by Christopher Pece[1]

State government agency expenditures for research and development totaled $2.5 billion in FY 2018, an increase of 3% from FY 2017 (table 1). Health-related R&D expenditures were $1.1 billion, continuing to constitute the largest share (44%) of all state government agencies' R&D. Energy-related R&D expenditures increased 29% between FY 2017 and FY 2018, reaching $397 million. This InfoBrief presents summary statistics from the FY 2018 Survey of State Government Research and Development, sponsored by the National Center for Science and Engineering Statistics (NCSES) within the National Science Foundation. Amounts reported do not include direct appropriations from state legislatures to universities, colleges, and private organizations.

National Totals

Of the $2.5 billion in state government agency R&D expenditures in FY 2018, 79% came from state and other nonfederal sources (table 1). The majority (75%) of state government agency R&D expenditures went to extramural R&D performers (i.e., performers other than state agencies). Higher education institutions were the primary recipients of these expenditures with 57% of all extramural funding,[2] followed by companies and individuals (23%). Intramural performers of R&D, the state agencies themselves, received $640.8 million in FY 2018, up slightly from the $640.2 million in FY 2017.

Although all state governments had expenditures for R&D in FY 2018, the amounts are often concentrated in a handful of states. For instance, six state governments (California, New York, Texas, Florida, Pennsylvania, and Ohio) accounted for 67% of all state government R&D expenditures in FY 2018 (table 2).

Expenditures for R&D plant (construction projects, major building renovations, major equipment purchases, and land and building acquisitions intended primarily for R&D use) totaled $12.8 million in FY 2018, an 81% decrease from the $68.0 million reported in FY 2017 (table 1). R&D plant expenditures are highly variable year to year and will increase or decrease as projects begin or end.

State Governments' R&D Funding and Performance

Overview

Individual state government expenditures on R&D in FY 2018 ranged considerably, from $1.8 million in Vermont to $633.1 million in California, but these expenditures also vary by state between extramural and intramural R&D (table 2). Overall, 75% of states' $2.5 billion R&D expenditures are provided to extramural performers; 25% of the total was for state intramural R&D performance.

Intramural R&D Performance

Five states accounted for 66% of the $640.8 million in expenditures for intramural R&D performed by all state agencies in FY 2018: New York ($240.6 million), California ($78.3 million), Florida ($51.6 million), South Carolina ($28.4 million), and Connecticut ($22.5 million) (table 2). In FY 2018, 40% ($254.1 million) of all state agency intramural R&D performance was supported by federal funds. However, federal funding for state intramural R&D is highly concentrated, with four states accounting for 64% of all federal funding used for intramural R&D. New York State, alone, received 46% ($117.3 million) of all federal funding used by state agencies for intramural R&D, while South Carolina received 8% ($20.2 million), Florida received 5% ($13.7 million), and Oregon received 5% ($12.1 million) (table 2).

The majority (79%) of state government intramural R&D performance in FY 2018 is directed toward applied research ($507.8 million), whereas basic research constitutes approximately 17% ($110.5 million) and experimental development is 4% ($22.6 million) (table 1). All state governments, except Michigan[3] and Nebraska, reported a portion of their intramural R&D as applied research.[4] In FY 2018, 28 state governments reported some intramural R&D as basic research and 25 reported some intramural R&D as experimental development. Fourteen state governments reported all their intramural R&D as applied research. New York accounts for 61% of all intramural state government expenditures for basic research, 34% of all applied research, and 14% of all experimental development.

Extramural R&D Performance

Six states accounted for 69% of the total $1.9 billion in FY 2018 state government expenditures for extramural R&D performance: California ($554.8 million), Texas ($225.4 million), New York ($209.6 million), Florida ($134.9 million), Pennsylvania ($94.4 million), and Ohio ($91.9 million) (table 3). However, states varied in how they distributed extramural R&D. For example, Texas state agencies directed 81% of their extramural funding for R&D toward higher education institutions ($181.6 million) compared with 19% ($42.6 million) to companies and individuals. By comparison, Ohio state agencies directed 69% of their funding for extramural R&D performance toward companies and individuals ($63.4 million) and 29% ($27.0 million) to higher education. California's distribution of extramural R&D funding is relatively balanced across the three sectors with 37% ($205.6 million) directed towards higher education, 35% ($194.9 million) directed towards companies and individuals, and 28%, ($154.3 million) towards other performers.

In addition to Texas, state agencies in California ($205.6 million), New York ($120.2 million), Florida ($81.8 million), Pennsylvania ($53.9 million), and Ohio ($27.0 million) combined accounted for 62% of the total support to higher education institutions ($1.1 billion) in FY 2018. Similarly, state agencies in California ($194.9 million), Ohio ($63.4 million), Texas ($42.6 million), New York ($23.3 million), and Connecticut ($20.7 million) combined accounted for 77% of the total R&D support from state governments to companies and individuals ($446.5 million) in FY 2018.

The share of federal funds was much smaller for extramural R&D expenditures than for intramural R&D expenditures (14% versus 40%) (table 2). However, similar to intramural expenditures, federal funds for extramural R&D are concentrated in some of the larger state governments. New York, California, Texas, Florida, and Louisiana accounted for 38% ($104.2 million) of all federal funds used for extramural R&D.

R&D by State Government Functions

Most states reported a broad mix of R&D projects related to state government functions: agriculture, energy, environment and natural resources, health, and transportation (table 4). Health-related R&D expenditures account for the largest share (44%) of state agencies' R&D. Environment and natural resources R&D expenditures accounted for 17% of total state government R&D expenditures in FY 2018. Energy-related R&D expenditures increased 29% from FY 2017 and now constitute 16% of all state government R&D. Transportation, agriculture, and all other projects' shares of total R&D expenditures in FY 2018 were 10%, 5%, and 9%, respectively.

Among all functions, health-related R&D have shown the most growth between FY 2009 and FY 2018 (figure 1). When adjusted for inflation,[5] health R&D expenditures increased 46% from $686.8 million in FY 2009 to $1.0 billion in FY 2018. During the same 9-year period, agriculture and environment and natural resources-related R&D expenditures increased 69% and 12%, respectively, while transportation decreased 8% from $254.0 million in FY 2009 to $234.3 million in FY 2018. The energy function was not collected separately until FY 2010,[6] but it has shown increases in inflation-adjusted expenditures of 52% from FY 2010 to FY 2018.

NOTES: Gross domestic product implicit price deflators were used to convert current to constant dollars. Because of rounding, detail may not add to total. State R&D totals can display considerable volatility between survey years due to several national and state-specific factors. Large changes are not unusual, especially for discretionary spending items such as R&D. The Energy category was introduced with the FY 2010 and FY 2011 Survey of State Government Research and Development. Previously, energy-related R&D was reported primarily in the categories Other and Environment and natural resources.

SOURCE: National Science Foundation, National Center for Science and Engineering Statistics, Survey of State Government Research and Development.

Figure 1 Source Data: Excel file

Agency R&D Details

Of all 706 state agencies that responded to the survey in FY 2018, the largest 20, by total expenditures, accounted for 62% of all agency R&D expenditures (table 5). These agencies accounted for $933.8 million of the $1.1 billion in state agency health R&D, or 84%, while also accounting for 86% of all state government energy R&D. The largest individual state agency, the California Institute for Regenerative Medicine constituted 22% of all health-related R&D. Similarly, the California Energy Commission accounted for 53% of all state agencies' energy-related R&D expenditures. Although health and energy functions are highly concentrated in handful of agencies, the largest 20 agencies only account for 15% and 16% of all agriculture- and transportation-related R&D, respectively.

Data Sources and Limitations

Data presented in this InfoBrief are in current dollars, unless specifically cited that they have been adjusted for inflation. All 50 states and the District of Columbia participated in the FY 2018 survey, and 706 of the 759 selected agencies (93%) responded to the survey. Puerto Rico agencies did not respond to the survey for FY 2018. Data for the FY 2018 survey were collected for NCSES by the U.S. Census Bureau under an interagency agreement.

Most states' fiscal years begin on 1 July and end the following 30 June. For example, FY 2018 begins on 1 July 2017 and ends on 30 June 2018. There are, however, five exceptions to the 30 June fiscal year end: New York (ends 31 March), Texas (ends 31 August), and Alabama, Michigan, and the District of Columbia (ends 30 September). Data presented in this InfoBrief are for each of the respective fiscal year periods as defined by the states.

Terms such as state, state government, and state agencies have equivalent meaning and are used interchangeably throughout this InfoBrief. The amounts reported here are for R&D expenditures of state government departments, agencies, public authorities, institutions, and other dependent entities that operate separately or somewhat autonomously from the central state government. State government R&D totals can display considerable volatility between survey years due to several national and state-specific factors. Large changes are not unusual, especially for discretionary spending items such as R&D.

Amounts reported do not include direct appropriations from state legislatures to universities, colleges, and private organizations. As a result, the $1.0 billion in FY 2018 expenditures reported by state agencies to support R&D performance by academic institutions differs from the figure reported by universities and colleges in FY 2018 ($4.3 billion) for expenditures on R&D activities that were funded from state and local government sources. (See National Center for Science and Engineering Statistics, National Science Foundation. 2018. Higher Education Research and Development: Fiscal Year, 2018. Data Tables. Alexandria, VA. Available at https://www.nsf.gov/statistics/srvyherd/#tabs-2.)

State- and agency-specific data not available in this InfoBrief will be available in the full set of data tables from this survey in the report State Government Research and Development: FY 2018, at https://www.nsf.gov/statistics/srvystaterd/#tabs-2. Individual data tables from the FY 2018 survey may be available in advance of the full report. For further information, contact the author.

Notes

[1] Christopher Pece, Research and Development Statistics Program, National Center for Science and Engineering Statistics, National Science Foundation, 2415 Eisenhower Avenue, Suite W14200, Alexandria, VA 22314 (cpece@nsf.gov; 703-292-7788).

[2] State agency expenditures directed toward higher education institutions under this survey do not include direct state appropriations to colleges and universities.

[3] See table 2. Michigan is the only state government that did not report having any intramural R&D in FY 2018.

[4] Data for state government expenditures for intramural R&D, by state and type of R&D (i.e., basic research, applied research, and experimental development) are available in the detailed statistical table 7, available at https://www.nsf.gov/statistics/srvystaterd/#tabs-2.

[5] Gross domestic product implicit price deflators were used to convert current to constant 2012 dollars. Data on federal fiscal year, historical figures, 1953–2018 can be found in Office of Management and Budget. 2019. Budget of the U.S. Government, Fiscal Year 2020. Historical Tables (Table 10.1). Available at https://www.govinfo.gov/features/budget-fy2020. Data on projections, 2019–21 can be found in Office of Management and Budget. 2019. Economic assumptions and overview. In Analytical Perspectives, Budget of the U.S. Government, Fiscal Year 2020. Available at https://www.whitehouse.gov/wp-content/uploads/2019/03/spec-fy2020.pdf.

[6] The Energy category was introduced with the FY 2010 and FY 2011 Survey of State Government Research and Development. Previously, energy-related R&D was reported primarily in the other category, and to some degree in the environment and natural resources category.