Nov. 9--CHARLESTON, W.Va. -- The Obama administration's two-year, $787 billion economic stimulus package is propping up state budgets and has created or saved several hundred thousand jobs. What happens when the money runs out?

Critics and even beneficiaries of the stimulus expect states might have to raise taxes, cut programs and lay off workers. There will likely be calls for a second stimulus.

West Virginia officials say this state is among those responsibly spending stimulus money by not creating new positions or adding new programs.

"It's going to end," state budget director Mike McKown said. "This batch of money is going to end, and we here in West Virginia, we've told agencies and that's the way we're proceeding, 'Don't go out there and hire employees and stuff. This is only short-term money, it's going to go away.' "

The state is discouraging unnecessary hiring, encouraging efficiencies and asking almost every state agency to take a 5 percent budget cut.

West Virginia is also one of the few states with money to fall back on. Officials said they expect eventually to tap into a $500 million rainy day fund.

Still, when the stimulus money runs out, McKown said, "We fall off a cliff. All the other states are falling off a cliff."

There's already pressure for a second round of stimulus spending to extend the cliff until the economy recovers and state tax revenues perk up. That creates the potential for an endless entitlement program, said Cal Kent, an economist at Marshall University.

"What many of us fear is that stimulus money will become an entitlement which will not phase out but will continue," he said.

Kent said he doesn't think there will be the political will at the state level to either raise taxes or cut services, so there's going to be pressure to make some parts of the two-year federal program permanent.

"A year from now state legislators are going to be looking at an enormous hole and most of them are aware of that now, but haven't really had to deal with that because of the cushioning they've got from the stimulus money," said Tom Evslin, who oversaw the first months of Vermont's stimulus spending for Republican Gov. Jim Douglas as the state's chief recovery officer.

The American Recovery and Reinvestment Act, passed by Congress in February, is intended to help to revive the economy, save or create as many as 4 million jobs and lay a foundation for future growth.

There are certain to be other long-lasting benefits from the program. It puts billions toward road construction, education, building renovations and infrastructure development.