Facebook’s eagerly anticipated Wall Street debut could pump nearly $2.5 billion into California coffers over the next five years, the state’s top budget analyst said Monday.
It was the first public prediction by a state official of what the social networking giant’s initial public offering could mean for California’s bottom line.
The revenue would come partly from taxes on the sale of stock, as a lucky few cash in their Facebook holdings. A report from Legislative Analyst Mac Taylor said that could lead to “extraordinary one-time changes” that drive up tax receipts from newly wealthy residents.
Facebook filed for a $5-billion IPO earlier this month, smaller than some predicted but still the biggest yet for an Internet company. If the IPO occurs this spring, the state could get a $500-million boost in the current fiscal year, which ends June 30, Taylor wrote.The real payoff would come after that, with an estimated $1.5-billion windfall in the 2012-13 fiscal year. An additional $450 million is expected to trickle in over the following three years, according to the report.
This is one time money and I am confident that California Governor Jerry Brown and his minions in the Democratic Party controlled Legislature will squander it.
The California Legislature just cannot bear to cut entitlement programs to their many constituents.
Interestingly enough the amount of money the State of California will receive from Facebook this year won’t be making even a dent in the $8 plus Billion deficit.