California's 16-year-old stem cell research program is a prodigious enterprise that is helping to finance 68 clinical trials and that has funded hundreds of California scientists for their work in an embryonic field, so to speak.
The scope and importance of the program and its cost, however, are not necessarily apparent to most Californians. The program is not high on the radar of most people and certainly not the subject of breakfast table conversations in the overwhelming majority of the state's households.
Over the past 16 years, the California Stem Cell Report has regularly described the stem cell agency, known officially as the California Institute for Regenerative Medicine (CIRM), as a $3 billion effort. But the use of that number did not make it clear that the cost ran significantly higher.
When CIRM was created through a ballot initiative in 2004, the state Legislative Analyst estimated it could cost taxpayers $6 billion because of the interest on the money that the state borrowed to finance it. The figure has turned out to be closer to $4 billion because of unusually low-interest rates over the last decade or so.
Under Proposition 14, the agency will receive an additional $5.5 billion from state bonds to spend on research and other new programs. The state legislative analyst has estimated the total cost will run about $7.8 billion because of -- once again -- interest costs.
The Proposition 14 funding brings the total estimated cost of CIRM to nearly $12 billion. And that is the figure that the California Stem Cell Report will use going forward to describe the program, unless someone can convince this writer otherwise.
Referring to CIRM as a $12 billion enterprise immediately tells the reader that it is a significant effort. The number helps to draw readers into stories about CIRM. It is also more accurate than using a smaller figure, which would tend to minimize the cost and mislead taxpayers. Describing CIRM only as a $8.5 billion ($3 billion plus $5.5 billion) agency tends to conceal its true cost to the people of California. (In retrospect, this website should have used the 2004, $6 billion figure to describe CIRM over the last 16 years.)
CIRM is a rare bird among state agencies for a number of reasons. In this case, we know that its funding will cease at some point. Nearly all state departments do not live with that sort of financial guillotine.
The 17,000-word ballot initiative, crafted by Robert Klein, a Palo Alto real estate developer, limits CIRM's annual CIRM bond sales to $540 million. Based on the experience under the previous initiative -- Proposition 71 of 2004, which created CIRM -- the agency is not likely to hit the $540 million cap each year. That could extend CIRM's possible life for another 15 years or so unless it becomes unusually tight-fisted.
As for the $12 billion figure, this writer is open to arguments for using another number, but I will have to be convinced. I am prepared to air those arguments (their full text) on this website. So if a reader thinks another figure is more appropriate, please let me know the reasons why either by filing a comment using the comment function at the end of this item or by sending me an email at djensen@californiastemcellreport.com.
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