State officials change their tune on the monetary benefit of stem cell research

Sunday, November 11, 2007 | 10:12 p.m. CST; updated 11:20 p.m. CDT, Monday, July 21, 2008

JEFFERSON CITY — In a mere two years, a constitutional measure ensuring embryonic stem cell research can occur in Missouri has gone from costing the state a slight amount of money to generating significant tax revenues.

At least that’s the impression voters could get if they have a chance to cast ballots in November 2008 on a proposed constitutional amendment reversing a key portion of the one they narrowly passed last year.

The highly publicized 2006 amendment ensured that a controversial embryonic cloning technique could be used by Missouri’s stem cell researchers. The proposed 2008 amendment would ban that procedure.

But before backers start gathering petition signatures to qualify for the ballot, the new stem cell amendment first must survive a legal challenge.

Supporters and opponents both have sued in Cole County Circuit Court, claiming the ballot summary and financial estimate that would be presented to petition signers and voters are unfair and inaccurate.

As to the financial projection prepared by Auditor Susan Montee, one side claims the costs are overstated while the other contends they are understated.

But what’s most intriguing is how the financial estimates have changed in two years.

On Oct. 31, 2005, then-Auditor Claire McCaskill projected that the original constitutional amendment “would have an estimated annual fiscal impact on state and local governments of $0 — $68,916.”

That impact was due entirely to a projection from the attorney general’s office that it would need to hire someone to handle stem cell legal actions. (The legislature ultimately denied that budget request.) There was no mention that passage of the amendment could generate additional tax revenues for state or local governments.

Yet Montee’s Sept. 25 financial estimate for the latest stem cell initiative assumes the 2006 constitutional amendment is spurring economic development and thus generating substantial tax revenues.

“This (2008) proposal could have a significant negative fiscal impact on state and local governmental entities due to its prohibition of certain research activities. However, the total costs to state and local governmental entities are unknown,” Montee’s financial summary states.

The brief ballot summary is backed up with a more in-depth 11-page summary detailing the potential costs.

The city of St. Louis, for example, claims the financial effect of the new amendment would be “both extremely serious and extremely negative” — costing the city at least $14.3 million in lost tax revenues.

If the amendment passes, St. Louis could lose 10 percent of its nearly 34,000 life-sciences related jobs, the auditor’s summary says.

“Scientists in general will view Missouri as a regressive and unfriendly place for life sciences research, and those who make careers of cutting-edge research will not locate in Missouri,” the auditor’s office says in summarizing the comments from the city of St. Louis.

Kansas City told the auditor’s office that passage of the newly proposed constitutional amendment could cost it a minimum of $306,000 in lost earnings and sales taxes if the local Stowers Institute for Medical Research consequently decides to relocate or cut jobs.

Neither St. Louis or Kansas City submitted any comments to the auditor’s office about the 2006 measure. Unlike this year, the auditor’s office didn’t solicit their suggestions last time.

The auditor’s office did ask for financial estimates two years ago from the UM System and the state Department of Economic Development. At the time, the university said it was unable to determine the potential costs, and the Economic Development Department cited little or no fiscal impact from the ballot measure.

This year, the university warned that the new measure would have “a negative impact” on its “ability to conduct cutting edge research,” the auditor’s office said.

The Department of Economic Development, which is part of Gov. Matt Blunt’s administration, claimed the new proposal could damage Missouri’s business climate and thus “would have a significant negative impact” on tax revenues, according to the auditor’s summary.

What accounts for the changed tone?

The auditor’s office said its financial estimates merely reflect the thoughts of others — not its own opinions or its own research.

“We review all the information we receive for accuracy and reasonableness, but unless we find something that’s terribly egregious, something that seems out of place or unusual, we’re not going to second guess the impact that they’ve provided to us,” said Montee’s chief of staff, Joe Martin, “because they are in a better position to know than we are what the impact would be on the programs they administer.”

In the case of the Economic Development Department, spokesman Spence Jackson said the auditor’s 2005 request for information was sent to the agency’s Division of Professional Registration, which looked only at how it would effect the professions it regulates. This year’s request got sent to the department director and analyzed by his policy staffers, Jackson said.

Also included in Montee’s financial summary is an unsolicited analysis submitted by an attorney for the Missouri Coalition for Lifesaving Cures, the group that sponsored the 2006 ballot initiative. It concludes that passage of the latest proposal could result in hundreds of millions of dollars in lost tax revenues.

The stark contrast between the past and present financial estimates has heightened the concern of Cures Without Cloning, which is sponsoring the latest ballot initiative.

“It makes you really wonder about their numbers and how they somehow have created that amount of tax revenue over the last year,” said Cures Without Cloning spokesman Curt Mercandante. “Were the numbers right last year, or are they right now?”

The reality is there are no definitive figures. All the costs and benefits are merely projections, based on assumptions that may or may not pan out.

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