.

Today, with the strong worldwide competition for life sciences research, Gov. Inslee and lawmakers should restore LSDF funds because a tiny shot in the arm could make a world of difference.


Don Brunell, retired as president of the Association of Washington Business, is a business analyst, writer, and columnist.

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