The (revised) Facebook effect on California

Estimating tax receipts from the company's initial public offering is tricky business, which is why there's a large margin of error. But the Legislative Analyst's Office is projecting $2.1 billion in revenue collections over the next 13 months as a result of the Facebook IPO (that factors in a higher per-share price than earlier expected). All told, about one-fifth of the personal income growth in 2012 will be attributable to the offering. From the LAO analysis:

Because the IPO will result in a market capitalization approaching or even exceeding $100 billion and well over $10 billion of income will be generated for California residents, it should result in the state's wages and personal income being higher than they otherwise would be, particularly in 2012, when the bulk of IPO-related income is projected to be received by taxpayers. The administration's May Revision revenue forecast, for example, assumes 4.9 percent personal income growth in the state in 2012. If the Facebook IPO were excluded, this figure would total 4.0 percent.

Much of the tax money will come at the time of the IPO when CEO Mark Zuckerberg exercises options to buy 60 million shares. Six months later, Facebook employees holding restricted stock will be able to sell their shares, and that also will result in a windfall. But the money, while significant, won't come close to paring the state's $16 billion deficit. It's a reminder that anyone who thinks the state can be bailed out by its wealthiest citizens had better take another look at the numbers.