On a brighter note, McKown said, state government got through the 16-day federal government partial shutdown relatively unscathed.
"If that had gone on a couple of weeks longer, there would have definitely been some financial difficulties in state government," he told the interim committee on higher education.
West Virginia gets about $4.6 billion a year of federal funding -- about $500 million more than it generates from taxes.
Medicaid, the state-managed health-care plan for the poor, disabled and elderly, alone is a $3 billion-a-year program, with more than $2 billion funded by the federal government, he said.
The federal Medicaid contribution is about $200 million a month, and if the state had to make up that revenue, it would have quickly wiped out the $900 million the state has set aside in the emergency Rainy Day Fund, he said.
"We could have exhausted all the funds we have in a couple of months," McKown said.
The downside, he said, is that Congress didn't resolve the budget impasse last week, but merely postponed it for three months.
"We still have to face that in January. They just kicked the can down the road three months," he said.
Also, he said, there is no way to predict what impact the federal Affordable Care Act and the expansion of Medicaid eligibility to households earning 133 percent of the federal poverty level will have on the state economy.
"We just don't know how those are going to affect the economy. It's the big unknown," he said.
Reach Phil Kabler at ph...@wvgazette.com or 304-348-1220.