Sunday, January 13, 2019

Is the Governor of California a $5 Billion Stem Cell Friend?

Then San Francisco Mayor Gavin Newsom
 at 2005 announcement of stem cell HQ 

California's newly installed governor, Democrat Gavin Newsom, is no doubt a friend of the state's 14-year-old stem cell research program. 

But is he a $5 billion friend?

The question arises because the stem cell agency expects that its funds for new awards will dry up by the end of this year. It is pinning its hopes for survival on a proposed, $5 billion bond measure that may be placed on the November 2020 ballot. And the agency will need all the support it can muster to convince California voters to approve such a measure. 

Newsom's ties to the agency go back more than a decade. As then mayor of San Francisco, he was a key backer of the city's successful effort to lure the agency's headquarters, and he conjured up a $17 million package of incentives. 

He said at the time that the decision to locate the headquarters in San Francisco was a "proud moment." He said the incentive package demonstrated the "city’s unwavering commitment to innovation as scientists search for new methods to treat the world’s most challenging diseases and injuries."

(See here and here for more on Newsom and the selection of San Francisco as the agency headquarters.)

The agency is now based in Oakland. The free rent deal in Newsom's package expired, and San Francisco was too expensive for the California Institute for Regenerative Medicine (CIRM), as the agency is formally known. 

Newsom was busy last week with non-stem cell matters, such as a $209 billion budget he laid out for lawmakers. Given the nature of his and state priorities, he is unlikely to weigh in soon on a tentative ballot measure that is two years in the future. 

Newsom has sounded cautionary financial notes as he proposes ambitious spending plans. Some news stories have highlighted his willingness to pay down the state's debt, which figures into how the stem cell agency operates. 

In 2004, voters created the agency and also approved $3 billion for research awards. Those billions came from debt (bonds) taken out by the state. It is the first instance of a state funding scientific research with borrowed money. 

The interest on the bonds roughly doubles the cost of the agency, meaning a $10 million research grant really costs the people of California $20 million. 

Today, California is flush with cash because of a solid economy and a rainy day fund created by former Gov. Jerry Brown, also a Democrat. Some financial experts and economists are warning, however, that the good times will not be so good in 2020. That could color how voters perceive spending more on stem cell research.

Newsom may also have other, competing spending priorities come November 2020. He may want to husband his political capital to assure their approval. It is exceedingly unlikely, however, that he would oppose a new stem cell bond measure. But he could sit out a campaign for more billions for the agency. 

Given that possibility, maintaining a warm relationship with Newsom likely stands as an important priority for the agency and its backers -- one that they undoubtedly hope demonstrates both the value of stem cell research and the value it brings to the Newsom administration.

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