California Can Cure Cancer…With Enough of Your Tax Dollars!

Healthcare is one of the most convoluted and confusing topics – especially when it comes to government programs and intervention in medical institutions. Yet, healthcare is the single largest category of spending in the U.S. federal budget,[1] and here in California it is our second largest expenditure from the General Fund.[2] If both our federal and state governments are using the largest share of our tax dollars toward healthcare, then it is critically important that we, as voters, understand any proposals being put in front of us that contribute to that spending.

This November, we have two propositions on our ballot that take very different approaches to different issues in healthcare. Both propositions are built around goals that sound appealing – advancing medical research and making sure more money reaches patients. Who doesn't want better medical treatments? Who doesn't want more money going directly toward patient care? But as we've seen with so many California ballot propositions, the question isn't simply whether the goal is good, but whether the policy being proposed is actually the best way to achieve it.

Proposition 38 – Details

These propositions have a lot of components to them and are a bit complex to break down, so let’s dive right in – starting with Proposition 38.

Proposition 38 centers around funding medical research in the fields of immunology and immunotherapy. Immunology is the study of the immune system (as it sounds in the name), and immunotherapy involves developing treatments that help the immune system fight diseases more effectively, most notably cancer.[3]

What Proposition 38 would do is allow California to issue an $8.4 billion general obligation bond to fund this type of research. At least $4.2 billion of the funds would be used for immunology research on cancer, heart disease, and Alzheimer’s disease. The California Department of Public Health would select a research institute – that meets qualifying criteria outlined in the text of the proposal – to receive the $4.2 billion. In return, the selected institute would be required to publish an annual, public report on its activities and be subject to an independent financial audit.[4]

The remaining half of the funds would be awarded among several different institutions as competitive research grants focused on immunology and immunotherapy. These would be decided by a council consisting of representatives from universities and nonprofit research institutions in California.

In terms of cost, this would add $500 to $600 million in expenses annually to the General Fund for 20 years to repay the bond. But there is an avenue to potentially recoup some, or all, of this cost written into the proposition. Ten percent of any revenue generated from research funded by the bond must be given to the state. That revenue would first go into the General Fund until the state has recovered the cost of the bond, including interest. Any additional revenue would then be used for future immunology and immunotherapy research.[5]

So, in summary, Proposition 38 would authorize California to borrow $8.4 billion to fund immunology and immunotherapy research, with roughly half going to a qualifying research institute and the remaining funds distributed through competitive grants.

Proposition 38 – Analysis

So, what are we to think about this? Medical research is obviously valuable. I think developing better treatments for cancer, Alzheimer's, and heart disease is something virtually everyone can support. 

But this is where we need to make an important distinction. Because the question we ought to be asking is not whether medical research is good. We all can agree it is! The question instead is whether California taxpayers should be borrowing $8.4 billion to fund this particular research program, and whether this proposition is structured in the best interests of California taxpayers. To answer that, I have four main concerns to pose, which I believe will help us reach a firm conclusion.

Concern #1: Why does California need to fund this?

My first concern is about necessity. Why does California need to create an entirely new $8.4 billion debt-funded program for medical research – when California's universities, the federal government, pharmaceutical companies, nonprofits and private philanthropists already fund enormous amounts of medical research? Put another way, what gap is Proposition 38 filling?

Medical research is already funded through a wide variety of sources. The federal government, particularly through the National Institutes of Health, is one of the largest funders of medical research in the country.[6] Universities conduct research through federal grants, institutional funding, donations and endowments. Pharmaceutical and biotechnology companies fund research and clinical trials, while nonprofits and private philanthropists contribute billions of dollars toward specific diseases and research initiatives.

California especially is not starting from scratch here. We already have some of the world's leading medical research institutions right here in our state, including our public universities. So, before we ask California taxpayers to take on another $8.4 billion in debt, I think we should be able to answer a pretty basic question: what is currently not being funded that Proposition 38 needs to fund? “Medical research needs money” isn't, by itself, an argument for this particular $8.4 billion program. 

Remember, our state is in consistent budget deficits. What does that mean? That means we need to find areas to cut spending. Cutting down spending is never easy, because every single program or cause can make an argument for why it should be funded – but part of running an effective and efficient government is making hard decisions on what is included in the scope of governing the people prudently. California needs to reduce its government size and budget, not continue expanding it. If it isn’t vitally, critically necessary to maintaining society and carrying out the primary purposes of government, then we should not be spending taxpayer dollars on it. 

Concern #2: Why take on more debt?

My second concern is about the way California would go about providing this funding. In other words, even if you believe California should invest more heavily in medical research, why should we borrow $8.4 billion to do it? This isn't money California already has sitting in a medical research account. Proposition 38 would authorize the state to issue general obligation bonds, meaning California would take on additional debt and repay that debt through the General Fund over approximately 20 years. Is this the highest and best use of $500–$600 million a year for the next 20 years?

Someone could reasonably point out that $500 million to $600 million is a relatively small percentage of California's enormous General Fund budget annually. And that's true, but a small percentage doesn't mean it's free. Going back to what I just mentioned on reducing spending – every dollar adds up. You do this with your own personal spending! If your budget is out of control, and you are spending more than your income consistently, the first thing you do is find places to cut spending. If you make the excuse that “this is just $20” or “$15 isn’t a significant amount of my income,” then you will continue to overspend, because it all adds up. The same is true here.

Every year for approximately 20 years, California would have an additional $500 million to $600 million obligation that has to be paid before that money can be used for anything else. California clearly has no shortage of demands on the General Fund. We have public education, Medi-Cal, public safety, homelessness, infrastructure, wildfire prevention, and countless other programs competing for state dollars. If we're going to borrow more money for something as uncertain as scientific research, taxpayers deserve a particularly strong justification for why debt is the appropriate way to do it – and we have not been given that compelling of an argument.

Concern #3: Why THIS research?

My third concern is about the prioritization of one type of research over another. Even if we accept that California should spend more money on medical research, Proposition 38 isn't a general medical research fund – it specifically prioritizes immunology and immunotherapy. Should government be the one deciding which area of science deserves billions of dollars of taxpayer investment?

Again, there is a perfectly reasonable argument for doing this. Supporters believe immunology and immunotherapy could produce major breakthroughs in the treatment of cancer, Alzheimer's, heart disease and other diseases. If researchers are on the verge of breakthroughs in these areas, investing more money could potentially save lives and improve the quality of life for millions of people. That would be amazing! I definitely want us to make advances in treating these life-altering and deadly diseases.

But scientific breakthroughs are difficult to predict. Under Proposition 38, the government must decide today that immunology and immunotherapy are where California should put $8.4 billion for years to come. But what if the most significant medical breakthrough of the next 20 years comes from something else entirely? What happens when there is a treatment that we haven't even thought of yet that needs funding as well?

This is where competitive research funding can be much more valuable. Rather than having our government decide in advance which scientific field deserves billions of dollars – which, again, is NOT a primary purpose of government – researchers should compete for funding based on the quality and potential of their work, and most of the time that is how funding is obtained.

Government doesn't necessarily know today which scientific field will produce tomorrow's breakthrough. So, I'm not arguing that immunology and immunotherapy aren't worthy areas of research, they absolutely are. But I am questioning whether California taxpayers should be locked into one particular scientific approach at this scale for decades. 

Concern #4: Who gets the money?

My fourth and final concern is about the structure of the proposition itself – specifically, who is actually positioned to receive the bulk of this funding. Remember, Proposition 38 doesn't simply take $8.4 billion and make it available to medical researchers across California. Roughly half of the funding is designated for a single qualifying research institute, while the remaining funds are distributed through competitive grants.

So, I started looking at the eligibility requirements for that designated institute. According to reporting from CalMatters, those criteria appear to closely match only one existing organization: the California Institute for Immunology and Immunotherapy, a UCLA-affiliated nonprofit.[7] Sarah Hill, a Professor of Political Science at CSU Fullerton, affirmed the criteria were “very clearly designed to support a specific nonprofit,”[8] saying the numbers cited for how many inpatient admissions, square feet of research space, dollars raised in philanthropic support, and monetary commitments for designated research programs are required for this designated institute are oddly specific.[9] She believes that the structure is unfair, but voters may pass the proposition because they will not scrutinize the structure to realize it, and because medical research into diseases like cancer is a popular and sympathetic cause.[10]

But this detail matters – and it should matter to our decision on how to vote on Proposition 38. If the proposition is written to benefit one specific institution, it is no longer a statewide investment in medical research – it is instead a proposition written to direct $4.2 billion in taxpayer funding to one specific organization that already receives funding from numerous sources. CIII is not some completely unfunded research organization waiting for California to rescue it, it has already received substantial private philanthropic support! 

This is essentially the concern raised by Dr. Robert Kaplan, a former associate director of the National Institutes of Health and senior scholar at Stanford's School of Medicine. He said, “worthy science does not justify an insider arrangement written in the shadows. Californians deserve open competition, genuine public accountability and a clear explanation of where their money is going.”[11] He is advocating for the idea that medical research grants should be awarded through a competitive process that gives researchers an equal opportunity to compete, rather than directing half of the state's funding to one institution through specially tailored eligibility requirements.

And in case there is any doubt about if this proposition is really only written for the benefit of CIII – or whether it’s just a coincidence – the top donor to the proposition is Gary K. Michelson, who has contributed a whopping $8.2 million.[12] Michelson is also the co-founder and chairman of the Board of, you guessed it!, CIII (California Institute for Immunology and Immunotherapy). Coincidence?? I think not.

So, to wrap this up, I don't oppose funding medical research. What I do oppose is asking California taxpayers to take on $8.4 billion in debt for a program that has not adequately demonstrated why this money is necessary, why this particular field should receive this level of government investment, and why half of the funding should be structured around criteria that appear to benefit one specific institution, whose co-founder is the top donor to the cause. 

If California wants to invest in medical research, there are better ways to do it – fund research through existing competitive programs, leverage private and federal dollars, and allow researchers to compete based on the quality of their science.

Proposition 44 – Details & Analysis

All of that was just on Proposition 38, so we need to fly through Proposition 44! This proposition is entirely different, although it still relates to the healthcare field. 

The goal of Proposition 44 is to ensure that certain nonprofit clinics are actually spending the majority of their revenue on the healthcare services they provide, rather than on other expenses. Specifically, it would require private nonprofit safety-net clinics to spend at least 90 percent of their total revenue each year on program services – meaning the healthcare services that advance their charitable purpose. The remaining 10 percent could be spent on other expenses, including administrative costs. If a clinic fails to meet the 90 percent requirement, it would be required to pay the state a penalty equal to the amount it fell short of that threshold.[13]

As quick context, a safety net clinic is a healthcare provider that serves people who may have difficulty accessing care elsewhere, particularly low-income, uninsured, or medically underserved patients. These clinics often provide primary and preventive care, regardless of a patient's ability to pay, and many receive government funding to help provide those services.[14] According to the LAO, these clinics are already spending a significant portion of their revenue on the healthcare services they provide – 80% on average.[15] Proposition 44 would raise that minimum to 90 percent.

This, again, sounds reasonable on the surface, right? If a nonprofit clinic exists to provide healthcare to underserved communities, shouldn't most of the money it receives actually go toward providing that care? But as always, we need to look beyond the appealing goal and ask whether the policy actually accomplishes what it promises.

First, I completely agree with the problem this proposition is trying to address. We have seen real and significant examples of fraud, waste, and abuse of funds involving nonprofit organizations, including organizations that receive government funding. This should be taken extremely seriously when taxpayer dollars are involved. I personally have called from greater accountability and transparency to organizations receiving public funding!

Nonprofit status should not, by any means, be a shield from scrutiny. If an organization receives taxpayer dollars, charitable donations, or tax benefits because it claims to serve the public, then there should be transparency about where that money is going and meaningful consequences when that money is misused. So, I have no problem with the premise that nonprofit healthcare organizations should be held accountable.

But that brings me to my main question: does Proposition 44 create accountability, or does it put a new metric in place that is easy to measure but doesn’t actually address root problems? 

Spending 90 percent of your money on “healthcare services” does not necessarily mean that you're running an effective, responsible organization. The term itself is vague and broadly defined – the proposition gives the California Attorney General authority to define in more detail which expenses count as “health care services” and which count as other expenses.

Think about everything that goes into operating a healthcare clinic that doesn't directly involve treating a patient. You need accountants to make sure the books are accurate, billing staff to actually collect payments from insurance companies and government programs, IT systems and cybersecurity to protect patient information, compliance staff to make sure you're following complicated healthcare regulations, and management to keep the organization functioning. Those are all generally administrative expenses, but they're not necessarily wasteful and they still contribute to overall patient care. 

If a clinic spends 95 percent of its revenue on direct healthcare services but has terrible financial controls, inadequate cybersecurity, poor management, and no oversight, then is it actually spending its funding responsibly? Imagine another clinic that spends 85 percent on healthcare services but has excellent management, strong financial controls, robust compliance systems, and excellent patient outcomes. Proposition 44 would tell us the first clinic is doing better simply because it hit the 90 percent threshold – but that's not necessarily true! A percentage doesn't tell us whether the money was used effectively, just that it was spent on services that are still yet to be defined.

This is where I believe Proposition 44 falls short. It creates a very clear number that regulators can enforce, but clear isn't necessarily the same thing as effective. Instead, the questions we should be requiring nonprofit organizations to answer are: are you using your money responsibly? Are you actually serving patients? Are you transparent about your finances? And are you misusing public or charitable funds?

The solution I would rather see to this problem is accountability that starts with transparency. If a nonprofit healthcare organization receives taxpayer dollars, taxpayers should be able to see where that money goes! That requires clear financial reporting, independent audits, and meaningful oversight of how public funds are used. Then, when there is actual fraud, there should be real consequences – including criminal prosecution and jail time. We don’t need an arbitrary 90 percent spending mandate; we need to work toward strengthening transparency and enforcement of the rules we already have that are being bypassed and abused without consequence.

So where do I land on Proposition 44? I agree with the goal, 100%. I believe nonprofit organizations that receive taxpayer dollars should be held accountable for how they spend those dollars. I believe fraud and misuse of funds should be aggressively investigated and punished. But I don't think a blanket 90 percent spending requirement is the best way to accomplish that, and I certainly don’t think accountability can be accurately measured by how little an organization spends on administrative costs.

How to Vote This November

At the end of the day, these two propositions give us a really good example of why we can't just vote based on whether a proposition has a good-sounding goal. We all want better treatments for devastating diseased, and we all want patients to receive the care they need. But good intentions don't automatically make for good government policy.

As voters, our responsibility is to look beyond the promise and ask whether the government has chosen the right way to achieve it – asking whether the spending is necessary, whether the rules are effective, and whether we're getting the accountability and results we're being promised.

And that is exactly why I will be voting NO on both Proposition 38 and Proposition 44.

References:

[1] Cubanski, Juliette, Alice Burns, and Cynthia Cox. “What Does the Federal Government Spend on Health Care?” KFF, September 12, 2025. https://www.kff.org/medicaid/what-does-the-federal-government-spend-on-health-care/.

[2] California Budget & Policy Center, “Guide to the California State Budget Process,” November 25, 2025, https://calbudgetcenter.org/resources/a-guide-to-the-california-state-budget-process/#:~:text=Almost%203%20in%204,education%20%287.2%25%29.

[3] Cancer Research Institute. “What Is Immunotherapy? | Cancer Research Institute,” August 15, 2025. https://www.cancerresearch.org/what-is-immunotherapy.

[4] Legislative Analyst’s Office, “Proposition 38 [Ballot],” November 3, 2026, https://lao.ca.gov/BallotAnalysis/Proposition?number=38&year=2026.

[5] Ibid.

[6] National Institutes of Health. “Grants & Funding,” n.d. https://www.nih.gov/grants-funding.

[7] Zinshteyn, Mikhail. “This CA Proposition Will Send $4 Billion to a Single Nonprofit. Who’s Behind It?” CalMatters, August 3, 2026. https://calmatters.org/politics/elections/2026/07/proposition-38-california/.

[8] Ibid.

[9] Grimes, Katy. “Proposition 38 Benefits Its Billionaire Backers,” California Globe, August 4, 2026, https://californiaglobe.com/fr/proposition-38-benefits-its-billionaire-backers/.

[10] Zinshteyn, “This CA Proposition Will Send $4 Billion to a Single Nonprofit. Who’s Behind It?”

[11] Grimes, “Proposition 38 Benefits Its Billionaire Backers – California Globe.”

[12] Ballotpedia. “California Proposition 38, Immunology and Immunotherapy Research Funding Initiative (2026),” n.d. https://ballotpedia.org/California_Proposition_38,_Immunology_and_Immunotherapy_Research_Funding_Initiative_(2026).

[13] Legislative Analyst’s Office, “Proposition 44 [Ballot],” November 3, 2026, https://lao.ca.gov/BallotAnalysis/Proposition?number=44&year=2026.

[14] Ibid.

[15] Ibid.