On the ballot this November, Californians will decide if they want the state to borrow $8.4 billion to support research that aims to deliver cures for cancer, Alzheimer’s and heart disease “in our lifetime.”
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Backers say that Proposition 38 supports life-saving immunology research to cure and prevent diseases and provide a steady funding source amid uncertainty of federal grants. The measure ensures “strong accountability, including independent audits,” and mandates a 20% discount to California residents for treatments developed from this funding.
But critics view the legislation as a Trojan horse: while promising transformative medical breakthroughs, it will channel billions in state funding to a newly created institute that currently has no scientists or researchers.
If Proposition 38 passes, San Diego stands to be a major beneficiary.
The La Jolla Institute for Immunology, Salk Institute, Sanford Burnham Prebys, UC San Diego and Scripps Research — some of the most prominent immunology research institutions in the nation — would likely be on an advisory committee overseeing $4.2 billion, about half of the bond revenue the proposition would generate.
Despite their potential financial stake in its passage, each organization has declined to speak about the measure.
What Proposition 38 says
A “yes” vote would authorize the state to issue $8.4 billion in bonds for immunology and immunotherapy research for diseases like cancer, Alzheimer’s and heart disease.
The funding will primarily target early-stage research. In theory, intellectual property developed from this research could be licensed to pharmaceutical companies and biotechnology companies to turn discoveries into drugs.
Under the licensing terms, institutes agree to a 5% to 10% royalty on intellectual property developed. About 10% of all resulting revenue will go toward repaying the state bond. Once the bond is fully repaid, 100% of the revenue will return to research.
The proposition ensures that no more than 2% of all money dispersed goes to administrative expenses, keeping the bulk of state funds focused on research. However, a special carve-out provides the chosen institution additional flexibility, offering a $100 million loan for “startup costs.”
The lion’s share of the funding will be overseen by a single nonprofit research institution that is not named in the measure.
“The intent of the measure is to create in the institute a ‘hub’ of sorts for immunology and immunotherapy research, which will bring together scientists … to accelerate discoveries into treatments and cures,” said Robin Swanson, spokeswoman from Yes on Prop 38.
One institute will get half the funds
Half of the $8.4 billion is earmarked for a single institution — unnamed in Proposition 38.
The measure calls for the California Department of Public Health to select “a world-class and innovative immunology and immunotherapy research institute affiliated with the University of California.”
The recipient must meet a set of highly specific criteria, and according to CalMatters, only one institution satisfies this threshold: the California Institute of Immunology and Immunotherapy (CIII).
When asked to confirm, Proposition 38 spokeswoman Swanson acknowledged it is “very likely” CIII will be chosen.
CIII is a UCLA-affiliated nonprofit founded in 2024 by Dr. Gary Michelson, Meyer Luskin, Michael Milken, Sean Parker and other biotech billionaires.
Notably, the proposition’s primary future beneficiaries are funding the campaign.
Campaign finance records show that of the more than $38 million raised by the “Yes on 38” campaign, the vast majority has come from Michelson and Luskin, including a $14 million loan from Michelson to his own nonprofit organization supporting the measure.
Other supporters include the California Democratic Party, the Michael J. Fox Foundation for Parkinson’s Research, the Alzheimer’s Association and the ALS Association.
“Immunotherapy is changing the future of cancer care, but patients can’t afford for research to slow down,” said Gina Carithers, CEO of the Prostate Cancer Foundation.
Current cancer treatments, like chemotherapy, focus on killing cells. Immunotherapy treatments harness the body’s own immune system to recognize and stop diseases. “We urgently need sustained investment to accelerate breakthroughs and bring more life-saving treatments to patients and families,” said Carithers.
Research shows that this specific vein of science has the potential to deliver a myriad of cures for cancer, Parkinson’s, Alzheimer’s, ALS, rheumatoid arthritis and heart disease, among others. There is a list of 145 FDA-approved immunotherapies on the Yes to Prop 38 website, with over 1,500 more in clinical development.
“For me, research isn’t abstract,” said Lynn Tsai, a kidney cancer and immunotherapy patient. “It’s why I have treatment options today and how we’ll find better ones in the future … that’s why I support Prop. 38.”
The backers of the measure advertise “cures in our lifetime,” and CIII’s stated mission is “ending disease within our lifetime.”
However, state filings from May 2026 show the entity has zero employees and a physical location that remains a fenced-off construction site.
But if Proposition 38 passes, it would make CIII one of the largest immunology institutes in the world.
For comparison, the globally ranked La Jolla Institute for Immunology brought in $84 million in revenue last year, including about $52 million in federal grants and contracts — roughly 2% of what CIII stands to receive if Proposition 38 passes.
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“We’re not sure that the California Institute of Immunology and Immunotherapy actually exists,” said Robert Kaplan, a senior scholar at Stanford University and former NIH associate director who leads the opposition to Proposition 38.
The opposition is a grassroots coalition led by Kaplan, former nonpartisan analysts from the California Legislative Analyst’s Office, Courage California, Howard Jarvis Taxpayers Association and the League of Women Voters of California. They’ve raised a little over $3,700, according to state filings.
According to CIII’s website, the institute is still in its “planning phase … recruiting senior scientific and executive leadership,” and developing an initial five-year plan.
Although the institute lists no physical address or phone number on its website, a “Yes on Prop 38” spokeswoman was able to provide an email address to a CIII spokesperson.
When asked about the institute’s lack of research, the spokesperson pointed to a UCLA news release issued last month regarding a new microbiome vaccine program.
Notably, Proposition 38 requires the selected institute to dedicate at least $50 million to a rapid vaccine development program and another $50 million for microbiome research.
When questioned about its connection to the ballot measure, CIII said in a statement to the Union-Tribune that the institute “has taken no position on Proposition 38, did not draft the measure, and is not part of the campaign.”
The other $4.2 billion
The remaining $4.2 billion will be awarded through competitive research grants overseen by a scientific advisory council.
Seven members will be appointed by UC chancellors, with another 10 to 15 selected by the initial “executive committee.” Only institutions represented on the council are eligible to apply for this funding pool.
The La Jolla Institute for Immunology, Salk Institute, Sanford Burnham Prebys and Scripps Research will likely serve on the council if they choose to, according to backers of the measure.
Under the measure, this advisory committee must “confer with the institute” before selecting proposals and guarantee the institute an opportunity to “substantially participate” in funded research, regardless of whether the original grant applicant requested such collaboration.
While CIII currently has no published peer-reviewed research, the National Library of Medicine’s PubMed database shows thousands of peer-reviewed studies published by researchers affiliated with the established La Jolla Institute for Immunology.
UCSD, La Jolla Institute for Immunology, Salk, Scripps and Sanford Burnham Prebys did not comment on their prospective role on the advisory committee or their thoughts about the oversight addendum.
Despite having a major financial stake in the outcome, the San Diego institutions remain silent on the measure’s unusual structure — a restraint David Panush, president of the consulting firm California Health Policy Strategies, attributes to how significantly local science and research entities benefited from previous state-sanctioned research bonds.
San Diego science could benefit, but taxpayers may not
This isn’t the first time an early-stage research bond was on the ballot.
Propositions 71 and 14, passed in 2004 and 2020, raised a cumulative $8.5 billion in state bonds to establish the California Institute for Regenerative Medicine (CIRM), a dedicated state agency created to fund and accelerate stem cell and gene therapy research based in San Francisco.
San Diego institutions benefited immensely.
UC San Diego received over $336 million across 148 awards, while Scripps Research obtained tens of millions. The Salk Institute shares facilities and faculty with CIRM, and the Sanford Consortium for Regenerative Medicine was built using a $43 million facility grant from the stem cell bond.
Yet, while local research hubs thrived under past bonds, the direct financial return to California taxpayers tells a different story.
The total cost of Proposition 71 — including principal and interest — was projected to reach roughly $12 billion, but state reports show taxpayers have received back through intellectual property royalties.
That’s because intellectual property doesn’t pay off, explained Dan Carson, a former deputy analyst at the California Legislative Analyst’s Office. Carson evaluated Proposition 71 for the state before he retired. “We got about $16 million in payoff for intellectual property to repay the principal and interest on those bonds,” Carson noted, pointing out that while foundational research is vital, it rarely generates enough direct revenue to make taxpayers whole.
Under Proposition 38, those taxpayer commitments remain substantial.
According to the Legislative Analyst’s Office, paying off the bond will require $500 million to $600 million annually from California’s general fund for roughly 20 years — accounting for about 0.25% of the state’s annual budget. Overall, bond financing means the total cost will be about 10% higher, after adjusting for inflation, than if the state funded the $8.4 billion upfront.
Beyond the financial considerations, critics point to key structural differences between Proposition and the stem cell propositions. Unlike Propositions 71 and 14, which created public agencies subject to state oversight, Proposition allocates the largest share of taxpayer dollars to a private nonprofit entity that is explicitly exempt from open records laws and public input requirements.
If Californians want to support early-stage research, they should look to another measure that is on the ballot in California in two years — Senate Bill 895, which proposes a $7.5 billion general obligation bond to fund scientific, biomedical, and public health research, said Panush.
Opposition leader Kaplan agreed.
“We’re not opposed to bills that fund research,” he said. “If we’re going to do it, we should do that one, which I think is much better.”
He said his preference for SB 895 comes down to its use of a public institution, the California Foundation for Science and Health Research Council, to oversee a competitive grant process, which would fund a broader range of studies rather than just immunology, Kaplan said.
Gov. Gavin Newsom signed off on SB 895 on Wednesday. It will be on the ballot in March 2028.
First, Californians must decide the fate of Proposition 38, which requires a simple majority of support at the ballot box for passage next month.
