The lawmakers of California and Governor Jerry Brown’s administration all praise to the most anticipated plans of Facebook to make the IPO, which can be a possible windfall for the state which is currently lacking sufficient funds. However, others stated that the extra income should go directly in the prevention of budget reduction for public schools financing.
H.D. Palmer, the finance spokesman of the Brown’s administration has even stated that if the amount is as big as it’s being billed, then on behalf of the grateful California, he will go to the founder of Facebook, Mark Zuckerberg’s house, to either mow his lawn or clean his windows.
In the estimation made by the nonpartisan of the legislative analyst’s office in California, they are expecting to receive hundreds of millions of dollars or even more than a billion in just a short term from the investors of Facebook and the employees profiting on the transactions of the stocks. This huge amount will surely carry the whole state government that is in need of bountiful blessings to compensate the shortage of a fund of about $9.2 billion.
On Wednesday, the Republican minority leaders Connie Conway and Bob Huff made a statement that they both strongly believe that the tax incomes of the state in relation to Facebook’s IPO should be used for educational needs. The state will cut off the public education’s budget to about five billion dollars if the people will agree to Brown’s administration budget proposal.
In accordance of the joint statement released by Conway and Huff the state should be focused more on providing protection to their public school students, in this connection both opted that this additional income should go to the educational fund of the state. This is in contrast with governor’s proposal to cut off the financial aid on education to pay the debts of the state.
A Democrat from Sacramento warned that the tax income might not be received by state’s treasury and will just be reaped off from those that will benefit Facebook shares. However, the democrats are utilizing the Facebook effect to provide delay with the budget proposal of the governor to cut the social programs.
The general fund of the state of California is hugely dependent on the income tax and those taxes from the capital gains. With the Facebook stock sales, the state will surely see a bump with the wealth that the state will be earning with accordance with this project.
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