With ballots out and too many things on everyone’s ballot, many voters will be relying on voting guides put out by newspapers, political parties, pundits, friends, and so on to use as cheat sheets. (Obviously, you should be consulting the guides put together by the editorial boards of the Southern California News Group and the San Diego Union-Tribune, since we surveyed and interviewed hundreds of candidates and ballot measure supporters and opponents.)
In right-wing circles, one of the more popular voter guides is from Reform California, the group run by San Diego Assemblyman Carl DeMaio. None of the endorsements from Reform California are ever really surprising — it’s usually “Whoever is a Republican and/or most aligned with Carl DeMaio.”
Likewise, on state ballot measures, the DeMaio list looks a lot like the one from the Southern California News Group editorial board. Opposition to Proposition 3 and 40, because they’re taxes, support for Propositions 41 and 42 because they’ll block the wealth tax, opposition to two big bond measures (Propositions 1 and 37).
Then there’s the bizarre exception: Proposition 38, an $8.4 billion bond measure which the left-leaning San Francisco Chronicle described as “one of the most noxious deposits on California’s political dung heap in years.”
“This one is not a taxpayer-backed bond, it is a public-private partnership,” DeMaio explained to his followers.
The problem for that assertion is that it is indeed a taxpayer-backed bond.
As the nonpartisan Legislative Analyst’s Office notes, “The state General Fund cost to repay the bond would be $500 million to $600 million annually for about 20 years. The annual cost would be about one-quarter of 1 percent (0.25 percent) of the state’s total General Fund budget. Since the state has to pay interest on the money it borrows, the total cost of the bond would be about 10 percent more (after adjusting for inflation) than if the state paid up-front with money it already has.”
DeMaio counters that his group backs Prop. 38 “mainly because we see the bond as different from typical government borrowing,” because of a provision requiring “10 percent of all proceeds from the immunotherapies developed as a result of this act go to the state to offset the costs of this act.”
Where have we heard this before? Oh, right, the 2004 stem cell bond under Proposition 71, which likewise vowed to use the proceeds of the breakthrough treatments it would come up with to help pay the $3 billion bond. How did that go?
In 2020, the stem cell research backers came back to top off that 2004 investment with a new $5.5 billion ballot measure. At the time, the LAO noted that, far from the windfall of revenue supporters expected, “these inventions have provided a total of approximately $350,000 to the state.” No, I’m not missing any zeroes. $350,000. Two years later, the California Institute for Regenerative Medicine received $15.6 million in royalties. Still a drop in the bucket for a combined $8.5 billion in bonds, plus interest.
Prop. 38 asks voters to make that same bad bet — and in an even shadier way.
While the measure calls for half the money to be handed out to researchers across the state, the other half would go toward a research institute that isn’t named but narrowly defined by the language of Prop. 38 itself down to square footage so the only place it could be is the California Institute for Immunology and Immunotherapy. Which, surprise, happens to be backed by Proposition 38’s chief backer, billionaire Gary K. Michelson.
To make matters worse, as the San Francisco Chronicle editorial board notes, the “California Institute for Immunology & Immunotherapy literally has no track record of developing, funding or bringing medical research to market. It isn’t even fully built.”
If that’s Carl DeMaio’s idea of a public-private partnership, then, yikes. It sounds either like a half-baked cynical money grab or boondoggle in the making.
As Robert Kaplan, a senior scholar at the Stanford University School of Medicine and a distinguished research professor at UCLA, warned in these pages recently, the promise of repayment based on potential breakthroughs is one voters should be skeptical about given the nature of the bond and the nature of biomedical research.
“That warning is not pessimism,” he wrote. “It reflects how biomedical research works. Drug development is long and failure-prone. An often-cited National Institutes of Health estimate found that only 1 of every 10,000 promising compounds from early-stage research becomes a new drug; at least 90% of drugs entering preclinical studies fail. Immunotherapy has produced remarkable advances, but it is not exempt from these odds.”
Finally, DeMaio has uncritically parroted the promise by proponents that “every drug or treatment developed with the funding must be sold in California at 20% below the national average price.” Kaplan, in the official argument against the measure, points out the obvious hole in that claim: “While this may sound attractive, it could incentivize companies to prioritize selling these products in other states where the prices are not controlled.”
Taken together, it’s truly bizarre that a conservative group would lend its support to such a flawed, dishonest and expensive measure. For conservative voters wanting to do the right thing and oppose wasteful spending, always read the fine print of any measure or any voter guide.
Sal Rodriguez can be reached at salrodriguez@scng.com