California, May 31 (ANI): California's budget could take a hit if Facebook's stock price keeps sliding following the social networking giant's disastrous Initial Public Offering performance, according to a report.
Governeor Jerry Brown was counting on about 1.5 billion dollars in income taxes related to the company's IPO to help patch the state's swelling 15.7-billion dollar deficit.
But if the stock price remains low, a haul that big becomes unlikely, the Los Angeles Times reports.
According to the paper, the Brown administration pegged the stock at 35 dollars a share, lower than its 38 dollars starting point, but significantly higher than the 28.19 dollars per share at the close of trading on Wednesday.
Jason Sisney at the nonpartisan Legislative Analyst's Office, which provides budget advice to lawmakers, said tax revenue from Facebook 'could be hundreds of millions of dollars less than has been projected'.
Sisney said that if the stock price does not stay at its current level, then there are other ways for the state to make up the difference.
For example, the sale of Facebook stock would increase a California resident's tax bill, he added.
The paper quoted Sisney, as saying that the bigger question for the state budget is how the overall stock market performs.
"That could sway tax revenue by billions, not millions," Sisney added. (ANI)