Facebook IPO Could Provide Windfall for California Budget
NEW YORK - The expected IPO of social networking giant Facebook, which is likely to be the largest on record for an online company, could boost California’s budget by hundreds of millions of dollars through taxes on capital gains, the state's legislative analyst said in a report, according to Bloomberg News.
“In the coming months, the state’s revenue forecasts will need to be adjusted somewhat to account for the possibility of hundreds of millions of dollars of additional revenue related to the Facebook IPO,” the report from the office of legislative analyst Mac Taylor said, according to Bloomberg.
“It’s just the sheer size of it,” Taylor told reporters, it said. “It could be huge.”
California's revenue forecasters expect that at least several companies will go public each year, the report explained. Facebook reportedly plans to raise about $10 billion in an IPO that is expected to value the network at around $100 billion.
A spokesman for Facebook, led by CEO Mark Zuckerberg, didn't immediately comment.
California Governor Jerry Brown last week presented a $92.6 billion budget for the fiscal year that starts July 1, which includes $4.2 billion in cuts to social programs.
Additional revenue from the IPO of Facebook and other tech firms could soften the blow, the legislative analyst's report said, according to Bloomberg. But broader stock market gains or losses could more than offset any positive impact, it added.