Bloomberg · October 21, 2026
Billionaire Asks Californians to Bankroll Disease-Prevention Lab
Billionaire Gary Michelson has pledged $120 million to help establish a medical research institute in Los Angeles.
Now he’s asking California voters to approve a far larger investment of public money, with much likely to go to the California Institute for Immunology and Immunotherapy, which he co-founded and chairs.
Proposition 38 would authorize $8.4 billion in state borrowing to study the immune system and develop treatments for afflictions including cancer, heart disease and Alzheimer’s. Michelson says the investment would help sustain American scientific advancements as the Trump administration cuts federal research funding.
Voters will decide Nov. 3 whether to approve the borrowing, among 14 statewide measures on the ballot. The proposition would not impose a new tax; rather California would repay the bonds from its general fund, which also supports schools, health care and other public services.
The state’s nonpartisan Legislative Analyst’s Office estimates repayments of $500 million to $600 million annually for about 20 years. Research discoveries could eventually offset some or all of that expense, it says, but the revenue is uncertain and could take years or decades to materialize.
Michelson, a former spine surgeon and inventor, says the potential to prevent and cure disease makes the investment worthwhile.
“California’s initiative system was created so that the voters could bypass the politicians and decide important priorities directly,” Michelson, 77, said in emailed responses to questions. “There is no more important priority than preventing and curing fatal diseases. We trust the people of California with this decision.”
In this election, most attention and campaign spending has focused on Proposition 40, a proposed state tax on billionaires’ wealth. Some critics argue Michelson’s initiative, Proposition 38, is the reverse: a billionaire asking Californians to help bankroll his research ambitions.
“Taxpayers take all the financial risk,” Robert Kaplan, a senior scholar at the Stanford School of Medicine, said in an interview. “This is putting all your eggs in one basket.”
Michelson has donated $66.2 million of the $72 million raised for the Proposition 38 campaign so far, according to California Secretary of State data. The No on 38 campaign reported about $9,000 in funding.
The measure had support from 55% of likely voters in a Public Policy Institute of California survey last month. The same poll found 52% backed the proposed one-time 5% tax on billionaire’s wealth, largely to fund health care.
The bond would support research on immunology, the study of the body’s immune system, and immunotherapy, which harnesses that system to treat disease. The 2025 Nobel Prize in medicine was awarded to a trio of researchers who identified the immune system’s security guards, regulatory T cells, which prevent immune cells from attacking our own body.
The measure does not name Michelson’s California Institute for Immunology and Immunotherapy, but its eligibility requirements — which cover a recipient’s facilities, philanthropic support and ties to a University of California medical center — appear to exclude every other institute in the state, according to a CalMatters analysis.
Michelson and his wife, Alya, have pledged $120 million to the institute, part of $250 million promised by its co-founders, who include financier Michael Milken and Sean Parker, Facebook’s first president, since it was established in 2024.
The institute will occupy part of a former Los Angeles shopping mall being converted into a UCLA research park. The bond funding qualification requirements are designed to create a world-class hub with resources, expertise, staff, technology and access to clinical trials and medical facilities to accelerate discoveries, according to the Proposition 38 campaign. The California Department of Public Health ultimately decides which research center gets the money.
Governor Gavin Newsom endorsed the measure this month, saying it would support lifesaving research and counter federal funding cuts. UCLA has been among the universities targeted by the Trump administration over allegations of antisemitism and discrimination.
Jillian McCool lost her post-doctoral position as an immunology and biological researcher at the Lawrence Livermore Laboratory outside of San Francisco, after her federal funding was cut last year. She supports Proposition 38 as an opportunity to fill the void left by US cutbacks, despite her discomfort with billionaires’ political influence.
“I hate billionaires, but if you want to spend money on science I’ll take it,” McCool, who now works on bee research at University of California at Davis, said in an interview. “It’s so hard to come up with funding.”
The financial case for the bond depends partly on whether publicly funded research produces marketable treatments. The measure requires 10% of revenue generated by discoveries to go to the state to repay the borrowing and interest. To recoup costs of a $8.4 billion bond, breakthrough therapies would need to generate $120 billion in intellectual property, according to Kaplan, a former National Institutes of Health associate director.
“This is channeling perhaps $100 billion in intellectual property revenue to a small organization that’s a creation of billionaires,” Kaplan said.
California’s earlier bet on stem cell research, financed with voter-approved bonds beginning in 2004, offers a cautionary example, Kaplan said. The program “has generated only about $16 million in royalties,” or less than 1% of the cost of principle and interest on the debt. The proposed bond would add to California’s debt burden at a time other state services, including health care, face federal cuts, he said.
Michelson, who signed the Giving Pledge to donate most of his fortune to charity, said his institute will move forward even if voters reject Proposition 38.
“I won’t make a single dollar from Prop 38, quite the opposite,” he said. “I am supporting Prop 38 to give my children and millions of others a chance to live longer, healthier lives.”
— With assistance from Andrew Oxford