A new investment program will offer technology start-ups $220 million in state funds, money which the state treasurer says isn’t held up by the budget stalemate.
The Illinois Growth and Innovation Fund will use money already controlled by the office of Illinois Treasurer Mike Frerichs, not by diverting any tax dollars that are supposed to go into the general revenue fund of the state.
Frerichs said he’s been asked how the state can afford to roll out the program with no budget in place.
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“I think the real answer is how can we not afford to make these investments,” Frerichs said. “This is money that can’t be spent in the general revenue fund. I’m the state’s chief investment officer. That means while we have money sitting around, it’s my job to get a good return for it.”
Frerichs said investing in the right companies may help the state’s financial situation.
“More money comes in, and every dollar we’re able to raise is a dollar the General Assembly doesn’t need to raise in taxes or a dollar they don’t need to make in painful cuts to important services,” Frerichs said.
Frerichs said the $220 million will be distributed over the next three years, promising to spread out the investments in up to 20 funds, and placing no more than 15 percent of that $220 million within the same fund.
The program has the support of Illinois Venture Capital Association executive director Maura O’Hara, who said Illinois doesn’t go as far in investing public money into the private sector as other states.
“Most of our neighboring states have programs that invest pension fund dollars or general dollars from their funding budgets to invest in venture capital and private equity. Illinois is unique in that we only do it through the treasurer’s office on a public basis,” O’Hara said.
A similar program called Technology Development Accounts was authorized in 2002. Frerichs said this new investment will create an estimated 3,600 jobs, though the scope of the program is limited to providing money to technology and bioscience businesses.