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THE NOONER for February 2, 2012
TWEET DU JOUR: @HotlineReid - "Americans will eat 1.25 billion wings on Super Bowl Sunday. Poor wingless chickens"
HAPPY THURSDAY. Feels like we've been here before.
LIKE! Facebook yesterday formally filed an intent to conduct an initial public offering, fueling visions of sugarplums in Ana Matasantos's head. The filing indicates that the company will seek $5-10 billion from investors, with a likely post-IPO valuation of $75-100 billion.
The impact on the state's general fund will depend on 1) the IPO date 2) the resulting valuation 3) the timing of insider sales. Many insiders won't be able to trade during a lock-up period ranging from 91 to 211 days, which is standard practice to avoid a glut of shares and to retain key employees. IPOs are generally expected three-four months after the SEC filing, depending on market conditions. Mark Zuckerberg, who could have $28 billion worth of stock after the IPO, would have a 211 day lock-up.
One would expect that they would go in April-May before the summer slow season on Wall Street. Thus, many insiders could begin selling around August, and the state would see capital gains paid in the current tax year. The "guesstimate" buzz in the budget circles is between $300-700 million in increased personal income taxes in tax year 2012 from the IPO. But, it could be significantly higher.
While geeks are focused on the impact on this year's state budget, the larger impact will be the creation of a large class of new millionaires in California. Aside from paying capital gains taxes when they cash in their stock, they will likely significantly upgrade their lifestyle by turning in their old hoodies for new hoodies, and by spending more and making real estate purchases. The impact of this IPO on California's beleaguered economy, already rebounding faster than many states, can not be overstated.
Meanwhile, the Taiwanese animators ask if Facebook is overvalued.
BEST NOT-SO-SUPPORTING ACTOR: Yesterday, Lite Gov Gavin Newsom was a guest on Michael Krasny's Forum program on KQED. On it, he hints that Jerry Brown lacks a vision for greatness and instead is focusing on minutiae. David Siders writes in the Bee "Brown and Newsom have a distant relationship, and about the warmest thing Newsom would say about Brown today is that he is a 'unique person' and 'in many respects a brilliant political tactician.'"
YOU SPIN ME RIGHT ROUND: Oh, the press releases just keep coming. They have all been assigned to my crack staff of 0.01 FTE. In particular, there is plenty of warring press releases among the Democrats running for CD02. Anyway, here's how I've read the reports:
DISPROPORTIONATE? The California Budget Project released a report yesterday suggesting that women are paying a bigger price of the state's budget cutting.
THE MESS: California Watch's Kendall Taggart looks at the legal and financial morass left from yesterday's demise of redevelopment.
STRATEGIC ADVICE: George Skelton jumps on the bandwagon of California GOP critics, calling the party "out of sync."
BETTER THAN TYLENOL PM: Department of Finance has posted the budget trailer bills. Yeah, really, we have to read that stuff.
TOP HEADLINES ON AROUNDTHECAPITOL.COM AS OF 12:00PM
Tobacco Tax Backers Launch Campaign With Swipe At Opponents
Torey Van Oot @ blogs.sacbee.com
Supporters of a tobacco tax slated for the June primary ballot launched the opening salvo today of what is expected to be a multimillion dollar campaign, framing their effort as a battle to beat moneyed "big tobacco" interests.
California Sees Record Lobbying -- More Than $285 Million Spent
Businesses, unions and other special interests set a record for spending on lobbying state government in California last year-- more than $285 million. Education, healthcare, assistance to a proposed NFL stadium in Los Angeles and a proposal to dissolve the...
New health law delivers $2.1 billion in savings on drugs for seniors
Noam N. Levey @ latimes.com
In the first full year of the new healthcare law, 3.6 million people in the government Medicare program saved $2.1 billion on prescription drugs in 2011, the Obama administration announced Thursday.
Gavin Newsom Suggests Jerry Brown Lacks 'Vision For Greatness'
David Siders @ blogs.sacbee.com
Lt. Gov. Gavin Newsom, who pops up from time to time to snipe at Gov. Jerry Brown, suggested today that his fellow Democrat lacks a "vision for greatness" and is "not necessarily the most collaborative executive," and he criticized social service cuts Brown has proposed.
California Court Reorganization Bill Hits Snag In State Senate
Although it squeaked by in the Assembly this week, controversial legislation to revamp budget decisions for state courts has been shelved for the immediate future in the Senate. "The Senate has no near-term plans to refer that bill to committee''...
End Of Redevelopment Agencies Traps $4b In Local Government Loans
More than 400 redevelopment agencies were officially shuttered yesterday, leaving a trail of uncertainty – and a potentially staggering debt load.
Fundraising Totals For Hot California Legislative Contests
Torey Van Oot @ blogs.sacbee.com
Early money is already flowing into the campaign coffers of candidates running for legislative seats across the state.
Ruling On Redistricting A Wake-up Call For California GOP
George Skelton @ latimes.com
The 7-0 ruling shows how out of sync the party has been. Its problem is not the shape of new districts but the size of a shrinking membership.
Facebook IPO Triggers California Budget Fracas
Nicholas Riccardi @ latimesblogs.latimes.com
Facebook IPO starts positioning on Gov. Jerry Brown's California budget. Republicans use Facebook IPO to take a swipe at Gov. Jerry Brown's California budget.
Budget Dreams And Dangers Of Facebook's Ipo | Capital Notes -- From Kqed's John Myers
And the bottom line: the eventual capital gains from the 2012 Facebook IPO will no doubt help balance the state's books. But the smart bet is that it won't be enough to stave off the vast majority of the tough choices that lie ahead. Wednesday's IPO announcement by the Menlo Park company is the jumping off point of my budget story on this morning's edition of The California Report -- specifically, the impact on state finances.
Berman, Sherman Among Those Reporting Campaign Funding
Jean Merl and Anthony York @ latimes.com
Contributions are rolling in for contestants in some of the state's hottest races for Congress and the Legislature, according to campaign reports filed with federal and state authorities.
Brown's 'vision For Greatness'? Newsom Can't See It
Lt. Gov. Gavin Newsom, who pops up from time to time to snipe at Gov. Jerry Brown, suggested Wednesday that his fellow Democrat lacks a "vision for greatness" and is "not necessarily the most collaborative executive," and he criticized social service cuts Brown has proposed.
David Siders @ blogs.sacbee.com
Gov. Jerry Brown said this evening that California is losing manufacturing at a rate no faster than the rest of the country, telling the TV show host and former Michigan Gov. Jennifer Granholm the problem is a national one.
Court won't release CA gay marriage trial videos
LISA LEFF, Associated Press @ utsandiego.com
A federal appeals court refused Thursday to unseal video recordings of a landmark trial on the constitutionality of California's same-sex marriage ban but said it needed more time to decide if a lower court judge properly struck down the voter-approved ban.
Gay Marriage Trial Video Will Remain Sealed, Appeals Court Rules
A federal appeals court refused Thursday to make public the video of the Proposition 8 same-sex marriage trial, a victory for opponents of gay marriage. A three-judge panel of the U.S. 9th Circuit Court of Appeals said the video from...
Proposition 8 trial video will remain sealed, appeals court rules
Maura Dolan @ latimes.com
A federal appeals court refused Thursday to make public the video of the Proposition 8 same-sex marriage trial, a victory for opponents of gay marriage.
Refusal To Fund California Prison Construction Could Delay End Of Federal Oversight | 89.3 Kpcc
California's Deuel Vocational Institution is a state run prison that's long overdue for a makeover.
Brown Names Burton's Daughter To State Board
Josh Richman @ ibabuzz.com
Gov. Jerry Brown today nominated Kimiko Burton â daughter of California Democratic Party Chairman John Burton â to the State Personnel Board.
End of redevelopment agencies traps $4B in local government loans
More than 400 redevelopment agencies were officially shuttered yesterday, leaving a trail of uncertainty âÂÂ and a potentially staggering debt load.
Facebook Ipo To Enrich State Treasury. Like :: Fox&hounds
There is no certainty when or how much the IPO will bring in. Building budgets around an anticipated flood of revenue could put the state in the same fix as the current budget that was balanced on a supposedly miraculous new $4 billion in revenue that did not appear.
AM Alert: No shortage of money in California's primary battles
The Assembly has set its floor session for 9 a.m., with the Senate meeting at 10 a.m., but lawmakers under the dome may have more than legislation on their minds.
California Lawmakers Cut Ties With Komen Over Funding Decision
Torey Van Oot @ blogs.sacbee.com
Several California lawmakers are severing ties with Susan G. Komen for the Cure over the breast cancer foundation's decision to stop providing breast cancer exam funding to Planned Parenthood.
Calif. Lawmakers Cheer Facebook Ipo, See Windfall
SACRAMENTO, Calif. -- Gov. Jerry Brown's administration and state lawmakers on Wednesday hailed Facebook's much-anticipated plans for a public stock offering as a potential windfall for California's cash-strapped treasury, while some already say the extra revenue should go to preventing cutbacks to public schools.
Media Moguls Headline Calif. Super Pac Giving
Californians gave more than $12 million to super political action committees in 2011, bolstering the campaigns of President Barack Obama and his Republican challengers by taking advantage of new campaign finance rules that have been plagued by controversy.