1. West Virginia - State Government Budget Forecast Presented by: Mike McKown, Director State Budget Office December 2009

2. Current National Notes The National Debt has soared past $12 Trillion. Federal funds replace sales taxes as the largest source of money for states. National household income is projected to fall almost 9% over 2008 & 2009. States’ revenue growth the next 5-10 years – 1/2 the average of the past 30 years. In fiscal 2009, states reduced General Fund by 4.8%. 42 states made mid-year cuts. In fiscal 2010, states reduced General Fund by 4.0%. 35 states below FY 2009 level. FY2009 & FY2010 - First time that state spending has declined in back to back years. Worst budget years for states are the 2 years after the national recession is over. 2

3. 3

4. State of West Virginia Major Funding Needs State Capitol Complex: Buildings 5,6,7 renovations $85,300,000 Infrastructure - Drinking Water & Wastewater: 21% of WV population is not connected to public water supply; Current needs to assure reliable supply of safe drinking water.$724,000,000 45% of WV population is not connected to public wastewater system; Current needs for sewer infrastructure. 1,800,000,000 Sewer Overflow abatement 1,100,000,000 Total Infrastructure needs $3,624,000,000 Agencies' Projected Major Capital Outlay Needs for FY 10 Additional Needs above FY 09 Funded Amounts $310,000,000 New State Accounting System $60,000,000 Corrections (Prison Overcrowding Recommendations)$250,000,000 Major Highway Construction Needs $25,000,000,000 Bridge Replacement (over 60 yrs old) $2,500,000,000 K-12 School Buildings (10 year plans) $1,700,000,000 Old Workers' Comp (@ 6/30/08) $1,507,000,000 Unfunded Liabilities in Retirement Systems (@ 6/30/08)$4,968,707,000 OPEB (@ 6/30/08) $6,107,823,000 Total State Needs $46,112,830,000 4

5. 5

6. 6 State of West Virginia – Revenue Sources

7. 7

8. 8