Growth in 2004 expenditures likely an exception, not trend

Updated 10:00 AM February 28, 2005

Growth in 2004 expenditures likely an exception, not trend

By Laurel Thomas Gnagey

A slowdown in research expenditures for 2004—though still slightly up over the previous year—most likely is an anomaly rather than the start of a trend, Vice President for Research Fawwaz Ulaby told the Board of Regents Feb. 17. Following five consecutive years of double-digit growth, and nearly 10 years of steady gains, this year's expenditures rose 0.4 percent, bringing the total to $753 million—up $4 million from the previous year.

As evidence that the slowdown most likely is an exception, Ulaby cited year-to-date research expenditures for 2005 that show the University is ahead by about 5.9 percent at the half-year mark.

"Our projection of expenditures for the whole of FY2005, based on performance through the first six months of the fiscal year, suggests that total research expenditures likely will surpass $800 million for a gain of about 7 percent overall," Ulaby told regents.

Ulaby said the 2004 slowdown reflects a combination of factors, including:

• Slower growth in federal appropriations for basic and applied research that has affected all universities;

• A sharp decline in research support from industry, which affected the Medical School, in particular;

• Completion of several large social-science surveys funded by the National Institutes of Health (NIH) and the Centers for Disease Control (CDC);

• A reduced growth rate of internal funding in support of research due to cutbacks in the University's state appropriation.

In the Medical School, which accounts for two-thirds of the research spending, the growth in funding was slower last year, increasing 3.9 percent compared with the average change of 11.7 percent from '02-04. The College of Engineering expenditures declined 1.7 percent.

The Survey Research Center experienced a significant "bubble" in expenditures during the FY2001 to FY2004 period. This growth was due to several major projects funded by the federal government that collected large quantities of data and, consequently, were very expensive to conduct, Ulaby said. The data collection phase of these projects has ended, and now the Institute for Social Research and others across the country will begin work studying these datasets—valuable research activity but not nearly as costly as the original data collection, Ulaby said.

"Fortunately, this decline in Survey Research Center spending had minimal impact on the institute's ability to conduct research in the traditional, academic sense," he said.

Further evidence that last year's performance is not the start of a trend, Ulaby said, is that projects funded by NIH, National Science Foundation (NSF) and the Department of Defense were supported at levels the same as or even double the growth in spending by those agencies.

Ulaby warned, however, that the Bush Administration's budget plan for FY 2006 could result in fewer dollars for U-M unless efforts to convince Congress to invest more heavily in research are fruitful. If the president's budget that calls for modest increases for NSF and the NIH, and a reduction in defense department research funding passes, U-M researchers will have to be even more competitive than they are to keep ahead of peer institutions, he said.

"U-M always has competed exceedingly well against other institutions, and will continue to do so in the future, so long as we continue to invest in our faculty and research infrastructure in a strategic and coordinated way," Ulaby said.

Growth in 2004 expenditures likely an exception, not trend

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