Prop 38: Immunology Medical Research Bonds

What it does

Authorizes $8.4 billion in state general obligation bonds for immunology and immunotherapy research. Funding is split equally between:

• A University of California-affiliated nonprofit medical research institute selected by the California Department of Public Health
• A grant program for public or nonprofit universities and institutions

At least half of the research money must go toward cancer, heart disease, and Alzheimer's disease. Recipients must sell any resulting drugs or technology in California at 20% below the national average price for 20 years.

Who pays the bonds?

Unlike Prop 37's revenue bonds, these are general obligation bonds. The state borrows the money and repays it with interest from the General Fund — California's main operating account funded by income tax, sales tax, and corporate tax revenues. The Legislative Analyst estimates debt service at roughly $500 million to $600 million per year for about 20 years.

The measure says some or all of that cost could be offset if the funded research generates revenue, but that is uncertain.

Supporters say

• Supports life-saving immunology and immunotherapy research
• Targets cancer, heart disease, and Alzheimer's
• Requires 20% drug discount in California
• Could generate revenue and health savings over time

Opponents say

• Commits taxpayers to decades of bond debt
• Research funding should go through the normal budget process, not ballot-box borrowing
• Directs half the money to a single selected institute rather than a competitive process
• No guarantee the research will produce revenue to offset costs