Ballot Measure To Fund Stem Cell Research Would Reduce Health Care Costs, Increase Revenue, Study Finds

Proposition 71, a measure on the Nov. 2 statewide ballot that would issue state bonds to raise an average of $295 million annually over 10 years to promote stem cell research would generate at least $6.4 billion in additional state revenue, and treatments resulting from the research could reduce health care costs by $3.4 billion to $6.9 billion annually, according to a study released Tuesday by initiative supporters, the Sacramento Bee reports (Mecoy, Sacramento Bee, 9/15). The measure would provide funds for a new stem cell research center at a University of California campus, as well as grants and loans for laboratory projects at other colleges. State analysts have said that with interest, the measure would cost a total of $6 billion (California Healthline, 9/10).

The study -- by Laurence Baker, a Stanford University health research and policy professor, and Bruce Deal, managing principal of the Analysis Group -- found that the total economic benefit of the initiative could reach $12.6 billion by 2039, the estimated term for full repayment of the bonds.

The study's estimated annual health care savings assumes that research funded by the bond measure would result in the development of treatments or cures for six of the 70 conditions targeted for study.

The study also estimates that projects funded by the bond measure would generate $240 million in state income and sales taxes and $2.2 billion to $4.4 billion in state taxes on private investments in the biotechnology industry.

The state could collect $537 million to $1.1 billion from resulting patents and royalties from research funded by the bond measure, according to the study. In addition, the study estimates that the projects funded by the bond measure will help create 5,000 to 22,000 jobs in California per year.

The study's findings "helped win support" for Proposition 71 from the California Chamber of Commerce and other business groups, the Bee reports.

Proposition 71 Campaign Chair Robert Klein said, "Even if (Proposition 71) just mitigates disease by 2%, it would create a 250% payback for the state," adding, "It's huge."

Wayne Johnson, a consultant working on the campaign opposing Proposition 71, said, "Why don't they just borrow $20 billion, and they could solve the whole state's budget crisis?" He added, "We dispute the whole notion that borrowing money necessarily produces an economic benefit" (Sacramento Bee, 9/15).

Additional information on Proposition 71 is available online.