Today we’re going to talk about medical miracles, and the key role that Georgia can play in bringing them to life. The price of admission is a brief detour through the state budget.
Gov. Sonny Perdue released his revenue estimates for fiscal 2011, and of the dozens of line items only a handful of numbers are bigger than they were in 2009. Yet the bottom line is about $325 million larger. What gives?
Lottery revenues are rising, for one. A hospital provider fee is proposed. But the line that really sticks out is “All Other Departments,” which projects a $290 million jump.
That $290 million represents the estimated result of selling part of the state’s loan portfolio. Since the 1980s, the Georgia Environmental Facilities Authority has financed water and sewer projects for local governments. The original idea was to help cities and counties that couldn’t borrow in the private markets, but even investment-grade counties like Cobb and Gwinnett have come to rely on GEFA from time to time.
GEFA now holds almost $1.7 billion in loans, and the governor proposes to securitize and sell a chunk of those loans to private investors. The state would continue to service the remainder of the portfolio — mostly comprising loans to the lower-rated cities and counties for whom GEFA was created in the first place — and plow payments (and some other state funds) back into future loans.
Win-win. But it could be win-win-win — which brings us back to medicine.
For years, Georgia’s political, business and academic leaders have called for greater investment in the state’s biomedical industry. We have much promise in this field, what with a roster of institutions that includes Georgia Tech, the University of Georgia, the Medical College of Georgia, Emory University, Morehouse School of Medicine, the Centers for Disease Control, Grady hospital, the Shepherd Center, St. Joseph’s hospital and veterans’ hospitals.
Specifically, we have much promise in the field of regenerative medicine. Research into the rebuilding of tissue and organs could change the lives of paraplegics, burn victims, diabetics and those who suffer from heart and lung disease.
Social conservatives objected to the use of embryonic stem cells. That used to be an obstacle. But advances in the use of adult cells mean plenty of new research can be done without embryonic cells, clearing that moral dilemma.
Money remains the problem.
Georgia hasn’t built the kind of private angel and venture capital investment capacity that places like Boston and Silicon Valley boast. Our state pension funds aren’t allowed to invest even a small portion of their money as private equity or venture capital. Other states without such restrictions have used retirement savings to leverage private investment.
Legislators still would be wise to reconsider restrictions on pension plan investments. But the GEFA windfall is an immediate opportunity.
Selling state assets to plug a short-term budget gap is surely attractive to the people deafened by the squeals that arise from budget-cutting.
The rest of us, however, might favor a more long-term investment if we’re going to sell state assets. Even a fraction of the $290 million — say, $50 million — could help swing some critical decisions that will be made soon.
If these decisions go our way, they will boost Georgia’s position as a leader in regenerative medicine. If not, we’ll be stuck looking for other ways to generate health and wealth.