As the State of California sinks into a deep economic crisis, California’s Stem Cell Agency is so well-financed that it gave out $19 million dollars last month and is in the process of giving out another $66 million this month. 

David Jensen of the California Stem Cell Report raises the timely question: are California’s priorities in the right place?

Clearly, California voters believed in the value of stem cell research when they voted for Proposition 71, and there is little doubt that stem cell research has the potential to be tremendously beneficial to the state’s biotech community, but did the voters really intend to fund stem cell research with state taxpayer money in lieu of everything else? 

The problem with research, of course, is that it can take years to bear fruit. So, while investing in stem cell research today can easily be viewed as an investment in the future, that future may be years down the road.  Meanwhile, the state is out of money and that reality is having an immediate effect today across the board on a variety of programs as well as the overall operation of the state.  While California can certainly raise taxes, in this economy where so many residents are losing their jobs and their homes, raising taxes is probably not going to fix the states’s economic problems. 

Jensen addresses the situation as follows:

No one – except for those congenitally opposed to hESC work — is contending that all these millions are going to unworthy scientists or to dubious research. But the CIRM giveaways stand in marked contrast to what is happening to the rest of the state in the light of its $40 billion budget crisis. . . .

The disparity raises major public policy issues about the use of ballot initiatives to promote and protect various causes. Should the elderly and poor see their much-needed assistance and medical care cut while cash flows unimpeded, in this case, to researchers, some of whom are already exceedingly well funded?

In my opinion, Jensen’s point is well-taken.  As a transplant from the South–not Southern California, but the "real" South–I have always been uncomfortable with California’s ballot initiatives for the simple reason that I always felt like I was missing some critical information to making a decision: the budget.  I have run my law firm now for five years, and I can assure you that while I made some mistakes early on, I quickly learned that a business owner cannot make any spending decision without carefully reviewing the budget that will finance such spending.  I serve on a nonprofit board of directors, and the same is true in making spending decisions for that organization.

Yet, as a California voter, I am somehow expected to make a decision on a ballot initiative without being able to see the overall financial picture of the state.

Does this really make sense?

In the case at hand, I doubt that the current funding imbalance is going to turn Californians against stem cell research.  By and large, I think people support the research and recognize its potential.  On the other hand, it should make us all stop and think about our state’s priorities in this economic crisis.  Are they invested in the right place?

The California Stem Cell Report reported on a story run in today’s Boston Globe, in which the paper characterized the “$3 billion stem cell research effort in the Golden State” as a “lesson” and a “reality check” for Massachusetts.

According to the Boston Globe:

The slow rate of progress serves as a reality check for Massachusetts and other states that have followed California’s lead by placing big bets on medical research. Texas voters approved a $3 billion commitment to cancer research in November. New York has set aside $600 million for stem cell work. And later this month, Massachusetts lawmakers are expected to vote on Governor Deval Patrick’s $1 billion life sciences initiative, which is primarily targeted for research.

The Boston Globe next compares and contrasts the proposed Massachusetts bill with the California initiative:

Patrick’s proposal differs in some key ways from California’s. For instance, it sets aside $250 million in tax incentives to encourage companies to expand, something that could yield immediate results. It also allocates money for workforce training. And unlike California, the Massachusetts research funding is not restricted to stem cell research. . . .

[A]s in other states, the bulk of the bill is related to life sciences research, which typically takes time to generate results. Specifically, $250 million is reserved for grants for research, fellowships, or workforce training. Another $500 million would support public research and education facilities, including a stem cell bank to be housed at the University of Massachusetts Medical School in Worcester and a research center focused on RNA interference, an area pioneered by UMass researcher Craig Mello.

Unlike the Massachusetts proposal, California’s stem cell plan didn’t come from politicians. It was the brainchild of Robert Klein, a well-connected California lawyer and low-income housing developer. Klein said he got involved as a patient advocate: His son has diabetes, and his mother has Alzheimer’s disease. When federal officials decided to limit funding for embryonic research, Klein thought California could help fill the gap. Embryonic stem cell research holds immense promise because stem cells can potentially morph into any other kind of cell, making it possible for them to replace other cells that have been damaged.  Instead of going through the Legislature, Klein organized a ballot initiative, taking the proposal directly to voters. . . .  In the end, 59 percent of voters approved the measure.

The Boston Globe article goes on to describe the controversies surrounding the California initiative and to explain that the the initiative to date has had little–if any–real impact.

The California Stem Cell Report responded to the Boston Globe article, stating:

The Boston piece downplayed the impact of CIRM’s efforts, perhaps a reflection of a parochial East Coast perspective. Pumping money into stem cell research at the rate of $20,000-plus an hour, however, is no small achievement, even though it does not measure up to the perceptions created by the campaign rhetoric surrounding Prop. 71 more than three years ago.

There is little doubt that the Boston Globe’s perspective is a cautionary one on the value of investing public funds into stem cell research.  At the very least the Boston Globe has emphasized the fact that the value of the investment will be realized in the long-term rather than the short-term, which is certainly a fair point to make.  At worst, the Boston Globe may in fact be as the California Stem Cell Report stated exhibiting a certain degree of  “East Coast parochialism.”

In truth, I think that this article is a reflection of all of the above.  As a relocated Southerner from the real South–not Southern California–I have to say that it was no great surprise that California would be the pioneer in this area.  Not only is the state very progressive in a variety of ways and historically very supportive of life sciences, but it is also more inclined than many states to allocate taxpayer dollars to fund politically-correct projects.  Is this at heart a reflection of the fundamental difference between East Coast and West Coast perspectives?  Of course it is.  But which view is correct?  It depends.  Utlimately, isn’t the measure of success going to be what the CIRM does for California and what kind of results in the field the CIRM achieves? Thus, I would argue that everyone is correct here.

Having said this, did anyone honestly think that the CIRM would have achieved any tangible results by now? Does anyone really need cautionary words of wisdom on how rapidly stem cell  research results are likely to be achieved?  I suspect that even most elementary school students would have expected it to take a while for the CIRM to achieve any measurable results.  Is it possible that the Boston Globe is truly concerned that its readers will get ahead of themselves, expecting the results to be literally evident overnight?  I somehow doubt it.

California Stem Cell Report provided more enlightening coverage today on how funds are being disbursed at the California Stem Cell Agency.

California Stem Cell Report reported as follows:

About ninety percent of the $209 million handed out so far by the California stem cell agency has gone to institutions that have “representatives” on the board that approves the funding. . . .

The group that approves the money is the 29-member Oversight Committee. Fourteen members of that committee have close links to the institutions that have received about $190 million in grants.

None of this is illegal but it illuminates the nature of the built-in conflicts of interest on the board. Prop. 71 created the situation. Nearly all the institutions in California that could be suitable recipients of stem cell research have some sort of representation on the decision-making board. The measure spelled out, for example, that five executive officers from University of California medical schools have seats on the board. It also stipulated that four executive officers from California research institutions sit on the Oversight Committee. . . .

Isn’t it comforting to know that millions of California’s taxpayer dollars have been entrusted to an entity, which is plagued by so many conflicts of interests?   Did voters unknowingly create just another bloated bureaucracy when they voted in favor of Proposition 71?  It is difficult not to think that this is exactly what has happened when you read these reports.