University leaders outline FY2026 budget framework and warn NIH indirect‑cost cuts could be catastrophic to research

University administrators presented the FY2026 operating budget framework to the Finance & Operations Committee and cautioned trustees about a separate federal policy development that could sharply reduce research overhead from National Institutes of Health awards and threaten the university’s research enterprise.

Executive Vice President Goldman opened the budget discussion by describing the framework process and handing the detailed presentation to the university’s budget lead. The administration’s biennial state appropriation request is $235,000,000; in an illustrative distribution the administration said roughly $110,000,000 of additional state support could be available for FY2026 to address core costs and programmatic enhancements. The presentation noted that a 1% across‑the‑board tuition increase is estimated to generate roughly $10,000,000 under stable enrollment assumptions.

Vice President and Budget Director (presenter) explained drivers of cost pressure — compensation, facilities and technology inflation, and debt‑service increases — and walked trustees through hypothetical frameworks that trade off salary increases, programmatic investment and internal reallocations. The presentation said internal reallocations have historically run in the 1–2% range and that a 1% reallocation on the traditional state and tuition base reduces costs by about $22,000,000, while scenario math showed how different assumptions change available investment pools.

Trustees then turned attention to an emerging federal issue. Executive Vice President Goldman described a proposed change to NIH indirect‑cost reimbursement that would move from the university’s negotiated rate of 54% down to 15% for NIH awards and estimated the direct impact on NIH reimbursements at roughly $100–130 million per year. "It would be a tsunami coming from that," Goldman said, warning the cut would hit schools and colleges and the back‑office infrastructure that supports funded research.

President Cunningham told trustees a cut to overhead is a cut to the foundation for research and training: laboratories, data security, equipment and the facilities that support graduate training. Cunningham said the university is cataloging grants that administrators have been told to stop or that are under review and that legal action had at least temporarily paused part of the federal effort. "We're examining the legality of that and trying to understand if we need to actually stop them or if they can keep spending," the president said, urging faculty to continue work unless told otherwise by the university’s research office.

Administrators and trustees discussed responses including pursuing federal remedies, joining national associations that have taken up the issue, and preparing contingency plans. Trustees and administration also discussed the unavoidable tradeoffs in the FY2026 framework: even with additional state support, administrators said difficult choices about reallocation and program scope will be necessary to balance the budget while protecting critical services.

Next steps: administration will continue scenario planning and return with refined recommendations as fiscal information (state appropriations, enrollment projections, and potential federal developments) becomes clearer. The committee did not take a vote on budget variables at this meeting.