SACRAMENTO, Calif. — What’s good for Facebook and its employees could be very good for California’s treasury.
If the Menlo Park company goes public this year, as many have speculated, the state stands to reap hundreds of millions of dollars in capital gains taxes from Facebook investors and employees profiting from stock transactions. That could bring a much-needed windfall to a state government facing a $9.2 billion deficit.
In calculating how much revenue the state can expect in the next year or so, the nonpartisan Legislative Analyst’s Office released a report that considered historical income trends but also budgeted for a revenue bump on the assumption that Facebook and some other California companies will go public.
An initial public offering from the Silicon Valley social networking giant is the most anticipated, with the legislative analyst saying the company could issue $10 billion worth of stock. California taxes the capital gains from stock sales.
“In the coming months, the state’s revenue forecast will need to be adjusted somewhat to account for the possibility of hundreds of millions of dollars of additional revenues related to the Facebook IPO,” Legislative Analyst Mac Taylor wrote in the analysis of Gov. Jerry Brown’s budget proposal, released Wednesday.
Democrats are already using the so-called Facebook effect to delay the governor’s proposed cuts to social programs.