Officials estimate $45 million loss for UI if fiscal cliff deal isn't reached

Officials estimate $45 million loss for UI if fiscal cliff deal isn't reached

URBANA — Scientists in the seven laboratories at the Institute for Genomic Biology are studying the essence of life.

From gene function to the classification of life forms to climate change, more than 140 professors from across campus collaborate on federally funded research worth more than $20 million.

Consider what would happen if a tenth of that money, $2 million, suddenly disappeared. It would mean, professors say, less money to support the graduate students and research scientists who do much of the lab work. A year or more lopped off multi-year projects. Perhaps some research questions left unanswered. Real jobs lost.

Now multiply that by a factor of 20, and it's clear why UI officials are keeping a wary eye on federal budget negotiations in Washington.

The impending "fiscal cliff" on Jan. 2 would force substantial cuts to government programs that support more than $140 billion of research nationwide each year. Unless Congress reaches a budget agreement, automatic spending cuts known as "sequestration" will slash research budgets by 8.2 percent across the board, according to an analysis from the federal Office of Management and Budget.

And UI Chancellor Phyllis Wise said a National Science Foundation official indicated recently that the agency is preparing for cuts of up to 10 percent.

Even 8.2 percent would be a significant hit for the UI's Urbana campus, whose federal grants and contracts totaled more than $400 million in fiscal 2012. And Urbana is the largest recipient of NSF awards, with $195 million. The Chicago campus, with its heavy emphasis on health sciences, spent more than $300 million in federal funding in fiscal 2012.

Some of the federal money goes toward Pell financial aid grants (which are protected from the "cliff") and other activities, but the bulk is for research.

Universitywide, an 8.2 percent cut would mean a loss of at least $45 million in research dollars, according to Lawrence Schook, UI vice president for research. He said 75 percent of that goes toward salaries for hundreds of research scientists and academic professionals earning, on average, $50,000 to $75,000 a year.

"If you look at Urbana, this is 200 to 300 real jobs," he said. "These are high-quality, highly educated people."

'Everybody is being cut'

Although no one is saying yet how the cuts would be implemented, UI officials fear they would affect not just future grants but those already awarded.

And that worries Gene Robinson, director of the Institute for Genomic Biology and a professor of integrative biology and entomology.

"Research is all about momentum. One discovery builds on the previous one, and leads to the next. If there were serious diminishment of funding, even a temporary one, that could have real negative effects on productivity," Robinson said.

Federal grants make up more than half of the institute's research income, primarily from the National Science Foundation, National Institutes of Health and Department of Energy, he said. Most span several years and include multiple researchers. The remainder comes from private industry or foundations.

Wise said that in tight budget years, funding agencies typically reduce the number of new projects being funded — awarding grants to the top 10 percent, for example, rather than 15 percent. But it's not practical for NIH, NSF and other agencies to absorb an 8 to 10 percent budget cut without dipping into current grants.

"You'd have to cut future grants by 50 percent. That would be really devastating to young investigators," she said.

Cuts in ongoing grants are not unprecedented. Most grants are awarded for three to five years, but they're subject to annual reviews to ensure the money is being spent as promised, Wise said. When funding agencies run into budget problems, they sometimes lop off a year, or several, from multiyear grants, said Wise, a physiologist specializing in women's health and gender-based biology, who once lost part of an NIH grant during another federal budget downturn.

"I'll bet you it's happened to every investigator in the last 20 or 30 years," she said.

Likewise, in the 1990s, Robinson was forced to drop one objective from a federal research grant that was cut by more than 5 percent, but he added it to a later grant proposal. He said researchers try to trim components that won't affect the essence of the research and protect the people doing the work — especially graduate students, "whose whole training program depends on having the resources and the support to be able to get their degrees."

Researchers may withhold raises unless required by the university, cut out travel to scientific meetings, or avoid hiring another postdoctoral researcher, Wise said.

"These are painful cuts. Grant budgets are very strictly worked out. There's no fluff in these budgets when they're finally awarded," Robinson said.

Schook said researchers can sometimes draw on other grants if one project is affected by budget cuts. The difference now is that "everybody is being cut at the same time. Your opportunity for making decisions is really compromised," he said. "And it's not a one-time thing. This will happen forever until we figure out what to do."

Sequestration requires cuts in federal spending on research and development of $12 billion this year and nearly $95 billion over the life of the sequester, according to, a website launched last week by three groups representing American's research universities. The Association of American Universities, the Association of Public and Land-grant Universities, and The Science Coalition wanted to show how the budget sequester would affect university research in every state. Illinois would lose almost $109 million by their calculations.

AAU spokesman Barry Toiv said there's some talk of a "partial sequester," but no one really knows what the outcome will be.

Jobs and innovation

The uncertainty is weighing on Jose Solbiati, a research scientist in microbiology, and Salehe Ghasempur, a fifth-year biochemistry graduate student, who fear their jobs could be affected. Both work on the Enzyme Function Initiative, a large, multi-university research project to devise a method for identifying the functions of genes and proteins discovered in genome-mapping projects. They are working with bacteria, which have relatively simple structures, but the methods will eventually be applied to the human genome.

"When a genome is sequenced, you might know what half of the genes do," explained biochemistry Professor John Gerlt, principal investigator on the project. "If you want to understand the biology of the organism, you'd like to know what all of the genes are there for, the functions of all the proteins."

Funded by NIH, the five-year, $34 million Enzyme Function Initiative is in its third year and includes 14 scientists from the UI and eight other universities. It generates about $800,000 a year of direct research for the Urbana campus, Gerlt said.

Gerlt said even his program director at NIH is unsure what will happen to the grant under budget sequestration.

"Everybody is hoping and praying that it's averted," he said. "If there is a cut, it will impact a lot of people."

Solbiati and Ghasempur also worry about the impact on science and, eventually, health care.

"Doing science takes money," Ghasempur said. "It's an investment for future understanding."

Lean years ahead

Even if sequestration is avoided, the picture for federal research funding remains bleak, researchers said.

In real dollars, federal funding for research is at its lowest level in the past decade, and caps in the Budget Control Act of 2011 will likely further depress research spending over the next decade, apart from the sequestration, the higher education groups said last week.

The spending caps provide for little or no increases in research funding, which means "in real dollars it'll decline," Toiv said. That will make it "very tough to maintain funding for research even at the current levels, let alone provide for the increased investment that we and many others think should take place."

The UI Chicago would also feel the impact of 2 percent sequestration cuts in Medicaid and Medicare, as those government insurance programs cover most of its patients and also provide money to support medical residents and interns.

"The ripple effect is significant," Schook said.

The three higher education groups urged congressional leaders and President Barack Obama to move quickly to develop a "comprehensive, balanced solution to America's fiscal crisis that avoids steep cuts to scientific research," which represents only 2 percent of the total budget but pays "huge dividends" in terms of economic growth.

Robinson points to the Human Genome Project, which spent almost $4 billion of taxpayer money between 1988 and 2003 to map human genes. That investment spurred almost $800 billion in economy activity according to a study by the nonpartisan Patel Memorial Institute, he said.

"An $800 billion payoff over 15 years — that's the kind of impact visionary research can have on our economy," Robinson said. "Research leads to discovery; discovery leads to jobs; jobs lead to new industries and a better economy."

Schook and UI President Robert Easter attended a recent forum on the topic in Washington convened by the Council on Competitiveness, a bipartisan group of university and industry representatives.

"There was a real sense that this cannot happen," Schook said. "At a time when we're saying our future is in our innovation and R&D, how do you cut that? If our competitiveness is based on scientific discovery, how can you allow that to happen?"

Federal grants and contracts expenditures, FY 2000-2012, at UI

Researchers say federal research funding has been tougher to come by for the past few years as the fiscal crisis heightened. The UI has enjoyed a substantial increase in recent years because of a few large grants and hard work by faculty overall to secure funding, administrators say. Universitywide, federal grants and contracts grew by 73 percent in constant dollars from fiscal 2002 to 2012 (including a sizable increase in financial aid). At the Urbana campus, federal funding has risen by $200 million since fiscal 2000, with some dips along the way. Here's a look at the numbers:

Campus  2000 2005 2006 2007 2008 2009 2010 2011 2012
Urbana  $234.49 million  $342.18 million  $316.6 million  $309.46 million $321.8 million  $348.2 million  $368.3 million  $395.47 million  $432.6 million
Chicago  $140.13 million  $243.1 million  $250.6 million  $253.9 million   $246 million $247.9 million  $291.9 million  $318.8 million  $309.8 million
Springfield $307,000 $3.8 million  $3.8 million  $3.5 million  $4 million  $4.3 million  $6.3 million  $7.3 million  $7.6 million
Total  $374.9 million  $589.1 million  $571.8 million $566.9 million  $571.8 million  $600.5 million  $666.6 million  $721.6 million  $750 million

UIUC's '12 federal funding by source:

  •  Health and Human Services: $83.7 million.
  •  National Science Foundation: $135.3 million.
  •  Department of Agriculture: $34.2 million.
  •  Energy: $53.3 million.
  •  Defense: $48.9 million.
  •  Education: $12.3 million.
  •  Financial aid: $28.8 million.
  •  Other: $36.1 million.
  •  Total: $432.8 million.