As NIH Grant Odds Crater, States Are Building Their Own Research Funding Empires

At the National Cancer Institute, the odds of winning an R01 grant have fallen to the 4th percentile — meaning 96 out of every 100 proposals go unfunded. At UMass Chan Medical School, the incoming PhD class was slashed from 73 students to 13, and 200 employees were furloughed. Across the country, labs with fundable scores on their NIH proposals are watching those proposals sit in limbo, waiting for money that may never arrive.

But something unexpected is happening in statehouses from Sacramento to Albany. State governments — historically responsible for less than 1 percent of U.S. research spending — are moving to fill the gap with programs that would have been unthinkable five years ago.

A $23 Billion Bet in California

The most ambitious effort is California's Senate Bill 607, the California Science and Health Research Bond Act. If the legislature approves it by a two-thirds vote in both chambers, voters in November 2026 will decide whether to issue $23 billion in bonds to fund biomedical research, climate science, and infectious disease work across UC, CSU, and private institutions statewide.

The bill, introduced by state Senator Scott Wiener and Assembly member Jose Luis Solache Jr., would create the California Foundation for Science and Health Research — a new state entity that awards grants through competitive peer review with annual independent audits. Proponents are making a straightforward economic argument: the NIH alone supports more than 55,000 jobs in California and generates roughly $14 billion in economic activity. When federal cuts threaten that engine, the state has a financial interest in keeping it running.

California has done this before. In 2004, voters approved a bond measure that created the California Institute for Regenerative Medicine, which funded stem cell research for two decades. SB 607 is that model scaled up by an order of magnitude.

Massachusetts Moves First With $400 Million

Governor Maura Healey is not waiting for a ballot measure. Her DRIVE (Discovery, Research and Innovation for a Vibrant Economy) initiative commits $400 million in state funds — split between a $200 million research pool for hospitals, universities, and public research institutions, and another $200 million from Fair Share surtax revenue for public higher education campuses.

The urgency is personal for Massachusetts. The state is home to Harvard, which has had roughly $2.6 billion in federal funding frozen by the Trump administration, along with MIT, the Broad Institute, and dozens of biomedical startups that grew out of NIH-funded labs. A UMass Donahue Institute analysis found that every state dollar invested in R&D generates double the return in economic activity. Nearly $9 billion in annual federal research funding supports approximately 80,000 jobs across the commonwealth.

Healey has already assembled a DRIVE Acceleration Team — including former CDC director Rochelle Walensky, a Bain Capital managing director, and faculty from Harvard Medical School — to design the funding structures. The first grants could flow before the end of the fiscal year.

New York's $6.5 Billion Vision

New York is thinking even bigger in scope, if not yet in committed dollars. The Associated Medical Schools of New York proposed the Empire Biomedical Research Institute, or EBRI, with a $500 million initial investment and a $6 billion, 10-year commitment to fund investigator-driven research, modernize infrastructure, and expand workforce training.

The proposal has backing from more than 35 major institutions and frames EBRI as a standalone state research institute that would distribute grants through rigorous peer review. New York trains one in seven American doctors and one in eleven biomedical researchers. Its 35,000 federally funded research workers and 120,000 bioscience employees represent an economic base that state leaders are keen to protect.

Whether the full $6.5 billion materializes is an open question — but the fact that it is being seriously discussed in budget negotiations tells you how fundamentally the landscape is shifting.

Texas and Pennsylvania Fill Different Niches

Not every state response is a moonshot. Texas voters approved a $3 billion Cancer Prevention and Research Institute reauthorization focused specifically on dementia and cancer research — a narrower mandate but substantial money. Pennsylvania Governor Josh Shapiro proposed a $50 million PA Innovation program, including $30 million for life sciences job growth and connections between research universities and commercial partners. That is a smaller figure, but Pennsylvania's approach emphasizes speed to market — helping discoveries get commercialized within the state rather than migrating to Boston or San Francisco.

These five states are not acting in isolation. The STAT News report that broke the trend on February 20 noted that NIH Director Jay Bhattacharya has signaled plans to redistribute federal grants geographically, creating additional anxiety for states that have historically received the largest shares of NIH funding. State programs become both a hedge against redistribution and a competitive advantage for retaining talent.

What This Means If You Are Writing a Grant Right Now

The practical implication is that your funding strategy should no longer treat state sources as an afterthought. Here is how to adjust:

Track the new programs. California's SB 607, Massachusetts DRIVE, and New York's EBRI are all at different legislative stages. If you are at an institution in those states, your sponsored research office should already be monitoring these — if they are not, push them.

Diversify your pipeline. If you have a proposal that scored well at NIH but did not get funded, it may be directly competitive for state-level programs that prioritize established, peer-reviewed research. Massachusetts DRIVE and California SB 607 both explicitly prioritize projects that lost federal funding.

Watch for eligibility rules. State programs often restrict funding to in-state institutions or require in-state economic impact. Read the fine print before assuming your NIH proposal translates directly.

Do not abandon federal applications. Congress rejected the administration's proposed 40 percent NIH cut and actually increased the base budget by $415 million to $47.2 billion. The forward-funding policy that crushed NCI paylines is being reined in — the appropriations bill blocks NIH from forward-funding more than half its new grants. Federal success rates should stabilize, even if they do not return to pre-2025 levels soon.

The era of relying on a single federal funder for your research program is ending. States are building the infrastructure to become real partners in research funding, and the researchers who position themselves to access both tracks will have a structural advantage over those who do not.

If you are trying to identify which state, federal, and foundation grants match your work, Granted pulls from 144 data sources across all 50 states — including these emerging state-level programs as they go live.