Report: Federal funding cuts could cost Mass. $16 billion

Proposed federal cuts to research and development would cause the state to lose thousands of jobs and millions in revenue, according to a new report released Thursday by the University of Massachusetts Donahue Institute.

Federal funding for research and development supports 81,300 jobs and more than $16 billion in total economic activity in Massachusetts, the report found. This funding goes to hospitals, colleges, pharmaceutical firms, research facilities and private and nonprofit organizations.

Every $1 of research funding generates nearly double the amount of economic activity, according to the report.

That funding creates jobs and generates revenue in several industries, said Rod Motamedi,  who led the research and is an assistant director at the UMass Donahue Institute.

" It's not just [academia] and the research labs that are seeing benefits from this," Motamedi said. "It's restaurants. It's construction. It's real estate. It's transportation. It's warehousing. It's all of those things that benefit."

All of that would be impacted by President Trump's proposed cuts to the National Institutes of Health (NIH) and National Science Foundation (NSF). The state is one of the top three recipients in the country for funding from both of these agencies — and is typically the top recipient per capita.

Massachusetts also receives more than $2.3 billion in federal research and development funding from the Air Force, according to the report, an amount second only to the NIH. The Trump administration's proposed cuts to the U.S. Department of Defense would also impact organizations that receive this Air Force funding.

Here are more key findings from the report:

Over 3,000 research and development jobs could be lost in Mass.

One of every 10 research and development jobs in the country is in Massachusetts, according to the report. The report estimated the state would lose 3,300 of those jobs due to federal funding cuts.

Motamedi said such losses are critical because research and development has been foundational to key parts of the state's economy, like the life sciences. 

"The big life sciences companies of today that are driving so much the economic growth at one point were research ideas in a lab that almost undoubtedly were supported to some measure by federal [research and development] awards," Motamedi said.

The cuts would lead to job losses in other industries

It's not just workers in lab coats that would be impacted by the proposed federal cuts.

Federal research and development funding also supports jobs in other industries that provide services for research organizations. That includes 34,600 jobs in construction, retail, dining, healthcare and administrative services.

" A lot of the economic growth that we've seen in eastern Mass. over the past couple of decades and how that's impacted everyone's lives ... all of that has been built around a growing knowledge economy, and all of that has been built upon to some extent, federal [research and development] money."

The state would lose millions in tax revenue

Massachusetts stands to lose $19.7 million in tax revenue due to the proposed federal cuts, the report found. This would impact services on the state and local level, Motamedi noted.

The state could try to replace some of the lost federal funding and increase support for the impacted industries, "but at some level, the states don't have the same amount of resources" as the federal government "to backfill all of this," Motamedi said.

Still, those attempts are underway. Gov. Maura Healey announced Thursday that she's filing a $400 million bill to support research, protect innovation, and retain and create jobs.