President Donald Trump’s proposed federal budget includes cuts to two federal agencies that could make a noticeable dent in the Triangle economy if it wins congressional approval.
Trump wants to cut the Environmental Protection Agency’s budget by 31 percent and the National Institutes of Health by nearly $6 billion, or 19 percent. Both are major Triangle employers.
N.C. State University economist Michael Walden said those cuts wouldn’t derail the Triangle economy, but they “definitely would be noticeable.”
But he also noted that the president’s proposal is, in effect, just a first draft that has to go through Congress and is “definitely not necessarily the final result.”
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A spokesman for Sen. Thom Tillis said that the Republican senator “has concerns” with the White House’s budget, but didn’t offer any specifics.
“At the end of the day, it is a blueprint, a starting point in the budget process,” spokesman Daniel Keylin wrote in an e-mail. “Congress ultimately appropriates funds, and (the) final result is very likely to look different.”
The magnitude of reductions contemplated in the president’s budget can’t be accomplished without job cuts. Indeed, the budget proposal calls for eliminating 19 percent of EPA’s work force, or 3,200 employees, according to Reuters.
NIH has about 1,000 workers locally with the National Institute of Environmental Health Sciences, one of the 27 institutes and centers within NIH. EPA has significantly more than that at its RTP facility.
Geoff Gisler, senior attorney at the Southern Environmental Law Center, said that the EPA’s local work force could be especially vulnerable.
“One of the main targets of the budget is the Clean Power Plan and climate research, and a lot of that work has been done at RTP,” he said. The Clean Power Plan, which was initiated by the Obama administration, is designed to reduce carbon pollution from power plants.
Both agencies also dole out grants and contracts that ripple through the local economy.
In fiscal 2016, that included NIH awards of $416.9 million to Duke University and $412.4 million to the University of North Carolina at Chapel Hill, according to NIH’s website.
“I remain hopeful that members of Congress recognize the magnitude of this issue and will vehemently reject any reduction of NIH funding and funding for other programs critical to the health and well-being of people in our country and around the world,” Dr. Nancy C. Andrews, dean of the Duke University School of Medicine, said in a statement. “Everywhere you turn, there is clear evidence of the impact of science and biomedical research on human lives. Science and technology also have been major drivers of the US economy for decades. These proposed cuts are short-sighted and deeply troubling.”
A UNC spokeswoman said the university is still evaluating the potential impact of the proposed budget cuts.
The NIH can also be a major source of funding to the Triangle’s biotechnology companies.
Last year, for example, BioCryst Pharmaceuticals reported that its total funding from the National Institute of Allergy and Infectious Diseases – which is part of NIH – to develop a treatment for Ebola and other viral infections could go as high as $39.5 million.
Research institute RTI International, which has its headquarters in RTP, expects that its revenue from EPA and NIH contracts will amount to $80 million to $85 million this year, or roughly 9 percent of its total anticipated revenue, said CEO Wayne Holden.
Several hundred of RTI’s employees work either full-time or part-time on those contracts, Holden said. RTI has 2,200 employees locally and more than 5,000 worldwide.
If the proposed budget cuts did get the green light from Congress, work on some of RTI’s existing EPA and NIH contracts would continue until their expiration date. But other contracts would be “truncated and ended prematurely,” Holden said. “It’s a complex process.”
Holden said RTI has been working in recent years to diversify its revenue sources beyond federal funding, including doing more work for other countries. This year federal funding will account for about 80 percent of the institute’s revenue.
At the same time, Holden said that RTI plans to work with the North Carolina congressional delegation and others “to ensure that projects that protect national security and public health are fully understood and supported.” He noted that the state has a “vibrant research and economic development ecosystem that has been really important to what has happened in the state over the last 50 to 60 years.”
Gisler, of the Southern Environmental Law Center, also contended the EPA budget cuts would be “disastrous” for the state environmental-wise.
With the state government cutting its environmental programs and staffing in recent years, he said, the EPA has provided a vital “backstop.”
“We have relied on EPA to do some of that basic science, like the science that was necessary to detect and uncover the drinking water pollution down at Camp Lejeune,” he said.
Walden, the economist, noted that IMPLAN, an economic data company in Huntersville, calculates that “scientific research and development” activities in the Triangle – funded by either the government or corporations – accounts for 22,750 jobs. That’s about 2.3 percent of the total jobs in the region.
“This gives some sense of the relative importance of the sector locally that could be affected by federal budget changes for EPA and NIH,” Walden said.