Hello, this is Professor Tim Greaney from UC Hastings College of Law. I’ve been asked to provide a brief analysis of Proposition 14 on California’s November ballot. Prop 14 would increase funding for stem cell research by enabling California to issue general obligation bonds in the amount of $5.5 billion. The money received through these bonds would fund grants to universities, hospitals, and research institutions through a state agency, the California Institute of Regenerative Medicine (CIRM). Approximately a quarter of the total funds will be dedicated for research on therapies and treatments for brain and nervous system diseases. Upwards of .5% of the total funds would be spent on the Shared Labs program, which are state funded facilities dedicated to research on human embryo stem cells. Prop 14 restricts CIRM from spending more than 7.5% of the bond funds on operation costs. The proposition also adds requirements on how the institution distributes its funds: mandating improved patient access to stem cell treatments, prioritizing projects that use matching funds from outside sources, and increasing public oversight.
By way of background, let me explain what general obligation bonds are. These are debt obligations the state takes on secured by the state’s pledge to use all available resources, including state tax revenues, to repay holders of the bond. While estimates vary, the total cost to California, when we add interest the state would have to pay on the bonds, is estimated to be over $7.5 billion. Second, a word on stem cell research. Stem cells have been described as a kind of wild card for the human body, or they are blank cells that can develop into cells with a specific purpose. Scientists are seeking to find ways to use them to find cures for cancer, fix failing organs, develop drugs, and, more recently, find treatments and vaccines for the coronavirus pandemic. If Prop 14 passes, almost a quarter of the money raised must be used to fix brain and nervous system diseases like Parkinson’s and Alzheimer’s.
There’s some history behind Prop 14. In 2004, California approved a $3 billion bond fund for stem cell research and established the institute. That money has been almost entirely used up as CIRM has distributed millions in grants and established a large infrastructure of research institutes. A major impetus for the 2004 proposition was concern about restrictions on stem cell research by the George W. Bush administration. Those restrictions have been removed. Supporters of Prop 14 stress that prior funding has established a strong infrastructure for stem cell research in the state and has served to initiate dozens of experimental treatments into human trials. The institute has also provided $5 million dollars to support projects dedicated to combating COVID-19, including research dedicated to developing vaccines. Proponents explain the need for government funding by arguing that private investment often lags for basic research. They also note that the proposal spreads investments over 30 years, over which period significant savings in the cost of care may be realized by Californians. It has the support of many major health care institutions and patient advocacy groups around California.
Opponents criticized Prop 14 on a number of grounds. They argue that the program was oversold with promises of cures and major breakthroughs that have not occurred. On this score, they questioned whether the hoped for benefits can be justified by the costs, especially in this time of enormous burdens on the state as a result of the pandemic. Another line of criticism focuses on the governance of the institute, asserting there are significant conflicts of interest on its governing board and that although it is a state agency, it lacks effective oversight from the legislature. Finally, some opponents also oppose on moral grounds any research that involves what they claim is the creation by cloning and destruction of human embryos. At bottom, voters will need to decide whether the long term benefits both in gaining important advances in medicine and in potential long term cost savings justify California taking on additional debt at a time when it faces enormous financial challenges.