CGS-authored
SAN FRANCISCO - During the campaign for California's $3 billion stem cell initiative, supporters predicted as much as $1 billion would be returned to state coffers through royalties from stem cell therapies.
But now, some question whether the state will get a dime.
Federal tax laws may prevent California from requiring companies to share royalties if the state issues tax-exempt bonds to finance the program, experts testified Monday.
That leaves stem cell leaders in a quandary: Do they issue taxable bonds -- at an added cost to taxpayers of $420 million to $700 million because of higher interest rates -- in exchange for negotiated agreements on royalties that may or may not materialize?
Or do they abandon the royalties idea and risk alienating voters? Is there a third possibility -- some other way to ensure Californians reap benefits from their huge investment, maybe by getting reduced prices on treatments for low-income Californians?
"This really is, fundamentally, a debate around the accountability to taxpayers," said Jean Ross, executive director of the California Budget Project.
Taxpayers should not be asked to pay...
But now, some question whether the state will get a dime.
Federal tax laws may prevent California from requiring companies to share royalties if the state issues tax-exempt bonds to finance the program, experts testified Monday.
That leaves stem cell leaders in a quandary: Do they issue taxable bonds -- at an added cost to taxpayers of $420 million to $700 million because of higher interest rates -- in exchange for negotiated agreements on royalties that may or may not materialize?
Or do they abandon the royalties idea and risk alienating voters? Is there a third possibility -- some other way to ensure Californians reap benefits from their huge investment, maybe by getting reduced prices on treatments for low-income Californians?
"This really is, fundamentally, a debate around the accountability to taxpayers," said Jean Ross, executive director of the California Budget Project.
Taxpayers should not be asked to pay...