Federal appeals court blocks plan that would cut $120 million in federal research funding in WA
A three-judge federal panel has again blocked a Trump administration directive to cut research funding for public universities and research centers nationwide, a plan both the University of Washington and Washington State University have said would deeply impact their programs and likely result in layoffs.
The decision upholds a lower court ruling that blocked the National Institute of Health from capping the reimbursement rate it provides for indirect costs at research institutions at 15%, which is far below the negotiated rate institutions previously agreed to.
In the ruling, U.S. Circuit Judge Kermit Lipez wrote that the attempt “to impose a 15% indirect cost reimbursement rate violates the congressionally enacted appropriations rider and HHS’s duly adopted regulations.”
It’s not known whether the National Institutes of Health will appeal the decision.
In February, Washington Attorney General Nick Brown joined 21 other states in a lawsuit challenging the plan. According to the lawsuit, the cap would have cut $120 million in funding in Washington.
“This funding is key to fueling the breakthroughs that have made Washington a powerhouse in medical research, work that saves lives,” Brown said in a statement Tuesday. “That’s why we’ve fought so hard to protect these funds, which are used to help unlock the mysteries of some of our biggest health challenges, like Alzheimer’s disease, pediatric cancer, and diabetes.”
As it announced the plan in February, officials with the NIH said more than a quarter of the agency’s funds provided through almost 50,000 competitive grants in fiscal year 2023 paid for indirect costs, including for facilities and administration not directly tied to a specific project. According to the agency, of the $35 billion it provided through grants, $26 billion went to direct costs for research, while $9 billion went to indirect costs.
According to the lawsuit, Washington State University negotiated an indirect cost rate of 53% for on-campus research and 26% for off-campus. The new 15% rate, the lawsuit states, would have instantly cut over $5 million from WSU in 2025, “sending shockwaves throughout WSU, and significantly disrupting the substantial progress.”
Were the rate to take effect, the lawsuit states researchers “would likely be forced to significantly reduce or eliminate research animal colonies” at the Washington Animal Disease Diagnostic Laboratory. School officials also warned of hiring and travel freezes if the cap were to go into effect.
The university likely would have also closed some research facilities and reduced some research at the Elson S. Floyd School of Medicine.
According to the lawsuit, a 15% rate at the University of Washington “would instantly deprive UW of hundreds of millions of dollars it currently puts toward conducting the vital research and medical care contemplated by the NIH grant awards.”
The lawsuit states that the university has “long relied” on the ability to negotiate reimbursement rates, and that “nothing could have prepared” the university for funding cuts. According to the lawsuit, the change would result in a loss of between $90 million and $110 million to UW Medicine.
“The impacts would be devastating not only to the many staff members and faculty who would likely lose their livelihoods, but could also prove deadly,” the lawsuit states.