From Paul Kedrosky on Bloomberg:

As most of you have undoubtedly noticed, Facebook is trading at a $67 billion valuation on the secondary market. It is likely to go public in 2011-12, or thereabouts, as will almost certainly a host of other California-based tech high-flyers.

That will have implications in 2011 and 2012 for perpetually financially flailing California. Why? Because California’s budget is hugely levered to capital gains and stock options, as the following California LAO figure shows. Personal income tax is the largest source of state income, and the most volatile component of that source is stock options and capital gains.

When personal income is doing well, California does well...

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