State Not Through with Stem Cell Research Center
Posted July 25, 2008

(*Note: We recognize the current investigation into Assemblyman Neil Cohen, but for the purposes of this analysis, we have chosen to focus purely on a legislative initiative.)

Despite voters’ clear rejection of spending $450 million in taxpayer dollars to fund a stem cell research center, it seems one legislator is pushing ahead with efforts to get the center off the ground.

Assemblyman Neil Cohen (D-Union) recently introduced the New Jersey Stem Cell Research Assistance Act (A3131), which would in essence make the state government a broker of private investments to fund stem cell research. According to a press release issued by Assemblyman Cohen, the bill would “provide millions to help jumpstart research opportunities in the Garden State.” Specifically, the bill would create a public-private partnership through which private investors could contribute up to $500 million over five years to the New Jersey Stem Cell Research Assistance Program, which, under the Act, would be created by the New Jersey Economic Development Authority (EDA).  

In terms of the distribution of funds, the release states:

Interested researchers would submit loan applications to EDA, detailing the type of adult or umbilical cord stem cell research to be conducted and the amount of funding requested. EDA would review individual research grant applications, in conjunction with the New Jersey Commission on Science and Technology, and distribute money from the fund on a case-by- case basis, utilizing the same structure that was put in place in preparation for the now-defunct $450 million stem cell research bond act.

To encourage investment, the bill provides tax credits for investors, equal to the amount of their investment, if the loan recipients default on their payments.

Although the release specifies “adult or umbilical cord stem cell research,” according to NJBiz.com, Cohen has indicated “that there could later be funding for embryonic stem cell research.”

Putting aside for just a moment the ethical implications of embryonic stem cell research, however, Assemblyman Cohen’s bill is problematic from a purely legislative standpoint as well. First, by offering tax breaks to investors, Trenton is ceding a source of revenue that, as an editorial in the Asbury Park Press notes, will have to be made up by someone. And as we have seen all too often from past state actions, when Trenton has a bill to foot, it usually ends up squarely at taxpayers’ feet.

Furthermore, as the Press editorial notes, “Tax policy is often structured in such a way as to reward certain behavior and discourage other behavior. But the voters of this state have said they are not interested in funding stem-cell research. If there is promising research in the field, why wouldn’t the private sector take the investment risk?”

This leads to the second problem with Cohen’s legislation: It inserts the government into an enterprise that should be purely private. Indeed, by creating a new program within the EDA and then through that program distributing private funds, Trenton is expanding its bureaucracy at a time when it can hardly afford to do so. Private investment should be purely that: private.

As a Courier-Post editorial notes, “Cohen’s plan would create an unnecessary layer of bureaucracy…. The state doesn’t need to get in the middle and funnel money between investors and researchers.” While the Courier-Post editors support providing a tax credit “as an incentive to underwrite stem cell research,” they hold that removing government from the funding flow chain “would not require an upfront investment by taxpayers, which is something New Jerseyans made clear in November that they oppose.”

We wholeheartedly support both adult and umbilical cord stem cell research, and these have shown great promise in treating numerous conditions. Yet, we oppose Trenton’s efforts to create an additional layer of bureaucracy that we believe in the end will do more to stymie the growth of research than to accelerate it. Bureaucratic application and approval processes invariably yield delays in progress. The Courier-Post is correct: if the research shows promise, the private sector should take the risk.

We urge lawmakers to let private investment remain private and to focus instead on addressing the real budgetary and economic issues facing our state.

 

 

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