Come November, California might become the first state to fund stem cell research, in direct opposition to the federal government's policy. If voted in, Proposition 71 would allow the state to issue bonds for up to $3 billion over ten years for the research. But given the state's $10 billion deficit, some groups are questioning whether the proposal is financially sound.

Dismayed by the restrictive federal policy, researchers Irving Weissman and Lawrence Goldstein, Hollywood producer Jerry Zucker and real estate developer Robert Klein conceived the proposal in 2003. Klein and Zucker both have children with diabetes—a leading candidate for stem cell therapies.

By mid-August 2004, the campaign had garnered widespread publicity and about $5.3 million. The goal is to raise $20 million by November. The project could be just what the doctor ordered for the state's ailing high-tech industry, says Jim Cunneen, president of the Silicon Valley Chamber of Commerce. Apart from researchers—and, presumably, patients—the initiative could indirectly benefit venture capitalists, biotechnology companies and real estate developers.

But the project's hefty price tag has provoked some groups—such as Doctors, Patients and Taxpayers for Fiscal Responsibility—to call it “ill-conceived.” Although the proposal is structured to postpone draining tax revenue, repaying the bond is expected to cost $6 billion over 30 years.

Opponents argue that much of the money would line the pockets of California's real estate developers. Up to 10% of the $3 billion pie would go to building new research centers. But if the federal government limits stem cell research in buildings funded with federal grants, scientists will need independent labs, says Zena Werb, a researcher at the University of California in San Francisco. “It costs over $100 million to build a single research building,” Werb says. “That's one of the reasons that the bond calls for so much money.”

Another 3% of the funds would create the California Institute for Regenerative Medicine, which will administer independent audits, public hearings and annual reports. Funds would be monitored by a public committee and a board of directors including scientific experts, patient groups and California businesses. Evaluation of grant applications would be modeled after the NIH's system, says Goldstein.

The bond's size would give researchers a stable framework unaffected by politics or the economy, Goldstein says. “We can't work in this political environment,” he says. “Scientists need to know that they can start a long-term research project without having to worry about the next election.” The stability would help encourage young investigators to enter the field, he adds. California might also benefit from royalties on research discoveries, and potential cures could cut its healthcare costs, which at $110 billion are the nation's highest.

Scientists need to know they can start a long-term research project without having to worry about the next election. Lawrence Goldstein, University of California San Diego

Asked whether the funds might not instead go to California's struggling school system or other problems, Goldstein says, “Sure, there are lots of other things that the state could do with the money, but it's not as though there are five other proposals put forward with credible plans ... We have an actual plan.”