July 21, 2016 Budget Update

With convention season in full swing, Congress recessed late last week until Labor Day. Over the last month, further progress was made on the appropriations bills that fund the government. Both the House and Senate have advanced all thirteen (13) FY2017 funding bills through the Appropriations Committees. Below are some highlights from the bills. 

Labor-HHS-Education Bill

Since our last writing, the most noteworthy development was release of both the House and Senate draft Labor-HHS-Education Appropriations bills, which fund the NIH and other education programs of vital importance to the university  community. Below are a few highlights of these bills:

NIH Funding

Overall, the House bill would provide $161.6 billion in discretionary spending, about $257 million below the Senate draft bill. With respect to almost every NIH institute or program, the Senate bill would provide some 1%-5% more funding than the House bill. Overall, the House would provide $33.3 billion total for the NIH, an increase of $1.25 billion (3.9 percent) above FY16, but almost $800 million below the proposed Senate funding of $34.08 billion (a $2 billion or 6.3 percent increase).  

Much of the funding increase in the Senate bill would go to signature initiatives. The National Cancer Institute would receive a $225 million increase under the Senate bill, a partial downpayment on the President’s proposed Cancer Moonshot. Both bills would provide a $100 million increase for the Precision Medicine Initiative, bringing that program to $300 million. The Senate would provide an additional $400 million (in contrast to the House’s $350 million) for Alzheimer’s disease research for a total of $1.26 billion in FY 2017. The Senate would provide $250 million BRAIN Initiative, a $45 million increase for that activity, while the House would provide $195 million. The Senate bill would also provide a $50 million increase for the Combat Antibiotic Resistant Bacteria program, for a total of $463 million.  

Other Health Programs

The Senate would provide a $126 million, or 93 percent increase, for the CDC and related agencies to combat opioid abuse. The House bill would provide a $500 million increase for comprehensive opioid response grants as well as grants through HRSA for schools to develop educational material and training related to substance abuse.

Department of Education

Both House and Senate bills would raise the maximum Pell grant for 2017-2018 to $5,935. The Senate bill also included language reinstating year-round Pell Grants, which would allow students to get a 2nd grant in the summer/same calendar year (The House bill does not include this provision). SEOG and Work study programs were level funded at their FY16 levels of $733 million and $989.7 million respectively in both bills.  

Future Outlook

When Congress returns after Labor Day, it will have very few legislative days in September before it recesses again until after the election. Already debate has begun about the need for a Continuing Resolution (CR) to keep the government operating when the new fiscal year begins on October 1st. Some in Congress want a six-month CR, which would delay final appropriations for FY17 until after a new president is sworn-in. This would surely hamstring agency decision-making and negatively impact research awards. Hopefully, Congress can agree on a shorter CR and return after the election for a “lame duck session” to enact a final Omnibus Appropriations bill or year-long CR, but time will tell.

State Issues

As of this writing, the state legislature is preparing for a whirlwind ten days and will finalize its two-year session at midnight on July 31st.

Below are a few issues we helped lead the charge in supporting on behalf of the university community:

College Savings Tax Deduction:  As part of the Economic Development bill - Starting in 2017, individuals and families will be eligible for up to $2,000 in annual tax deductions for contributions to 529 college savings plans.  After conceiving this idea a few years ago and organizing a coalition to advocate for its passage, we succeeded in getting this provision included in both the House and Senate version of pending economic development legislation.  The final bill is likely to reach the Governor’s desk late next week.

State Financial Aid:  The final FY17 state budget includes $95.6 million for need-based state scholarships, level funding from last year.  The budget also included a commission to study whether Massachusetts should join the State Authorization Reciprocity Agreement.  

Science and Technology Matching Fund Grants:  The pending economic development bill also includes $15 million in additional funding for this program, which is designed to support initiatives with the best potential to create jobs and new industries in Massachusetts while leveraging federal funding.  Northeastern has already benefitted from this program, with Prof. Ahmed Busnaina’s Center for High-rate Nanomanufacturing receiving a $3 million grant from Governor Charlie Baker at KRI earlier this year.  

“Proof of Concept” Commercialization Seed Fund: We are currently working to restore $200K vetoed from the final FY17 budget for this fund, which provides grants to transition new technologies coming out of universities.  Last year, three NU faculty members received grants from this program.