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$500M research fund proposed

| Thursday, Feb. 2, 2006

Democratic Gov. Ed Rendell on Wednesday invoked the hallowed name of University of Pittsburgh researcher Dr. Jonas Salk -- the creator of the polio vaccine -- in proposing a $500 million bond initiative to accelerate medical research in Pennsylvania.

For the next 20 years, the Jonas Salk Legacy Fund would use about $34.8 million of the money the state receives annually from the 1998 national tobacco settlement to pay the debt on bonds floated to invest in the biosciences industry, Rendell said yesterday at a news conference in Harrisburg, where he was joined by Salk's oldest son, Dr. Peter Salk, of La Jolla, Calif.

"This is to build on our successes," said Rendell, who will formally introduce the legacy fund in his Feb. 8 budget address for 2006-07.

The state now uses 19 percent, or $69.5 million, of its tobacco fund each year to pay for a wide array of medical research through a program administered by the Department of Health. Rendell has proposed diverting half of this money to the Salk fund, which would be overseen by an independent board of scientists, doctors, public officials and university leaders.

Twenty percent, or $100 million, of the bond money would be used in "starter kits" to help academic hospitals, research centers and universities buy scientific equipment and recruit top researchers.

But the bulk of the Salk money -- $400 million -- would be used for grants awarded to private companies and public institutions planning to build laboratories and technology incubators.

Each recipient would be required match the state's investment dollar-for-dollar.

Leveraging the tobacco money in this way would help Pennsylvania attract world-class scientists, purchase new equipment and create additional building space for research on medical devices, drug development and treatments for cancer and heart disease, said Dennis Yablonsky, secretary of the state Department of Community and Economic Development.

"What it's about is competitiveness," Yablonsky said.

Salk's son said the legacy fund would represent another major step toward "improving humanity," resonant of his father's discovery of the polio vaccine more than a half-century ago.

Despite rampant speculation on behalf of Senate Republicans earlier this week that the governor would propose using tobacco money to pay for controversial stem cell research, Rendell said yesterday that is not the intended purpose of the Salk fund.

Officials at local universities and some GOP leaders said they would need to know more details about Rendell's proposal -- which would require legislative approval -- in order to support it.

"What kind of matches would count• What would be the real composition of the independent body, and its authority?" said Margaret McDonald, the University of Pittsburgh's associate vice chancellor for academic affairs, health sciences. "We would really like to see what the governor has in mind on all of these issues."

Pitt receives about $10 million in tobacco settlement money each year, McDonald said.

'We're going to need a whole lot more information to be supportive of this plan," said Andrew Crompton, an attorney for Senate President Pro Tempore Robert Jubelirer, R-Altoona.

Other Republican legislators said they would not support any measure that requires the state to assume more debt.

"Any further borrowing is not open for discussion," said Stephen Miskin, spokesman for House Majority Leader Sam Smith, R-Punxsutawney.

Rendell said all risk for the bond issue would be assumed by the money lenders and that no Pennsylvania tax money would be used to pay for the Salk fund.

Additional Information:

About Gov. Ed Rendell's biosciences investment proposal:

  • Pennsylvania will receive $11 billion through 2025 under the national legal settlement from tobacco companies to repay states for Medicaid expenses incurred for patients with smoking-related illnesses.

  • Nineteen percent -- or $69.5 million -- of Pennsylvania's annual share of the tobacco money is spent on research every year.

  • Rendell's plan would take half of the money -- $34.8 million -- to pay the debt service for the next five years on $500 million in bonds floated for medical research.

  • About $100 million would pay for scientific equipment and recruiting top researchers; $400 million would go toward grants to build labs and technology incubators.

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