Monday, December 22, 2008

CIRM Clarifies Its Financial Status: Grant Money Could Run Out by June

How long can CIRM continue to operate at full strength given the current state of California's fiscal crisis?

According to CIRM, the agency can cover its "grant commitments" through the end of next July and perhaps longer. After that, the agency will have only enough money to monitor existing grants and perform other "office operations" for another 12 months.

The response came from Don Gibbons, chief communications officer for CIRM. We asked him to clarify apparent discrepancies in CIRM's financial status that were posed in the item below.

The matter is of some import since the state of California has suspended the issuance of state bonds because of the budget stalemate in Sacramento. Bonds constitute virtually the only source of funding for CIRM.

However, we think it is highly unlikely that bond sales will be suspended for the next six months. The state's budget problems should not be minimized, but a solution is almost certain to be found before June. If not, CIRM funding will be among the least of the worries in California.

More to the point is the fact that CIRM enjoys a favored financial position while the rest of state government is struggling. That situation poses PR and policy problems for CIRM that we have discussed previously.

For the record, here is Gibbons' response to questions about CIRM's financial status. They involved the $168.9 million CIRM budget figure in a San Francisco Business Times article and a $160 million figure given to us by Robert Klein, chairman of the stem cell agency. They also involved Gibbons' statement in the Times article that said CIRM had enough to fund office operations until July 2010. Gibbons replied:
"Both are correct. We have enough to cover grant commitments at least through July 2009, but will still have enough in reserve to fund 'office operations' for another year so that we can continue to monitor existing grants, manage the standards review processes, etc."
Gibbons did not respond to our question concerning CIRM's reaction to the governor's request for a 10 percent payroll reduction and mandatory furloughs that amount to a 9 percent salary cut.

(Editor's note: In an earlier version of this item, the second paragraph incorrectly reported that CIRM said its grant money would run out at the end of next June. The next to the last paragraph has also been rewritten to clarify that there were two elements in the question placed to Gibbons.)

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