California is hoping its wealthiest residents will turn its budget black — and keep it there. The Golden State gets six out of every ten dollars of revenue from income tax, and thanks to a November ballot measure pushed by Governor Jerry Brown, it’s going to get even more, with new rates created for individuals making over $250,000.

But experts say that heavy reliance on income tax makes California’s budgets especially susceptible to turmoil in the financial market. Douglas Offerman, of Fitch Ratings, calls the reliance on personal income tax “a double-edged sword”.

IPOs like Facebook are gold mines for the nation’s most populous state. But California is equally susceptible to market crashes. The state is just now pulling out from multibillion dollar deficits incurred by the financial collapse. Add another hurdle: Many taxpayers in California are employing strategies designed to shift some significant portion of their income to low or no-tax states.

Rich Tax Puts California on Risky Path

Profit Shifting to Reduce Taxes