Federal Sequestration and Research

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what will sequestration mean for NC?

The $85 billion in across-the-board budget cuts under the sequester for federal FY13 went into effect on March 1st. Sequestration will have a major effect on UNC-Chapel Hill and across North Carolina. Funding cuts will impact on research-related agencies, emergency management, and defense, among dozens of others. Federal research funding and student aid are the primary areas sequestration will affect at Carolina.

“University research is big business in North Carolina. UNC-Chapel Hill alone brings in $767 million annually in research funding—primarily from federal sources. If sequestration takes effect we stand to lose $28 million in federal fiscal year 2013. A cut of that magnitude could cost the state more than 400 jobs this year and slow the search for new technologies, life-saving medical treatments and promising cures.”

—Barbara Entwisle, Vice Chancellor for Research

Federal funds are essential to the groundbreaking research that takes place at UNC-Chapel Hill each year. In fiscal year 2012, $545 million of the $767 million Carolina received in research funding came from federal funds. Some of Carolina’s neediest students would also be affected by cuts from the sequestration. In 2013, dozens of students would lose the federal work study funds or Supplemental Education Opportunity grants that help make their college education.

In recent weeks, UNC-Chapel Hill joined research universities from around the nation in urging Congress and President Obama to avert the sequester. Joseph DeSimone, Director of the Kenan Institute of Private Enterprise and Chancellor’s Eminent Professor of Chemistry at UNC-Chapel Hill, is one of nearly two dozen professors and researchers who recorded a video testimonial asking Washington to avoid making these cuts.

“University research is big business in North Carolina, ” said Barbara Entwisle, Vice Chancellor of Research at UNC-Chapel Hill. “UNC-Chapel Hill alone brings in $767 million annually in research funding—primarily from federal sources. If sequestration takes effect we stand to lose $28 million in federal fiscal year 2013. A cut of that magnitude could cost the state more than 400 jobs this year and slow the search for new technologies, life-saving medical treatments and promising cures.”

Here’s just one good example: the cuts threaten UNC pharmacy researcher Jian Liu’s work on a safer blood thinner that could ultimately prevent the import of tainted drugs from China. You can learn more in this story from CNN Money.

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by the numbers

sequestration by the numbers

Sources:
1ScienceWorks for U.S.
2National Institutes of Health

FAQ

In what areas of the University will these cuts be felt?

Sequestration will affect the University primarily in two areas: federal research funding and federal student aid.

How much of Carolina’s budget will be affected by sequestration?

Of Carolina’s $767 million in research funding in fiscal year 2012, $545 million came from federal funds. Sequestration is expected to result in a 5.2 percent cut in federal research spending, which means that Carolina could lose $28 million in fiscal year 2013, and potentially more in coming years.

Carolina also stands to lose more than $175,000 in federal student aid that is currently used to support minority students and those in need of financial aid.

What will be the effects of decreased federal research funding?

The current situation creates a great deal of uncertainty for planning purposes for all the faculty investigators, labs, centers and institutes that bring research funding into the state. We do not yet know the particulars about where cuts will be felt, but the majority of federal funding to Carolina is for research, which generates jobs, innovation, and health care advances.

The National Institutes of Health has indicated that it will likely reduce funding levels of noncompeting continuation grants, make fewer competing awards and may not be able to reach the full fiscal year 2013 commitment level to grantees for continuation awards that have already been made. The NSF has indicated that it will cut back on new awards.

What will be the effects of decreased federal student aid?

In 2013, approximately 46 of Carolina’s neediest students will lose federal work study and 25 students will lose access to assistance from the Supplemental Education Opportunity grant, an award for students whose families are not able to contribute financially to their education. Cuts to the McNair Scholars Program and the Graduate Assistance in Areas of National Need (GAANN) grant will also take place, thereby limiting critical paths for minorities to succeed in graduate education.

Will these cuts affect jobs at Carolina?

The NIH estimates that 17.5 jobs are created from every $1 million in NIH funding. Of the $28 million the University is expected to lose, $20 million comes from the NIH. That could result in the loss of 350 jobs currently funded by the NIH. Potentially 100 more jobs could be lost due to cuts from other federal agencies.

UNC/NCSU professor Joseph DeSimone on sequestration

research dollars not a luxury

A message from UNC’s Holden Thorp, Duke’s Richard Brodhead, and NCSU’s Randy Woodson, excerpted from an op-ed published Wednesday, Dec 12, 2012, in the News & Observer.

The three of us share a concern that goes beyond our friendly rivalry. We’re concerned about the… [threats] to slash federal spending on science and research in ways that could be devastating for innovation and economic development in North Carolina.

Our concern reaches beyond our own campuses to our many neighbors across the state whose jobs depend, directly or indirectly, on North Carolina’s retaining a vibrant research enterprise.

“The federal research budget is a huge economic engine.”

As the News & Observer noted recently about the local economy, “the federal research budget is a huge economic engine.” At our three universities, federal research funds support important work — from new cancer treatments to emerging fields such as nanotechnology. The federal investment in research in our region climbs well into the billions of dollars when we add in local colleges and universities, RTI International and federal agencies with major local facilities, such as the Environmental Protection Agency and the National Institutes of Health.

Awarded by the federal government through a rigorous competitive process, research dollars sustain the basic and translational research typically carried out at universities.

The ideas and insights that are generated are often taken up by local private companies — from technology and pharmaceutical giants in Research Triangle Park to small startups.

These companies create many thousands of jobs as well as new computer apps, genomic therapies and green technologies.

This research ecosystem, which also includes the many local businesses that furnish laboratories with equipment and supplies, has been central to North Carolina’s economic emergence over the past half-century.

Previously, the state’s economy languished as traditional industries such as tobacco, textiles and furniture declined. In response, our three universities, together with forward-thinking government and business leaders, worked together to establish a new economy built on research, drawing on the substantial intellectual resources already in our state. Their bold vision proved successful beyond anyone’s dreams, laying the groundwork for major new software companies, energy technologies, life-saving therapies and more — and for countless jobs.

North Carolina has not been the only state to embrace scientific innovation. Nationally, more than half of the country’s economic growth since World War II can be traced to technological advances. The federal government’s steady investment in scientific research and innovation over the past several decades has given rise to everything from lasers to the Internet. These advances, in turn, have driven prosperity and transformed life from Silicon Valley to Boston, with our own region among the major beneficiaries.

Now, this engine of economic growth is threatened. Even without automatic cuts, federal research funding, adjusted for inflation, is at its lowest point in a decade. Legislators in Washington are looking for ways to cut spending further from the federal budget. If they cannot reach agreement, the nation faces draconian spending cuts… including to research in the Triangle…

“Research is not a luxury, or an expenditure we can do without. Rather, it is an investment. It’s spending today to produce prosperity tomorrow.”

As they ponder their options, they must recognize that research is not a luxury, or an expenditure we can do without. Rather, it is an investment. It’s spending today to produce prosperity tomorrow. It is also an investment to educate the young people who should become the next generation of scientists, entrepreneurs, business executives and leaders in other fields.

We must be strategic in how we prioritize federal spending, placing greater emphasis on programs such as research and education that provide great returns on investment and drive economic growth.

The Research Triangle Park, Centennial Campus in Raleigh, the American Tobacco Campus in Durham, and so many other places in our area exist because of previous federal investment in our region’s research enterprise. Maintaining this activity is essential not only for local universities like ours, whose budgets and programs would be devastated by some of the cutbacks now under discussion, but for the region as a whole.

In other words, the very future of our state depends on sustaining this federal research funding. We’re raising our voices together, because we’re all in this together.

Richard Brodhead is the president of Duke University. Holden Thorp is the chancellor of the University of North Carolina at Chapel Hill. Randy Woodson is the chancellor of N.C. State University.

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“Right now, researchers at the University of North Carolina are developing a synthetic version of the blood-thinner heparin that could eliminate the need to continue importing the drug… Unfortunately, this research project is at risk due to NIH funding cuts. If that happens, we may lose yet another extraordinary opportunity for economic growth rooted in NIH funding. There are many other stories like this at university laboratories across the country, which is why we must provide the resources necessary to achieve these biomedical discoveries here in the U.S.”

—from APLU President Peter McPherson’s testimony before the House Labor/HHS Appropriations Committee

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