The initial public offering of Facebook is likely to bring at least $500 million into state coffers, and minority Republicans in both houses say the money should be used for schools -- a swipe at Gov. Brown, who wants to raise taxes for schools.
From Nicholas Riccardi in the LA Times: "It's an indication of how the public offering will dominate not only the business blogs, but discussions among budget wonks in the state Capitol in coming weeks. The leaders of the small GOP caucuses in both houses of the Legislature released a joint statement urging Brown to use the expected windfall of state tax revenue from the IPO -- very, very rough estimates are in the $500-million ballpark -- to "protect our public schools from the Governor's trigger cuts and pay down the state's debt service."
"Brown, a Democrat, has proposed cutting more than $4 billion from public schools if voters in November reject his proposed temporary tax hike to close California's persistent budget deficit. Republicans oppose the tax hike and would rather see Facebook revenues go toward keeping schools solvent this year."
But all is not well in the world of Facebook, despite its overwhelming financial success, notes the LAT's David Sarno.
"Many of Facebook's most serious concerns arise from a tension at the core of its business: ensuring the privacy of its customers while also using what it knows about them to court advertisers.
"They have a narrow path to walk, and their risk factors really dramatize that in a way we hadn't seen before," Calo said."
"By storing, transmitting and analyzing the huge amount of user data it collects each day, Facebook said, it sends its customers "billions" of ads a day, all keyed to "the information they have chosen to share."
But clearly, the state is happy to get the money, reports the AP's Judy Lin in a tale that includes the best quote of the month.
"If it is as big as it is being billed, then on behalf of a grateful state, I will go to Mark Zuckerberg's house and either wash his windows or mow his lawn," said Brown's finance spokesman, H.D. Palmer."
"In a regulatory filing Wednesday with the Securities and Exchange Commission, the Menlo Park social networking giant indicated it hopes to raise $5 billion in its IPO. That would be the most for an Internet IPO since Google Inc. and its early backers raised $1.9 billion in 2004. California's nonpartisan legislative analyst's office estimates the state stands to reap hundreds of millions of dollars - perhaps more than $1 billion - in the near term from Facebook investors and employees profiting from stock transactions."
Speaking of money, Senate Leader Darrell Steinberg is pondering the options for California's $11.14 billion water bond on the November ballot. The bottom line: It will be smaller or get delayed.
From John Howard in California Water Wars: "Confronting voters with a big borrowing package like the water bond – nearly as large in real dollars as the borrowing that financed the State Water Project more than 50 years ago — may not be prudent, given that Gov. Brown is pushing his tax initiative to raise $7 billion annually for schools and public safety over the next five years."
"At least two other tax-increase plans to raise billions of dollars in new revenue also remain active. But the governor’s plan takes precedence. “The tax initiative comes first,” Senate Leader Darrell Steinberg, D-Sacramento, said Wednesday."
And more on money: Payments to California lobbyists -- the hired guns as well as the in-house lobbyists -- totaled a record $285 million during 2011.
From the LAT's Patrick McGreevy: "Education, healthcare, assistance to a proposed NFL stadium in Los Angeles and a proposal to dissolve the troubled city of Vernon were among the top issues drawing attention from lobbyists in 2011. The amount spent on lobbying was up 6% from the year before, and just above the previous record -- $281.7 spent on lobbying in 2008."
"Lobbying is at record levels because special interests will always look for ways to game the system," said Phillip Ung, a spokesman for California Common Cause. "Californians should be worried that their voices may be drowned out by lobbyists who outnumber legislators 16:1."
