March 5, 2014
To: Council on Federal Relations
From: AAU Staff
Subject: CFR UPDATE (14-No. 9, 03-05-14)
Higher Education and Research Funding in President’s FY15 Budget Reflects Tight Caps
President Obama released his FY15 budget on March 4. Limited by the discretionary spending caps set by last year’s budget deal—which amount to an increase over FY14 of just $1.6 billion for both defense and nondefense programs—the budget provides slight increases that do not cover inflation for many research and education programs of interest to the research university community.
AAU expressed disappointment that the President’s proposed budget does little to help close the nation’s innovation deficit, the difference between what the federal government is investing in research and higher education and what it needs to be investing to sustain the nation’s global leadership. In fact, funding for basic research across the government would decline slightly.
To bolster spending for the President’s priorities, the budget proposes a supplemental $56-billion fund called the Opportunity, Growth and Security Initiative, which would provide additional funding, including an extra $5.3 billion for research, to be paid for by cuts in mandatory programs and tax increases on major corporations and wealthy individuals. In this election year, the additional funding initiative stands little chance of congressional approval.
The updated AAU FY15 funding priorities chart can be viewed here on the AAU FY15 Budget Page. Later this week, AAU will provide an analysis of the proposed FY15 budgets for specific research agencies and higher education programs.
NACUBO PROVIDES SUMMARY OF CHAIRMAN CAMP’S COMPREHENSIVE TAX BILL
The National Association of College and University Business Officers (NACUBO) has published a summary of the provisions affecting higher education in the comprehensive tax bill released on February 26 by House Ways and Means Committee Chairman Dave Camp (R-MI).
The four-page summary focuses on four key areas: student & education tax benefits; employee tax benefits; research; and financing tax-exempt organizations. The last category includes specifics on charitable giving; tax-exempt bond financing; and unrelated business income, excise taxes, and penalties.
CLOSE-THE-INNOVATION-DEFICIT VIDEO SPREADS THE MESSAGE
More than 5,500 people have now viewed the video that makes the case to Congress to “close the innovation deficit.” The four-minute video, featuring rapidly hand-drawn images and text, explains the direct link between basic research, economic growth, improved medical treatments, and national security, and the risk that recent cuts to research pose to the nation’s role as the global innovation leader at a time when other nations are rapidly increasing their own research investments.
The 14 higher education, research, and business organizations behind the video—including AAU—encourage campuses to share the video with members of their campus communities (students, faculty, staff, and alumni), policymakers, and other regional and national leaders. The video can be found at the Close the Innovation Deficit website. Campuses are also urged to promote the video and the website on Twitter using the hashtag #InnovationDeficit.
AAU UPDATES TAX BACKGROUND DOCUMENTS FOR 2014
AAU has updated for 2014 its background documents on higher education tax provisions. These documents include an overview of the federal tax provisions that affect colleges and universities, as well as documents on specific topics such as the student loan interest deduction, unrelated business income, tax-exempt financing, charitable gifts, and the R&D tax credit.
The updated documents can be viewed here.
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