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K-State Today

April 10, 2017

The impact of the federal budget and budget policies on higher education

Submitted by Sue Peterson and Peter Dorhout

Budget Update

The federal budget is in a period of uncertainty. We know many K-Staters are concerned about the White House 2018 budget blueprint and that national organizations and professional societies are urging many of you to make your voices heard on a number of issues. The full President's Budget will be released the second week in May.

The continuing resolution for the 2017 budget expires on April 28, and we are without a clear path at this time.

We share your apprehensions and want you to know that the Office of Governmental Relations and the Office of the Vice President for Research are watching closely. The federal budget development process is long, and the 2018 budget remains far from final.

Budget Policies

We are tracking proposals that would reduce the budgets of federal funding agencies and the impact such actions would have on direct funding. We are also paying especially close attention to proposals that would eliminate or reduce indirect cost reimbursements from the National Institutes of Health and possibly other federal funding agencies. In the current system, federal research grants comprise two parts:

  1. Direct costs, such as salary support for researchers, graduate student stipends, equipment, laboratory supplies, and travel.
  2. Indirect costs — also known as facilities and administrative costs — including infrastructure and operational costs such as construction and maintenance of labs; utilities, telecommunications, internet, data storage; safety and security; libraries; and personnel and other costs associated with compliance with federal, state, and local regulations.

Universities pay indirect costs, then the government reimburses a portion of these expenses based on a rate that the government negotiates with each institution. The rate varies from university to university because of differences in geographic location, condition of research facilities, and other factors. With a few exceptions, K-State's negotiated rate, as of July 1, 2016, is 52 percent. (Read a K-State Today announcement about updated rates from earlier this year.) The Association for Public and Land-Grant Universities developed a brief handout and a list of frequently asked questions that are good sources of more information about indirect costs, and both APLU and the Association of American Universities are developing plans to address the issue more broadly.

Losing federal indirect cost support would have obvious and drastic negative effects on K-State's ability to sustain our mission as a land-grant university. Universities around the country would be hard-pressed to continue providing the improvements in human and animal health, transformative technologies, and research workforce that power innovation and enhance our country's prosperity and security.

As we react to this proposal and others related to the federal budget, we ask that you notify the Office of Governmental Relations whenever you are asked to sign letters or engage in communications with members of the federal delegation. Please send your questions and contacts to kstategr@k-state.edu so our staff can ensure that we abide by federal lobbying guidelines and so we can track relevant communications. We will provide updates on the governmental relations website and in RSCAD Momentum in the coming weeks, and we will communicate with our federal delegation if necessary as the budget makes it way through Congress.