Borrowing Costs
Proposition 71 provides that no General Fund payments for the bonds will occur in the first five years. State costs after the first five years will be dependent of the interest rates obtained when the bonds are sold and the length of time it takes to repay the debt.
Institute Operating Costs
Proposition 71 limits the amount of funding that the institute can use for its administrative activities.
Loan Repayment Revenues
If the California Institute for Regenerative Medicine issues loans in addition to grants for research and research facilities, it will eventually receive revenues from the repayment of those loans. Any loan repayment revenues will be used either to provide additional grants and loans or to pay ongoing costs for the administration of the bonds.
State Revenues from Research
Proposition 71 will allow the state of California to receive payments from patents, royalties, and licenses that result from the research. The exact amount of these revenues is unknown but will depend on the nature of the research funded by the institute and the exact terms of any agreements for sharing revenues that result from the research.
Effects on University System
The University of California system may receive a share of the grants awarded by the California Institute for Regenerative Medicine. This could potentially draw more federal or private research funding for stem cell research. Like the state of California, the University of California system may also receive significant revenues from patents, royalties, and licenses.
Other Potential Fiscal Effects
If economic and other unexpected benefits result from Proposition 71, then there may be a production of unknown state and local revenue gains and cost savings.

Possible Financial Disadvantages of Proposition 71 include:

• Further deterioration of credit rating of the state of California, which will raise interest costs on future borrowing
• Higher taxes to pay off the bonds
• Suppression of economic activity because of higher taxes
• Diversion of funds from other projects
• Total payback cost of about 5.4 billion dollars
• Percentage of sales revenue would have to be shared in patents and licenses for developing products
• Costs of obtaining eggs to be used in research
  

Possible Financial Advantages of Proposition 71 include:

• Secondary effect of boosting the economy of the state of California
• New innovative companies
• Creation of thousands of new jobs

For the executive summary of a study on the economic impact of Proposition 71, commissioned by its proponents, click here.

For a reubttal to this study issued by the opponents, click here.