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Facebook Blamed as California Revenues Miss Target

SAN FRANCISCO – California’s tax revenues in November fell more than 10% short of estimates in its budget partly due to lower than expected collections from Facebook share sales, according to State Controller John Chiang.

State revenues came in $806 million below projections in this fiscal year’s budget, mainly due to personal income taxes coming in 19%, or $842 million, below expectations, the controller’s office said in a report Friday. 

Chiang said in a statement more tax revenue stemming from the initial public offering of Facebook stock came in October rather than in November.

“November’s disappointing revenues stand in stark contrast to recent news that California is leading the nation in job growth, has significantly improved its cash liquidity to pay bills, and even long-distressed home values are starting to inch upward,” Chiang said.

Corporate tax receipts also fell for the month compared to the budget, dropping 212%, or $187 million, the controller said.

Last month, Chiang’s said state revenues in October rose $207.9 million, or 4.4%, above projections in the fiscal 2013 budget resulting in spot-on projections for the fiscal year-to-date.

The Department of Finance’s report for October showed similar numbers, with revenues rising $208 million above the month’s forecast, however it said fiscal year-to-date revenues were still $176 million below the budget forecast.

The state’s nonpartisan Legislative Analyst’s Office said in a report last month it forecasts the state will face a $1.9 billion budget deficit for the next fiscal year.

The yield premium investors pay for California’s general obligation bonds versus triple A rate debt has been tightening amid fiscal reforms by voters and state officials over the last two years, and as Gov. Jerry Brown limited debt sales over the same period.

California’s GO bond yield spreads from the MMD triple-A scale, one measure of how investors perceive the risk of default of by an issuer compared to top rated debt, had fallen 66 basis points, or 64%, to 37 basis points on 10-year maturities through Friday from a year earlier.

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