Trump administration plans for federal contracts stir worries across Kentucky

By Jamie Lucke, Kentucky Lantern

From farm­ers who have installed fenc­ing for rota­tion­al graz­ing to med­ical researchers run­ning mil­lion dol­lar lab­o­ra­to­ries, Kentuckians are wor­ried about Trump admin­is­tra­tion dis­rup­tions to fed­er­al con­tract payments.

University of Kentucky President Eli Capilouto on Monday said a deci­sion announced late Friday by the National Institutes of Health (NIH) “will cost UK tens of mil­lions of dol­lars annu­al­ly and will hit our local and state economies.”

Capilouto said the new pol­i­cy would affect UK research in can­cer, heart dis­ease, children’s health, Alzheimer’s and opi­oid use disorder.

In a mes­sage sent cam­puswide, Capilouto said UK”s “gov­ern­ment rela­tions team is in Washington again this week, meet­ing with our con­gres­sion­al del­e­ga­tion and oth­ers to com­mu­ni­cate how fun­da­men­tal­ly impor­tant and seri­ous this issue is to our com­mu­ni­ty and all those we serve through dis­cov­ery and healing.”

The NIH announced it is low­er­ing pay­ments for indi­rect costs to 15% for all exist­ing and new con­tract awards. “This one change, if enact­ed for the next 12 months, would rep­re­sent a cut of at least $40 mil­lion to the University and its crit­i­cal research efforts on behalf of the health of our state,” Capilouto said.

Capilouto said rates for indi­rect costs have been nego­ti­at­ed between insti­tu­tions and the NIH and range from 20% of a grant award to 54%, depend­ing upon the research being con­duct­ed and the terms of the award.

Payments for indi­rect costs cov­er items that make basic research pos­si­ble, Capilouto said, such as build­ing and out­fit­ting labs; research equip­ment; ven­ti­la­tion, heat and light­ing; tech­nol­o­gy, and grad­u­ate stu­dents who work in labs.

In its Friday announce­ment, the NIH said pri­vate foun­da­tions that fund research pro­vide sub­stan­tial­ly low­er indi­rect costs than the fed­er­al gov­ern­ment and uni­ver­si­ties read­i­ly accept grants from these foundations.

But Capilouto said pri­vate foun­da­tions do not fund the kind of basic sci­ence that the fed­er­al gov­ern­ment has tra­di­tion­al­ly sup­port­ed. “The com­par­i­son between a pri­vate foun­da­tion pro­vid­ing a grant around research in edu­ca­tion pol­i­cy, for exam­ple, sim­ply does not involve the same cost or cost struc­ture as a basic sci­ence grant that could include build­ing and lab space and all the sup­ports that go along with that infra­struc­ture. The com­pli­cat­ed dis­cov­ery and research our inves­ti­ga­tors per­form cost more than the research often fund­ed by pri­vate foundations.”

A spokesper­son for the Kentucky Council on Postsecondary Education said: “NIH fund­ing is essen­tial to uni­ver­si­ty research that leads to med­ical break­throughs and improved health out­comes for Kentuckians. Indirect funds sup­port facil­i­ties and infra­struc­ture need­ed to advance this work. CPE is mon­i­tor­ing the sit­u­a­tion as it develops.”

Conservation payments to farmers frozen

Meanwhile, sev­er­al media out­lets report that the U.S. Department of Agriculture has frozen pay­ments to farm­ers for con­ser­va­tion projects and pos­si­bly oth­er USDA programs.

Myrisa K. Christy, exec­u­tive direc­tor of the Community Farm Alliance, said she began get­ting calls from Kentucky farm­ers  say­ing they could not access USDA pay­ments after a Jan. 27 memo went out from the Trump bud­get office announc­ing a freeze on fed­er­al payments.

The memo, which was quick­ly rescind­ed, said direct pay­ments to farm­ers would not be affect­ed, and fed­er­al courts have issued orders tem­porar­i­ly block­ing the pay­ments freeze.

Nonetheless, Christy said she’s heard from eight indi­vid­u­als or agribusi­ness­es in Kentucky due a total of rough­ly $500,000 who have been unable to tap their promised pay­ments from the USDA.

“I asked them ‘have you been told your reim­burse­ment is frozen?’ And they say, ‘no, but I was told I couldn’t draw down.’”

Christy said delays in reim­burse­ments to farm­ers who have, for exam­ple, already put up the mon­ey to build high tun­nels to pro­long the grow­ing sea­son or installed projects to pre­vent soil ero­sion can jeop­ar­dize a farm’s future. The con­cerns are com­ing at a finan­cial­ly stress­ful time of year when farm­ers may need to buy extra feed for live­stock and are order­ing sup­plies for spring planting.

“The issue is even a few weeks of delayed pay­ments can real­ly impact our small- to medi­um-sized fam­i­ly farms.” Such uncer­tain­ty also dis­cour­ages new farm­ers, she said.

Trump signed an exec­u­tive order on the day of his inau­gu­ra­tion freez­ing spend­ing autho­rized by the Inflation Reduction Act (IRA) of 2022 and the Infrastructure Investment and Jobs Act which were enact­ed when Democrat Joe Biden was pres­i­dent. The freeze includes pay­ments under Natural Resource Conservation Service pro­gram contracts.

Christy of the Community Farm Alliance said it’s not always clear to farm­ers if their con­ser­va­tion projects were fund­ed through those laws or through fund­ing pro­vid­ed by Congress when Republican President Donald Trump was serv­ing his first term.