Stem Cell Research Bonds

Prop 14 issues $5.5 billion in general obligation bonds to continue funding the California Institute of Regenerative Medicine (CIRM), which conducts stem cell research. Combined with $2.3 billion in interest, the bond will cost the state $260 million per year from its General Fund for the next 30 years.

I wasn’t planning on voting for Prop 14. State general obligation bonds are effectively budget set-asides, tying the hands of the legislature in normal budgeting processes. They limit our ability to respond to changing conditions, such as the Covid-19 emergency. Unlike local general obligation bonds, which are repaid in property taxes, state bonds don’t raise any tax revenue. That means each dollar that pays for debt repayments is a dollar that can’t fund other General Fund programs, 80 percent of which makes Californians healthier, more educated, and less poor.

I was persuaded to change my vote by Alexander Berger, Managing Director of the Open Philanthropy Project (“Open Phil”), one of the most prominent and, in my opinion, credible effective altruism philanthropic organizations. Open Phil is the sister organization to GiveWell, which identifies cost-effective charities for saving lives, like malaria bed nets, guiding the vast majority of my personal giving. Berger wrote about Open Phil’s science team finding that CIRM’s grants are “as good or better than average funding from the NIH” and how this basic research is a highly cost-effective global public good. Ideally, the legislature would budget for such a beneficial program, but Berger predicted that CIRM would be “dead or massively shrunk if 14 fails.” This led Open Phil to contribute $580,000 to get Prop 14 on the ballot.

Stem cell research is already bearing fruit in helping to develop potential Covid-19 vaccines and treatments, and has a bright future in developing new therapies. California’s interest rate on bonds is below inflation, and Prop 14 locks in research budgets to help CIRM focus on long-term basic research that benefits the planet. I trust Berger and Open Phil to make the right decision here, so despite my reservations about good governance, I’m voting to continue this funding stream.

(I’m also voting for Propositions 15 and 19 which directly increase tax revenue, for Prop 22 which indirectly increases revenue, and against Propositions 21 and 23 which indirectly reduce net tax revenue, so that we can fund more programs like this without a zero-sum approach.)