30-YEAR BOND DEBT FOR RESEARCH RECKLESS IDEA.

Byline: M. David Stirling 

PROPOSITION 71, which appears on the Nov. 2 election ballot, contains a serious, perhaps fatal, legal flaw. The flaw has nothing to do with the merits of stem-cell research. The flaw is the measure's use of general- obligation or G.O. bonds to finance research.

Since statehood, California - and nearly every other state - has utilized G.O. bonds to finance the construction or acquisition of major capital improvement projects, consisting of brick-and-mortar infrastructure investments, such as roads and highways, bridges, prisons, water quality improvement facilities, state buildings and parks and recreation areas. Yet, according to the legislative analyst, if Proposition 71 passes, California would sell $3 billion in G.O. bonds and use the proceeds to finance stem-cell research. The $3 billion in principal that the bond sales would raise, plus another $3 billion in interest, would be repaid to bondholders from the state treasury over 30 years.

Here's the flaw: The California Constitution prohibits the creation of state debt ``in any manner ... unless it is authorized by law for some single object or work'' (Article XVI, section 1).

The delegates to California's original constitutional convention in 1849 adopted that language for the sole purpose of disciplining the reckless use of state indebtedness that had occurred in other states. And for more than 150 years, when it comes to state indebtedness created through the sale of long-term general-obligation bonds, the words ``single object or work'' have been understood and accepted by members of all three branches to mean ``capital improvement projects.''

Over the years, California has sold and repaid billions of dollars in general-obligation bonds to finance such projects. In fact, as of June 1, the state had about $33 billion in outstanding general-obligation bonds on which it was making principal and interest payments, with an additional $30 billion of such bonds authorized but not yet sold because the capital projects for which they were authorized have not yet started or reached the major construction phase.

Except for Proposition 57's $15 billion in long-term bonds, which voters approved in the June election for debt-reduction purposes - and which Proposition 58 declared a ``one-time exception'' on the use of G.O. bonds - history does not show that California has borrowed money through long-term G.O. bonds to finance an intangible and ephemeral program such as ``research.''

Bonds have been authorized to construct buildings, including research facilities, at the University of California, for example, because buildings are a physical, capital improvement that the state's taxpayers who are repaying the bonds and interest over 30 years see as a permanent investment by the state. On the other hand, neither money spent on salaries and expenses, grants and loans, nor money spent on the administrative costs of persons doing research on scientific subjects, buys the state any physical infrastructure investment. Very possibly, it could buy the state nothing at all.

In this age when government borrowing to pay for programs we otherwise cannot afford has become the politicians' quick and easy fix - and passing on massive public debt to future taxpayers seems no longer a fate to be feared - it is critical that we fight to uphold those tools of fiscal discipline passed on to us by wiser generations. If the body politic embraces the proposition that long-term G.O.-bond financing for an intangible purpose such as research is acceptable, how do we get off that slippery slope the next time a worthy cause comes along?