NOTE: This version corrects the amount of the tax on the ballot. It is one-half cent. We apologize for the error.
By Jeff Fox
Voters in Jackson County go to the polls Tuesday to decide on a proposed one-half cent sales tax for translational medical research. That would raise approximately $40 million a year for 20 years. Primarily, the money would go to three institutions: Children’s Mercy Hospital, St. Luke’s Health System and the University of Missouri at Kansas City. Also, some of the money would go to a new research institute.
Those groups would hire or add research teams to conduct translational research, which proponents describe as the link between basic scientific discovery in the lab and a new cure at the bedside. Proponents say it would spark growth in good-paying life sciences jobs and would improve health care in the area. The Examiner asked representatives of the proponents and the opponents of the tax vote to answer five questions about the issue.
Representing the proponents is Wayne O. Carter, president and CEO of the Kansas City Area Life Sciences Institute.
Representing the opponents is Jim Fitzpatrick, a former Kansas City Star reporter who formed Committee to Stop a Bad Cure.
1 Is the potential for medical breakthroughs worth the cost to the taxpayers?
FITZPATRICK: In my opinion, no. The proponents’ approach – foisting the cost of a major “translational medical research” program onto taxpayers’ backs – is unprecedented. There’s good reason for that: To be effective, medical research must be done on a very large scale, well beyond what a local governmental jurisdiction can afford. As it is, 10 regional institutions – including Children’s Mercy, St. Luke’s and UMKC (the primary, prospective beneficiaries of the new sales-tax proceeds) – are spending more than $550 million a year on medical research. The questions that voters need to ask themselves are: How much more research does the Kansas City area need, and, if it needs more, how should it be financed? The answer to the first question is “none”; the answer to the second question is “privately.” Corporations, foundations and wealthy individuals should pick up the tab.
CARTER: YES, in many ways. The translational research that will be funded in the Institute will have a direct impact on Jackson County residents, especially outcomes research that will directly impact the treatments and care individuals receive. There will be new companies that start and run their business in Jackson County as a result of the Institute. These companies will create new jobs and expand the tax base for the county. New drugs or devices that are developed and commercialized in the Institute will return 20 percent of the net revenues to a Foundation created by the county for public health and indigent care. The tax will exist for 20 years, but this benefit will continue forever and will create limitless opportunity for the future of Jackson County. For the average citizen, the tax will cost between $3 and $4/month and about 1/3 of the tax will be paid by non-residents that come to Jackson County to buy goods and services. Voters are not being asked to fund a building for the Institute since $75 million have been generously donated by the Hall Foundation for building construction if the tax is approved.
Page 2 of 4 - 2 What are the most likely benefits of the research?
FITZPATRICK: Perhaps advancement here and there over the course of a decade. Look at the Stowers Institute for Medical Research. It opened in 2000, and I haven’t seen any headlines announcing major medical breakthroughs there. To the credit of Jim Stowers Jr., the founder of American Century Investments and the person who opened his wallet to make the institute a reality, he didn’t ask the taxpayers for any help.
CARTER: Translational research in the Institute will be focused on childhood diseases, and diseases of the elderly, such as stroke, cardiovascular disease, vision and bone and muscle diseases. Additionally the Institute will focus on obesity and secondary related diseases like diabetes. Specific benefits from the Institute could include new drugs, devices, or diagnostics for stroke, Alzheimer’s disease or childhood cancers. Additionally the Institute will work on outcomes research which has a direct goal to optimize the end results of health care in terms of benefits to patients and society. Outcomes research drives what the name implies, the best outcome for the patient, and generally it accomplishes this with significant cost savings. In terms of economic benefit, in the first 10 years, we believe the economic impact to Jackson County will exceed $1 billion. The tax will also provide 10 percent of the funding to workforce development so that Jackson County children can be properly trained to compete for health care related jobs.
3 Why should this tax be paid by the citizens of one county instead of a region or state?
FITZPATRICK: I’m not convinced that the residents of a cluster of Missouri counties – or even the residents of all Missouri – should be asked to serve up hundreds of millions of dollars for additional medical research. Shouldn’t medical research be the primary responsibility of the pharmaceutical companies, companies that specialize in medical research and the federal government? Our country needs a lot of medical research, for sure, but I do not believe the taxpayers of any given city or county should be asked to carry the load. Medical research is far removed from core government responsibilities, which include providing fire, police and ambulance services; maintaining bridges, streets, parks and public facilities; collecting trash; and assessing and collecting taxes. It’s not prudent or rational for county government to charge off in a new direction.
CARTER: Given the opportunity for returns and benefits to the county, a larger region or bi-state tax would create significant obstacles. Where would the Institute be physically located? How would you divide resources and expenses and how do you divide the revenues? Jackson County is uniquely positioned with the existing resources in the county including the world-class basic science expertise within the Stowers Institute and the excellent clinical facilities and research capabilities of Children’s Mercy, Saint Luke’s and UMKC.
Page 3 of 4 - 4 Do the agreements in place on this issue sufficiently protect the financial interests of Jackson County taxpayers?
FITZPATRICK: The “Memorandum of Understanding” and the “Operational and Governance Overview” – the documents that outline how the new Translational Medicine Institute would operate – provide for little taxpayer accountability. Accountability is the cornerstone of good government. Yet, the six-member Board of Directors that would control the institute (and its spending) includes only one elected official – a Jackson County legislator of the full Legislature’s choosing. The other board members would be the CEO of Children’s Mercy (board chairman); another Children’s Mercy representative; and the CEOs of St. Luke’s Health System, UMKC and the Kansas City Area Life Sciences Institute. By the way, I believe that one of the goals of the Civic Council of Greater Kansas City – the major organization behind this illogical tax proposal – is to make the life sciences institute, which the Civic Council founded more than a decade ago, the coordinating agency for medical research in the county.
CARTER: YES, there has been an extensive review and agreement at multiple levels that have developed and modified the memorandum of understanding and legislation to develop the Institute. To some people the number of boards may seem onerous, but most people understand the importance of multiple levels of accountability to so that Jackson County citizens can have assurance that the tax dollars are spent for the specific purpose as set forth in the legislation for translational research. There is accountability on all boards that includes Jackson County representation and oversight to ensure the desired outcome is achieved.
5 Without this tax, is it likely the Kansas City area will be able to foster the collaboration and investment needed to be a leader in life sciences research generally?
FITZPATRICK: In the assessment of the Kansas City Area Life Sciences Institute, the Kansas City area already is a medical-research leader. The institute’s web site, www.kclifesciences.org, says that the institute’s initial business plan, produced in 2000, set a goal of “$500 million in annual research expenditures at the end of 10 years.” Along the way, the institute has picked up 10 “stakeholder” institutions: Children’s Mercy, St. Luke’s, UMKC, the University of Kansas, KU Medical Center, Kansas State University, University of Missouri-Columbia, MRI Global, Kansas City University of Medicine and Biosciences and Truman Medical Centers. The institute’s website proudly proclaims, “There now are more than 2,000 scientists and greater than $550 million in annual research expenditures by our stakeholder institutions… the region clearly qualifies as a significant contender as a nationally and globally recognized life sciences center.” Mission accomplished. Why do we need more?
Page 4 of 4 - CARTER: No, it is unlikely that Jackson County and the Kansas City area will be viewed as a national or global leader in life science research and development without additional investment and collaboration. Jackson County has a unique opportunity to be the direct beneficiary of medical research conducted in Jackson County including the improvement in health care, the creation of new jobs and start-up companies to fund Jackson County for years to come. Achieving NCI designation for the KU Cancer Center required leadership that included a tax to help fund the Center. The result of that effort is millions of additional NIH dollars, new clinical trials and life-saving drugs available to patients that were not in Kansas City a few years ago. Jackson County has a similar but larger opportunity to change health care and the economy for decades to come. Jackson County could become a health care destination as we often refer to the Mayo Clinic in Rochester, Minn., or other health care destinations in the nation.