The following commentary comes from an independent investor or market observer as part of TheStreet's guest contributor program, which is separate from the company's news coverage.

By Tom Taulli, InvestorPlace Writer

NEW YORK ( InvestorPlace) -- With a gross domestic product of $1.9 trillion, California would be ranked the world's eighth largest economy if it were a country. But with the real estate bust, California has certainly suffered over the past few years, with its dismal 11.3% unemployment rate and its projected $9.2 billion budget shortfall.
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  • Despite all this, there's some optimism. After all, California's Silicon Valley is still a source of massive wealth creation. Just in the past year, companies such as Zynga ( ZNGA - Get Report) and LinkedIn ( LNKD) have gone public.

    And the region has been a nice source of tax revenues since employees have started to cash out their stock options. The California capital-gains tax rate is 9.3% (with an extra 1% for millionaires).
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  • But interestingly enough, this year may see an even bigger windfall of tax revenues --- from the Facebook IPO. In fact, according to the most recent California budget analysis, the offering could result in "hundreds of millions of dollars" in tax revenues.
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  • No doubt, it would be a nice boost, but it would be far from a panacea. California still must deal with a host of issues, including pensions and health-care spending.

    Still, a comeback in IPOs could be an important catalyst to getting the state back on track.

    Tom Taulli runs the InvestorPlace blog IPOPlaybook, a site dedicated to the hottest news and rumors about initial public offerings. He is also the author of All About Short Selling and All About Commodities. Follow him on Twitter at @ttaulli.

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  • This commentary comes from an independent investor or market observer as part of TheStreet guest contributor program. The views expressed are those of the author and do not necessarily represent the views of TheStreet or its management.