With Google stock off nearly 20% in the last three weeks, can cuts to the California state budget be far behind?

Capital gains on GOOG have been credited with boosting California’s tax collections. Other technology and new-media firms have also done their part. Dan Weintraub wrote recently that

$5.5 billion in unexpected tax revenues have flowed into state coffers. … Those revenues reflect a resurgent California economy, with high-tech giants such as Google and Yahoo leading the way, old standbys such as Intel chipping in and thousands of smaller businesses doing their part. …

Since 2002, taxes on capital gains and stock options have increased from an estimated $5.2 billion to $11.3 billion, and are projected to climb to $12 billion next year.

That run-up is similar to what happened between 1998 and 2000, when taxes collected from those same sources jumped from $7.5 billion to $17.6 billion in just two years.

If Google isn’t going to hit $500 any time soon, what can a state desperate to spend windfall gains do?

We suggest creating more windfall gains for California residents. For instance, stop enriching Microsoft’s m/billionaires and the State of Washington and ban Windows XP from all retail outlets in the state, to be replaced by California-based Apple’s OS X (running on California-based Intel’s chips). Create more capital-gains rich acquisitions like Pixar / Disney (both in-state). Make every resident go to the Yahoo home page once a day and read the ads.

And if every school-aged child in the state has to spend homeroom clicking through Google ads … well, at least we can call it career development.

Technorati Tags: budget, California, economy, Google

This entry was posted on Friday, February 3rd, 2006 at 11:20 am by A Senior Administration Official and is filed under California Schemin'. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.