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The University of São Paulo is one of three major academic research centers in Brazil that could lose tens of millions of dollars held in reserve accounts under proposed legislation aimed at reducing a state budget deficit.

Marcos Santos/USP Imagens

In Brazil’s wealthiest state, scientists fear a budget plan could cripple research

Academic researchers in São Paulo, Brazil’s wealthiest and most populous state, are warning that proposed legislation before the state assembly could cripple major universities and long-term research projects. The state is home to three of the most prestigious universities in Latin America and produces 40% of Brazil’s scientific publications.

The bill, which could be voted on as soon as this week, aims to avoid a forecast 10.4 billion reais ($1.9 billion) shortfall in São Paulo’s 2021 budget, caused in large part by the COVID-19 pandemic. One provision calls for the state’s three major academic institutions—the University of São Paulo (USP), the University of Campinas (Unicamp), and São Paulo State University—to transfer money in their long-term reserve accounts to the state government. The São Paulo Research Foundation (FAPESP), a state agency that funds research and fellowships, would also have to hand over its reserve funds. Together, researchers estimate the accounts hold more than 1 billion reais.

The move has sparked an outcry among researchers, who note the reserve funds have been key to helping the universities and the foundation cope with economic challenges and pay for long-term projects. If enacted in its current form, the bill “will paralyze all scientific activities in the state of São Paulo,” the Brazilian Academy of Sciences warned in a letter. And it would cause “irreversible damage” to ongoing research, said the Brazilian Society for the Advancement of Science in a statement. More than 110,000 people have signed an online petition issued by the São Paulo Science Academy opposing the bill.

“We would have to close some [research] areas, we would struggle to pay salaries” if the current proposal becomes law, says Marcelo Knobel, Unicamp’s chancellor. “It would be an unprecedented situation.”

A spokesperson for the government, however, asserted in a statement that “The fiscal adjustment will not paralyze research or lead to a lack of resources for research financed by” the foundation. “Science has the full support of the State Government. The bill proposes to use surplus resources that are not destined to research projects or earmarked expenses to remedy a current problem, which is the need to pay civil servants, including teachers from these institutions themselves, with the sharp drop in revenue caused by the pandemic. … Certainly, it is not fair for the poorest population to be unassisted with medicines or health care, while universities and FAPESP may have surplus cash on hand.” 

University and foundation officials say losing the reserve funds would create two problems. One is that it would hamper their ability to tap the funds to cover budget deficits during lean years. Each of the institutions receives a fixed share of state tax revenues, but Brazil’s struggling economy has made that income stream less reliable in recent years. Unicamp, for example, has had to dip into its reserves to cover operating expenses in each of the past 6 years, Knobel says.

At the research foundation, loss of its reserve could threaten funding already committed to multiyear projects. The foundation typically funds projects that last two to 11 years. Researchers do not receive the total funding up front, however; the money is paid in installments. As a result, much of its reserve is already earmarked for future spending.

Backers of the legislation say the foundation’s reserve fund “is a surplus, but it’s not true,” says Mayana Zatz, a USP geneticist. Much of that money “is already committed.”

Zatz and others say the foundation’s reserve has also made it possible for it to respond rapidly to requests for funding to study emerging issues, such as the COVID-19 pandemic and the earlier Zika virus outbreak. And the foundation has been a lifeline for researchers in São Paulo in recent years, as the federal government has reducing spending on science. Federal research budgets have declined by roughly half since 2014, and last year Brazil’s major science funding agency was forced to suspend 4500 new research fellowships.

Last week, the chancellors of the three state universities met with members of the government to discuss the proposal. But they failed to persuade state officials to exclude universities from the bill, according to a note released after the meeting.

Now, researchers are hoping their public campaign will persuade the assembly to reject the proposal. But they are wary. “Unfortunately, most [lawmakers] have little understanding of how science works, so it’s worrying,” says Ohara Augusto, a chemist at USP and the coordinator of a large FAPESP research project. In particular, she fears passage of the bill could end decades of progress on building scientific excellence in Brazil. “Things were going well. … They weren’t perfect but we had hope,” she says. “But now this bill could bury our hope.”