Cost of Stimulus Cash Vexes Universities Published July 06, 2010 | The Wall Street Journal
Print Email Share Comments (34) Text Size The $18.2 billion marked out in last year's federal stimulus package for research and development was hailed as a boon for universities, but many that received funds are finding their share of the costs burdensome.
The conundrum is apparent at the university of California. Since early 2009, the UC, which has the biggest research budget of any university system, has won $690 million in stimulus grants for research through the National Institutes of Health, Department of Energy and other agencies. The money has funded more than 1,600 projects in areas such as cancer and climate change, creating hundreds of jobs and continuing a decade-long trend of rising research funding from federal agencies and private foundations.
But the stimulus grants have also required the UC to spend about $69 million that wasn't reimbursed by federal agencies to support the new research projects. That helped push the UC's total unreimbursed research-related costs to an estimated $800 million in the fiscal year ended June 30, up around 11%from $720 million a year earlier, university officials said. This came as the public university system grappled with a $1 billion budget shortfall amid reductions in state funding.
"This [stimulus funding for research] is not money that in any way makes up for the loss of state funds. It actually makes our financial problems worse," said Steve Beckwith, UC's vice president for research and graduate studies. In fact, the UC has discussed turning down some of the funds, he said.
The universities were aware of the indirect costs of research—for administrative staff, laboratories and other infrastructure—that they would have to bear when they applied for the stimulus funds. Still, amid diminished state funding and endowments, many universities are seeking a greater level of reimbursement from federal agencies in the future.
Liz Oxhorn, a White House spokeswoman, said it was up to universities to decide whether to compete for the stimulus grants. Like other federal grants for research, the stimulus ones cover some but not all of the indirect costs they generate. "Each university has an opportunity to weigh the costs and benefits of the project before" applying for stimulus money, she said.
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