Should the state borrow more to fund medical research?

Three decades ago, as the 20^th century was winding down, a culture war erupted over the use of human embryos in researching stem cell cures for dreaded diseases.

It was a subset of the nation’s never-ending conflict over abortion. After Republican George W. Bush won the presidency in 2000 his administration barred the use of embryos in genetic research, a policy President Barack Obama later revoked.

In 2004, Robert Klein, a wealthy Bay Area real estate developer whose son suffered from Type 1 diabetes, launched a campaign to stimulate genetic research in California that didn’t rely on federal funds.

Actors Michael J. Fox and Christopher Reeve, who were dealing with their own chronic medical conditions, starred in ads promoting Proposition 71, a 2004 ballot measure creating the California Institute for Regenerative Medicine. The measure also authorized $3 billion in bonds that the new state agency would distribute to research projects.

Klein contributed heavily to the Prop. 71 campaign, raised money from others and served as the first chairman of the agency’s board. The campaign’s pitch to voters was not only that dread diseases would be cured but that California would reap the economic benefits of taking the lead.

Voters endorsed the measure over the opposition of religious anti-abortion groups, and the agency began awarding grants to researchers, many of whom had ties to members of the new agency’s board of directors.

Over the ensuing years it has touted several successes, but there has been no independent analysis of results. As the initial $3 billion was running out, advocates wrote a 2020 ballot measure, Proposition 14, that authorized another $5.5 billion in bonds. It won voter approval.

Now the willingness of California voters to again float bonds for medical research underlies Proposition 38 on the Nov. 3 ballot. And it raises questions about whether its sponsors would have the inside track for its $8.4 billion in proposed bond money.

CalMatters delved into the very specific language of the measure and determined that the California Institute for Immunology and Immunotherapy, founded and headed by billionaire Gary Michelson, would be the only organization that would qualify for half of the money. Michelson is one of the major backers of Prop. 38.

The other half of the bond issue would be distributed as grants to research applicants by a new council selected by representatives of seven University of California campuses, and each grant recipient will be linked to a member of the council.

At this juncture, it’s important voters understand something about state general obligation bonds: They are not free money, even if sponsors often imply that they are. Bonds are loans from banks and other investors and, like all loans, must be repaid with interest.

The Legislative Analyst’s Office has estimated the state budget would have to appropriate about $500 million a year for 25 years to service Prop. 38’s bonds, or about $12.5 billion total. Bond repayments have the highest legal priority in the budget, so they displace funds that could otherwise be spent on education, healthcare or other services.

Issuing bonds to support one avenue of medical research is a questionable activity regardless of cost. If the state has a legitimate role to play in such research, all potential fields should be explored, not merely pet projects and organizations that some billionaire patrons have chosen to the exclusion of others.

Nevertheless, immunology is not the last field that voters will be asked to support.

Gov. Gavin Newsom has signed new legislation, Senate Bill 895, that creates another new agency to award scientific research grants, the California Foundation for Science and Health Research. The measure places a $7.5 billion bond issue on the 2028 ballot to provide the new foundation with funds to distribute.