The University of Minnesota is asking state lawmakers for a budget increase of $235 million for the 2026 to 2027 school years. President Rebecca Cunningham made the ask during the first of three expected budget presentations at the Capitol Thursday.

The presentation, however, quickly turned to concerns about possible federal funding cuts.

“Can you shed some more light on how what’s happening right now with cuts at the federal level could potentially change these numbers or impact these numbers?” asked Rep. Dan Wolgamott. “Specifically, I was very concerned to hear about the NIH reduction.”

The National Institutes of Health provides research grants to universities for direct and indirect costs.

“One of the benefits of a research university is we bring external dollars from the federal government in a large amount,” said Cunningham. “The largest source of those funds is NIH, overwhelmingly for us.”

Indirect expenses can include facilities and equipment. Most universities negotiate those rates. According to Cunningham, it’s 54% for the University of Minnesota. An NIH announcement earlier this month proposed capping the indirect cost rate at 15% for all grants.

“It would be an immediate cut of between $100 and $130 million,” said Cunningham. “It would be a direct cut to our research. You can’t fund individual research if you don’t fund the equipment that they need to do the work on, or the buildings they need to work in, or the utilities for that building.”

She explained NIH funding supports engineering research and work done by the veterinary school, including assessing bird flu and protecting the state’s poultry population. The largest impact of the proposed cuts, however, would be felt by those conducting biomedical research at the University.

“While we would be gutted, many other universities would be gutted, and as a nation, what that would mean is the devastation of our biomedical complex for the world,” said Cunningham.

She told lawmakers it could also affect their ability to attract additional dollars.

“Every year, we increase our research portfolio by six, seven, eight percent, and as do our peers, so we continue to get the market share we need to keep us competitive as a state and as a university from the government,” said Cunningham. “I can’t accept money for you as the researcher to do x, y and z experiment if you don’t have the bench for them to work at, and the building for them to be in and the equipment they need so we would not be able to accept and [an] awful lot of research.”

A federal judge has temporarily blocked the proposed cuts after state attorneys general, including Minnesota Attorney General Keith Ellison, sued. A hearing is set for Friday.

“We have thousands and thousands and thousands of our university employees are actually completely funded on federal grants so this would impact jobs in our communities tremendously,” said Cunningham.