States Are Building Their Own Research Empires as Federal Science Funding Fractures

Victor Ambros won the Nobel Prize in Physiology or Medicine in 2024 for discovering microRNA. He works at UMass Chan Medical School, where his lab depends on the National Institutes of Health for funding. This year, UMass Chan laid off 200 employees. The school's incoming Ph.D. cohort shrank from 73 students to 13. And Ambros is now spending his time advocating for something that would have seemed absurd five years ago: a state government fund to backstop the research that the federal government has historically financed.

"The DRIVE initiative is really, really appropriate," Ambros told STAT News, referring to Massachusetts' proposed $400 million Discovery, Research, and Innovation for a Vibrant Economy fund. "I would like to say it's timely, but I think it's actually long overdue."

He's not alone. Across the country, at least five states are building or proposing their own biomedical and scientific research funding programs — not as supplements to federal grants, but as insurance policies against a federal research apparatus that researchers no longer trust to function predictably. It's the most significant structural shift in American science funding in decades, and it will reshape how researchers plan their careers, where they locate their labs, and which institutions gain competitive advantages.

The Numbers That Forced the Conversation

The United for Medical Research coalition released its 2026 annual report last week, and the headline number is impressive: $36.58 billion in NIH awards generated $94.15 billion in economic activity and supported 390,863 jobs nationwide in FY2025 — a 250% return on investment, producing $2.57 for every dollar spent.

But the trend lines underneath that number are alarming. NIH funded 5,564 fewer grants in FY2025 than in FY2024. The success rate for grant applications fell to approximately 17% — the lowest in nearly 30 years, down from 26% the prior year. Nineteen states plus Washington, D.C. experienced at least a 10% decline in the number of awards they received.

The decline wasn't driven by budget cuts alone. NIH shifted toward multi-year awards that obligate full grant amounts upfront rather than distributing funding annually. This accounting change means that remaining-year funds are locked up and unavailable for new grants, effectively shrinking the pool of awards even when total dollars remain stable. The result: institutions like Virginia's research universities received roughly the same dollar amount but funded fewer individual projects, with the state losing over 1,000 research jobs despite maintaining $600 million in total NIH funding.

Then came the FY2027 budget proposal. The administration requested a $5 billion cut to NIH — smaller than last year's rejected $19 billion proposal, but still significant. More consequentially, the budget would eliminate several NIH institutes entirely, including the National Institute of Minority Health and Health Disparities and the Fogarty International Center, and the proposed 15% indirect cost cap continues to threaten the overhead revenue that keeps university research infrastructure operational.

Caitlin Leach, president of United for Medical Research, framed the stakes plainly: "It's important that NIH funding is not delayed, as it is spent each fiscal year." When research dollars are frozen or delayed, labs don't pause — they collapse. Graduate students leave for industry. Equipment maintenance lapses. Multi-year experiments lose continuity. And the economic multiplier reverses: every dollar removed from the research pipeline removes $2.57 from local economies.

The State Initiatives: What's Actually Being Proposed

Five states have moved beyond talk into legislation or ballot measures. The scale and ambition vary, but the direction is consistent: states are deciding that waiting for Washington is no longer a viable research strategy.

Massachusetts: DRIVE Initiative ($400 million). Governor Maura Healey's proposal would create a dedicated fund for biomedical and technology research at state universities and research institutions. The initiative is explicitly designed to provide bridge funding for researchers with approved but unfunded NIH grants — a population that has grown dramatically. UMass Chan alone has 40 pending NIH proposals with fundable scores totaling $152 million, but no timeline for disbursement. DRIVE would also support early-career faculty who need seed funding to generate preliminary data for federal applications — addressing the chicken-and-egg problem where you need data to get grants but need grants to generate data.

New York: Empire Biomedical Research Institute (EBRI). Governor Kathy Hochul has backed a $6 billion initiative that would create a new state entity dedicated to funding medical research. If enacted at anything close to its proposed scale, EBRI would make New York the largest non-federal research funder in the country. The proposal reflects New York's particular vulnerability: the state's research institutions received more NIH funding than any other state except California, and the concentration of medical schools and research hospitals in the New York City area means that federal uncertainty ripples through the state's entire healthcare economy.

Texas: Voter-Approved $3 Billion. Texas voters have already approved $3 billion in dedicated funding for dementia and neurological disease research. Unlike the other state proposals, which are still moving through legislatures, Texas money is committed and beginning to flow. The approval reflects a bipartisan recognition that an aging population creates research demands that can't wait for federal funding cycles to stabilize.

Pennsylvania: $50 Million Life Sciences Proposal. Governor Josh Shapiro has proposed a more modest $50 million fund targeted at life sciences research. While smaller than the Massachusetts or New York initiatives, the Pennsylvania proposal is notable for its focus on creating research capacity outside traditional academic medical centers — extending state funding to biotech startups, clinical trial networks, and translational research partnerships.

California: SB 607. The legislative route in California would create a state research funding mechanism, though the bill is still early in the process. California's research ecosystem is the nation's largest — the state received more NIH dollars than any other in FY2025 — and even modest disruptions in federal funding have outsized effects on the state's $50 billion life sciences industry.

Can State Money Actually Replace Federal Research Dollars?

The honest answer is no — not at anything approaching current federal scale. State and local governments contributed just 0.7% of total U.S. research and development spending in 2023. Even if every proposed state initiative passed at full funding levels, the combined total would represent a fraction of what NIH alone distributes annually.

But "replacement" isn't really the point. The state initiatives serve three functions that federal funding cannot:

Speed. Federal grants take 9-18 months from application to award under normal conditions, and current uncertainty has stretched some timelines to two years or more. State funds can move faster because they don't go through the same peer review bureaucracy. For a researcher whose lab is hemorrhaging talent because NIH funding is stalled, a six-month state bridge grant is the difference between maintaining a research program and shutting it down.

Insurance against political risk. Federal research funding is increasingly subject to political interference — whether through DOGE's direct termination of grants at agencies like NSF, where 1,752 grants worth $1.4 billion were killed, or through policy changes that target specific research areas. State funds create an alternative pathway for research that federal agencies can no longer reliably support. A researcher studying health disparities whose NIH application is caught in political crossfire can potentially continue working with state funding.

Talent retention. The competition for scientific talent is global. When a researcher at UMass Chan faces the choice between staying in a lab with frozen federal funding or taking a position at a European institution with stable support, a state bridge grant can tip the balance. States that invest in research infrastructure will attract and retain the researchers who generate the economic multiplier that makes the investment worthwhile.

Rory Cooper, a researcher at the University of Pittsburgh, advocates for a diversified model: combining state, federal, foundation, philanthropic, and industry funding rather than depending on any single source. "You need multiple streams," he argues, and the states that build those streams first will have a structural advantage in recruiting talent and anchoring research institutions.

What This Means for Researchers Seeking Funding

The emergence of state research funding creates new opportunities but also new complexity. Researchers who have spent their careers navigating NIH and NSF now need to learn entirely new funding landscapes.

Monitor your state's legislative calendar. Most of these initiatives are still moving through legislatures and will evolve significantly before final passage. Track them through your institution's government relations office or directly through state legislature websites. The details — eligible institutions, allowable costs, match requirements, reporting obligations — will matter enormously for whether a given program is useful for your research.

Position for bridge funding. Several state programs are explicitly designed to support researchers with fundable NIH scores who are waiting for awards. If you have a pending federal application with a strong score, document it and be ready to apply for state bridge funding as soon as programs open. The window between program launch and first applications may be narrow.

Think regionally, not just institutionally. State funding programs often prioritize in-state economic development, which means they may favor multi-institutional collaborations, industry partnerships, and research with clear applications to state economic priorities. A basic science proposal that works at NIH may need to be reframed for a state audience that cares about jobs, commercialization potential, and healthcare delivery improvements.

Early-career researchers: explore state opportunities first. The traditional advice for new faculty has been to build toward an R01. That advice isn't wrong, but in an environment where NIH success rates are at 30-year lows, using state funds to generate preliminary data can accelerate the timeline to federal competitiveness. States that invest in early-career programs are explicitly trying to build this pipeline.

Watch for foundation coordination. Private foundations are already coordinating with state initiatives to avoid duplication and maximize coverage. The major research foundations — Howard Hughes Medical Institute, Simons Foundation, Kavli Foundation — are positioning their programs to complement rather than compete with emerging state funds. Researchers who can stack state, foundation, and federal support will have the most resilient funding portfolios.

The Longer View

The current moment feels like a crisis, and for researchers whose labs are losing staff and students, it is one. But the structural shift toward diversified research funding may ultimately prove beneficial. American science has been unusually dependent on a single federal agency — NIH distributes more research funding than many countries spend on their entire science budgets. That concentration creates efficiency but also fragility.

The states moving to build their own research capacity are, perhaps inadvertently, creating the kind of distributed, resilient funding ecosystem that can survive political shocks. If Massachusetts, New York, Texas, and California each maintain substantial research funds, no single political decision in Washington can cripple American biomedical research the way a sustained NIH freeze could today.

Over the past decade, NIH funding generated $822 billion in economic activity and supported 3.7 million jobs. States are betting that research funding isn't charity — it's infrastructure. The ones that invest now will be the ones that capture the next generation of discoveries, companies, and talent. The ones that don't will watch their researchers, and their economic futures, relocate.

For researchers navigating this shifting landscape, tools like Granted can help identify state, federal, and private funding opportunities in one place — a capability that matters more than ever when the answer to "who funds this research?" is no longer a single agency.