Bay State's Biomed Pledge; Massachusetts Sees $500M of Debt for R&D
BYLINE: Michelle Kaske
Life science and stem cell research received promising news this week as Massachusetts announced a $1 billion commitment to the industry, $500 million of which will come from bond sales.
The state plans to tap into operating revenues, tax credits, and capital borrowing over the next 10 years to help finance life science research and development. Since 2003, decreased funding for biomedical research through the National Institutes of Health has led to increased funding at the state level. In particular, stem cell research involves scientists taking cells from human embryos that are a few days old and also from fetal tissue to repair damaged or destroyed cells or tissues. This process has raised an ethical debate over the right to use human embryos for medical advancement.
The state is already home to numerous public and private higher educational research facilities, including Harvard University and the University of Massachusetts system, along with biotechnology companies. State officials anticipate that additional investment in the life sciences industry will spark economic growth through business development and increased employment opportunities as well as potentially shed light on diseases like Parkinson's and Alzheimer's, among others.
"There is no place in the world with as much talent in life sciences and biotech as here in Massachusetts," Gov. Deval Patrick said Tuesday at the BIO International Convention in Boston. "Now is the time for us to invest in that talent and bring together the resources of our unparalleled research universities, teaching hospitals, and industry to work towards a common goal -- to grow ideas into products to create cures and jobs."
The $500 million of bond proceeds will go towards the construction of publicly owned facilities at colleges and universities and other locations and would include a centralized stem cell bank that eight Massachusetts hospitals and higher educational institutions have already agreed to participate in.
Officials are in the beginning stages of planning what types of facilities should be constructed and where they should be located. While the state may sell a small portion of bonds during fiscal 2008 to help finance the beginning, planning, and design stages of certain life science facilities, larger capital borrowing may not occur until fiscal 2009, according to Jay Gonzalez, the state's assistant secretary for capital finance. The state anticipates selling, on average, about $50 million of bonds annually for life-science projects.
An additional $250 million will come from future state operating revenues over the next 10 years to help finance research and fellowship grants.
Patrick's preliminary fiscal 2008 budget does not include funding for life science grants, although the Legislature may add those projects to the budget for next year. Gonzalez said the state already has $10 million of life science funds that have yet to be utilized and if a portion of the grant funding is not included in next year's budget, the state will begin financing the program through its operating budget by fiscal 2009, at the latest.
Another $250 million of funds will come from tax credits the state anticipates granting to new life science companies as expected job growth and an overall increase to the state's income-tax base would offset the cost of the tax credit.
Other states have approved capital borrowing for stem cell research. Last year, California authorized $3 billion of bonds for stem cell research and New Jersey approved $270 million in December.
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