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Recent Reports & Studies

July 28, 2000

Academic Indirect Cost Rates 

Paying for University Research Facilities and Administration, a report released this week by the RAND Science & Technology Policy Institute, finds universities are already paying a significant share of the costs associated with their research partnership with the federal government. Pressures to increase that cost-sharing could lead to a slowdown in investment on research and research infrastructure and, potentially, to a decline in the partnership's contributions to health, education, defense, science and other vital research areas, according to the report's authors, Charles A. Goldman and T. Williams, with David M. Adamson and Kathy Rosenblatt. 

Federal spending for scientific research at U.S. academic institutions amounts to approximately $15 billion each year. Roughly one-fourth of the total, around $3.75 billion, is for indirect costs or facilities and administration (F&A). Using two different calculation methods, the study's authors estimate that universities have been recovering between 70 and 90 percent of their federal project F&A costs during the past decade. 

While cautioning that data was limited, the authors also report the available evidence indicates that universities have lower F&A costs than federal laboratories and industrial research laboratories. The report was prepared in response to a 1998 Congressional request. RAND runs the Science & Technology Policy Institute for the White House Office of Science & Technology Policy. The full report is available on the Web: http://www.rand.org/publications/MR/MR1135.1 

E-commerce and Sales Taxes 

Predicting the impact of e-commerce, globalization, and Internet purchases on state sales and use tax revenues is a tricky business, according to the General Accounting Office, but several different scenarios presented in a new GAO report forecast revenue losses for state and local governments ranging between one and eight percent by as soon as 2003. Internet sales will account for an increasing share of remote sales and may account for as much as 60 percent of the lost revenues in the GAO's most dire scenario in Sales Taxes: Electronic Commerce Growth Presents Challenges; Revenue Losses are Uncertain. Studies by other independent groups, the GAO points out, have also produced a wide variance in the results, predicting sales tax revenue losses for 2003 ranging from $3.5 billion to $10.8 billion. 

While several states do not levy any sales taxes, six states -- Florida, Nevada, South Dakota, Tennessee, Texas, and Washington -- obtain more than 50 percent of their revenues from general sales taxes. Localities that levy sales taxes are likely to be effected, too. On average, sales taxes account for 33 percent of state and 11 percent of local tax revenues. 

The June report includes several tables presenting estimates for sales tax revenues and losses for each state in 1998 and along several scenarios through 2003. The full report can be downloaded from: http://www.gao.gov/new.items/g600165.pdf