Facebook Could Bring State Even Bigger Windfall Than Expected
SACRAMENTO (KCBS) – When Facebook goes public later this week, the sale of the stock may mean an even bigger tax windfall for the state than Governor Jerry Brown had hoped for.
Governor Brown is banking on tax receipts of $1.5 billion from Mark Zuckerberg and other Facebook insiders exercising options and selling shares and as much as $1.9 billion if voters approve the higher tax rates proposed by the governor.
KCBS' Doug Sovern Reports:
Now, legislative analyst Mac Taylor said that figure could be $2.1 billion or even more because Facebook is raising its IPO price.
"This is a very difficult thing to predict. We came up with estimates in February, giving it our best shot," said Taylor. "The administration could not have included that in January. They have now included some numbers in their forecast for Facebook. We're a little bit higher than they are."
Taylor is assuming the stock starts trading at $38 a share and goes up to $45 within six months.
The stock could go much higher than that or lower, so he said that it is tough to know exactly how much money will come in to help balance California's budget.
But Taylor projects that 20 percent of the state's personal income growth in 2012 will be related to Facebook and its IPO making many people much richer.
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