Idaho universities would lose millions with NIH reimbursement cap. These cuts are careless | Opinion
Another surprise announcement by the Trump administration to cut federal spending could mean a loss of millions of dollars to Idaho universities.
The National Institutes of Health announced last week that it would cap so-called indirect cost payments it makes to universities, hospitals and research institutes to help cover facilities and administrative costs.
NIH announced it would cap these facilities and administrative payments at 15%, replacing the negotiated indirect cost rates at many universities, which typically range between 25% and 70%.
The N.I.H. said that $9 billion of the $35 billion, or 26% of grant dollars it distributed last year, went to indirect costs.
Nationally, the financial toll of this change could be significant, potentially cutting billions of dollars from academic clinical research, according to the Holland and Knight health care blog. A cut to 15% translates to indirect costs payments of $5.25 billion, a cut of nearly $4 billion.
Idaho universities would lose millions
Under the new calculation, Idaho State University could lose about $394,000. Boise State University could lose $1 million. Its annual NIH reimbursement would be reduced from $1.6 million to $600,000. The University of Idaho would take a $1.41 million hit.
While the NIH cuts are being welcomed by some as necessary cost-cutting, there seems to be some misunderstanding about what these “indirect costs” are.
“People often see this as administrative bloat,” Martin Blair, vice president for research and economic development at Idaho State, told me in a phone interview. “It is a reimbursement for costs already incurred by universities to support the research infrastructure at the university. And people don’t necessarily understand that.”
These funds pay for such things as “the lab facilities, the microscopes, the instruments, the specialized heating and air conditioning that we have to do, when you think about the kinds of things we do in our medical clinics that do research, and the machinery, the stuff that goes into all that, that’s covered largely by indirect costs over these facilities administration fees.”
In other words, you can’t do the research without the microscopes or the lab. A university might win an NIH grant to do research on cancer cells, but the grant, itself, might not pay for the HVAC system needed to conduct that research in the lab. That’s where the indirect costs come in.
“Without these reimbursements, we have no other way to engage in research activity or to support the research activity,” Blair said. “These are expenses that universities have already made. It is our infrastructure; it’s our labs; it’s our buildings; it’s our people who run the research enterprise of the university. So these are expenses we’ve already incurred.”
NIH spending in Idaho small compared to others
Idaho is a relatively small player in NIH grants compared with other states.
While Idaho received $23.5 million in grants last year, by comparison, California received more than $5 billion. New York more than $3 billion. Oregon received $388 million. Utah $307 million. In fact, only Alaska and Wyoming received less in NIH grants last year than Idaho.
Still, Idaho’s NIH grants support 533 jobs and $101 million in economic activity, according to the organization United for Medical Research.
Idaho institutions receiving NIH funding include the University of Idaho, Boise State University, Idaho State University, Caring Technologies Inc., Idaho Hospital Association, Idaho Veterans Research & Education Foundation and Lewis-Clark State College.
The University of Idaho has 29 active NIH projects. If these projects were all changed to 15% for indirect costs, it would be a $1.41 million hit, according to Jodi Walker, executive director of communications at U of I.
Of the University of Idaho’s total of $14 million in grants awarded last year, $11.4 million went to “direct costs,” while $3.3 million, or 23%, went toward indirect costs.
Some of the University of Idaho’s projects funded by NIH have such names as “Biogenic amines, malaria and manipulation of mosquito physiology and behavior” and “Patterning genes in retinal development.”
Of the nine NIH projects funded at Boise State last year, all but one exceeded 15% in indirect costs, for an average of 26% in indirect costs total.
Direct costs typically pay for the researchers’ salaries, supplies and some lab equipment, and the indirect costs go toward paying for lab space, administrative support, utilities and safety regulation oversight, Stephany Galbreaith, director of media relations at Boise State, said in a phone interview.
Boise State’s projects have such names as “Quantifying the effect of biomechanical SUID risk factors on infant respiration,” “The Role of Mechanical Stress in Mitigating Side Effects of Chemotherapy,” “Interaction of alpha-crystallin with cholesterol bilayer domains in cataract formation” and “Role of LINC-mediated Mechanosignaling in MSC Aging.”
Idaho Hospital Association’s grant
The Idaho Hospital Association’s grant would be unaffected by Trump’s order.
That NIH funding of $645,936 goes to the association’s contract to manage the Cancer Data Registry of Idaho for the National Cancer Institute Surveillance Epidemiology and End Results Program.
“(The Cancer Data Registry of Idaho) is one of the most cost-effective registries in the country and is well below the threshold of what is allowed,” Toni Lawson, Idaho Hospital Association vice president for government relations, wrote to me in an email.
In fact, there are no indirect costs associated with that grant, according to the NIH database.
Lawsuit grants reprieve
Everyone, including Idaho, has a reprieve — for now.
A federal judge this week issued a nationwide order preventing the indirect costs cap, according to the Florida Phoenix.
Judge Angel Kelley of the U.S. District Court of Massachusetts issued a temporary restraining order Monday, the same day she issued a similar order in a separate case that applied to 22 states that had sued the administration. Idaho was not one of the states to join that suit but is benefiting from one of two national suits against the cuts.
Kelley has scheduled hearings for Feb. 21.
Cutting costs without care
Now, before all you Trump supporters jump all over me for daring to criticize anything done by the Dear Leader and his sidekick at the Department of Government Efficiency, I get it. We have got to get our federal budget under control. For every $4 the government spends, it takes in $3 in revenue. It’s unsustainable. Our national debt is now at $34 trillion, a mind-numbing number.
Congress has done a miserable job of managing the budget.
But here are a couple of things to consider.
Just like the cuts to the U.S. Agency for International Development that I wrote about last week, the NIH cuts came out of nowhere, blindsiding the thousands of people working there and the millions of people affected by the cuts.
And, just like USAID, the NIH money was already approved by Congress, and Trump’s dismantling of these programs is an overreach of executive power. In the case of NIH indirect costs, those reimbursement payments were already negotiated, so going back on the already agreed-upon amounts is going back on a promise.
And, just like USAID, NIH’s budget represents but a small percentage of the federal budget, so even making these cuts would have a negligible impact on the federal budget deficit.
The bottom line here is that the net effect will be a reduction in money flowing to the universities, hospitals and research institutes.
Some say that’s the idea, that Project 2025’s goal all along was to defund the big, bad, woke, leftist universities. And the Project 2025 authors still harbor deep-seated anger at NIH for perceived transgressions during the COVID-19 pandemic, and this is retribution.
Whatever the motivation behind them, these cuts are being made willy-nilly, like the USAID cuts, without regard for efficacy or necessity. The NIH blanket cap at 15% is arbitrary, an imaginary line, without regard for whether a 26% indirect cost is needed or a 60% indirect cost.
The end result will simply mean less funding and less research.
“This is a surefire way to cripple lifesaving research and innovation,” said a statement from the Council on Governmental Relations, according to Science magazine. “America’s competitors will relish this self-inflicted wound. We urge NIH to rescind this dangerous policy before its harms are felt by Americans.”
This story was originally published February 13, 2025 at 4:00 AM.
