California Proposition 71 | California Proposition 71 |
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| Background | What the Proposition Says | Financial Impacts | What's the big deal? | Proposition Text |
| On the surface, Proposition 71 may seem like just any other bond measure– $6 billion of the public money being spent for something that the public deems necessary for the proper functioning of the state. Yet, in reality, Proposition 71 is nothing like the many other bond measures on the ballot in 2004 or in practically any other year, for that matter. Virtually every other bond measure in California or most other states to date has been to pay for needed infrastructure improvements, such as roads or transportation systems, improvements to the education system, at the university, primary or secondary levels, or to fund other explicitly public projects. Proposition 71, on the other hand, is not a bond measure to fund public infrastructure nor will the money be used in a way that will directly and immediately benefit the general public. Admittedly, the proposition will fund many private rather than public interests, and while the state will gain by increased tax revenue and potentially through shares of royalty payments, the bond measure is undeniably public support for a particular sector of industry. While the electorate may not have realized it throughout the campaign, Proposition 71 represents a new way by which society allocates its resources in the economy– that is, by way of popular vote rather than by market forces.
Certainly, Proposition 71 is not the first time that public funds have been used for research, even research that ultimately benefits the private sector. Indeed, this is certainly a necessary intervention of government into the economy– without public funding for research, it is doubtful that we would enjoy the same level of research that provides substantially for the common good today. Proposition 71 distinguishes itself, however, in the way that it chooses how these funds will be distributed. While an elaborate system of evaluating grants, based on factors including demonstrated expertise, experience, and likelihood of success, has evolved to facilitate the disbursal of federal research funding, Proposition 71 represents a rapid departure from this standard. No longer will grants be evaluated on merit, but rather they must simply pass the litmus test of using stem cells in their experiments. Thus, market forces are eliminated not only in that public funds are used to support a particular sector of industry, but even more, competitive forces that usually optimize the disbursal of public funds are eliminated from the process.
The ultimate effects of Proposition 71 can only be guessed. The funds may radically boost the biotech sector of California’s economy, providing many new jobs and increased state revenues. The newly funded research may even lead quickly to cures from which the state can profit. Perhaps California will be a new mecca for research of all forms. Or perhaps, the $6 billion of taxpayers money will be squandered and the state will find itself under even more crippling debt. Or perhaps the reality will lie somewhere in between. In any case, Proposition 71 is an exciting new phenomenon that deserves to be closely watched, not only by Californians, but by those in states considering their own similar measures and certainly by those in areas where capital and expertise may soon be fleeing to get a share of the goods in California. |
Thus, Proposition 71 is undoubtedly a “big deal.” If not for the unique way of allocating resources just discussed, than certainly for the amount of money being literally dumped into stem cell research. As demonstrated by the graph, which shows both public and private funding for stem cell research, in no year except 2000 over the past 6 years, has funding come anywhere close to the $300 million that will be provided annually by Proposition 71. While the newly created California Institute for Regenerative Medicine will no doubt find ample projects to exhaust the $300 million, it is far from the clear that the Institute will be able to ensure that the money is spent wisely or well.