For Immediate Release
September 14, 2004

Fiona Hutton
Roger Salazar

New Economic Study Demonstrates Proposition 71 Benefits to State Economy

Investment in Stem Cell Research Could Yield More Than $12 Billion In Returns Through Tax Revenues, Royalty Revenues, and Health Care Cost Savings

(Los Angeles, CA) — A new economic study, co-authored by a nationally-recognized economic research firm, the Analysis Group, and Stanford professor and economist Dr. Laurence Baker, has determined that Proposition 71, the stem cell research bond measure, will generate a total of at least $6.4 to $12.6 billion in state revenues and health care cost savings during the payback period, providing a return on investment of at least 120% to 236%.

Prop 71 will support stem cell research at California hospitals, medical schools and universities, to develop life-saving therapies and cures for diseases that could save the lives of millions of California children and adults. Scientists believe that stem cell research holds the promise to treat a multitude of diseases that include cancer, heart disease, diabetes, Alzheimer’s, Parkinson’s, HIV/AIDS, multiple sclerosis, ALS and spinal cord injuries. These diseases affect 128 million Americans, including a child or adult in nearly half of all California families.

The new economic study estimates that, during the payback period for the measure’s bonds, Prop 71 will provide:

  • Direct income and sales tax revenues of at least $240 million from the initiative’s spending on research and research facilities.
  • Additional income and sales tax revenues of from $2.2 billion to $4.4 billion in private investments and research activity in the California biotechnology industry by making California a world leader in stem cell research.
  • Direct health care cost savings to the State government of at least $3.4 billion to $6.9 billion, based on modest assumptions that the research would reduce state spending by at least 1% to 2% for the care and treatment of patients suffering from six medical conditions that scientists believe could benefit from the development of new stem cell therapies, including stroke, acute myocardial infarction, insulin dependent diabetes, Parkinson’s disease, spinal cord injury, and Alzheimer’s disease.
  • An additional $9.2 to $18.4 billion in health care cost savings for California businesses, citizens and other payers of health care costs.
  • State royalty revenues of from $537 million to $1.1 billion, resulting from the provisions in Proposition 71 that give the state an opportunity to share in royalties resulting from research funded by the initiative.
  • Between 5,000 and 22,000 new jobs on average per year.

The report states, furthermore, that these estimates of the potential fiscal benefits are conservative. “If Proposition 71 leads to major advances in health care treatments,” the researchers concluded, “overall economic benefits to the state could be more than 7 times the cost of the initiative.”

Finally, the study notes that the primary social benefit from Prop 71 is its potential to improve the health and save the lives of millions of Californians who now suffer – or will eventually suffer – from debilitating diseases and injuries that could be treated or cured by stem cell therapies. This social benefit cannot be readily quantified by economic analysis and accordingly has not been included in the study.

The study’s conclusions illustrate why Prop 71 has received strong support from California’s leading business organizations and leaders, including the California Chamber of Commerce, Los Angeles Area Chamber of Commerce, San Jose/Silicon Valley Chamber of Commerce, San Francisco Chamber of Commerce, Valley Industry and Commerce Association, Los Angeles Business Council, Orange County Business Council, United Chambers of Commerce of the San Fernando Valley, Greater Los Angeles African American Chamber of Commerce, Hispanic Chamber of Commerce and the Latin Business Association. Additionally, the state’s top fiscal officers, State Controller Steve Westly and State Treasurer Phil Angelides, have both endorsed the measure, citing its fiscal soundness and potential economic benefits.

Prop 71 has also drawn a broad and diverse coalition of grassroots supporters that also include Nobel Prize-winning scientists and medical experts, more than 100 state and local elected officials, faith-based organizations, families involved in patient advocacy and efforts to cure diseases, and organizations like the Alzheimer’s Association California Council, California Medical Association, American Nurses Association of California, American Diabetes Association, Christopher Reeve Paralysis Foundation, Juvenile Diabetes Research Foundation, Elizabeth Glaser Pediatric AIDS Foundation, Sickle Cell Disease Foundation of California, ALS Therapy Development Foundation, Parkinson’s Action Network, California Congress of Seniors, and the National Coalition for Cancer Research (NCCR). A complete list of endorsing organizations can be found on the campaign’s website,

Prop 71 was developed by a coalition of California families and medical experts determined to close the stem cell research funding gap. Currently, our state has no effective mechanism to fund stem cell research and political roadblocks have severely limited federal funding for some of the most promising types of stem cell research.

More information on Prop 71 and a complete copy of the economic study can be obtained at





Paid for by YES on 71: Coalition for Stem Cell Research and Cures, #1260661
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