CUMULATIVE SUPPLEMENT DATED MAY 20, 2009, TO APPENDIX I

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Cumulative Supplement, dated May 20, 2009, to Appendix I, dated March 31, 2009

THIS CUMULATIVE SUPPLEMENT SUPERSEDES AND RESTATES ALL PRIOR SUPPLEMENTS TO APPENDIX I, DATED MARCH 31, 2009, WHETHER CHARACTERIZED AS A SUPPLEMENT TO APPENDIX I OR AS A SUPPLEMENT TO A PRELIMINARY OFFICIAL STATEMENT OR OFFICIAL STATEMENT WHICH INCLUDED APPENDIX I, AS SUPPLEMENTED HEREIN.

Please insert the following paragraphs on page I-9 of Appendix I, dated March 31, 2009, immediately above the heading captioned “FINANCIAL RESULTS AND ESTIMATES”.

Changes since the Governor’s Fiscal Year 2010 Budget Message

On April 22, 2009, the State reported that as a result of the enactment of the Fiscal Year 2010 Budget for the State of New York, which includes an increase in certain personal income tax rates, the State of New Jersey expects an estimated $300 million decrease in New Jersey’s Fiscal Year 2010 gross income tax receipts compared to the estimates made at the time of the Governor’s Fiscal Year 2010 Budget Message. This anticipated decrease occurs as a result of the effect of the New York rate increases on the amounts which New Jersey taxpayers, under certain conditions, can claim as a resident credit for tax paid to another state.

On April 30, 2009, the State disclosed revised estimates regarding the expected revenue shortfall from amounts reflected in the Governor’s Fiscal Year 2010 Budget Message for Fiscal Years 2009 and 2010. The State reported that for the period including the remainder of Fiscal Year 2009 and for Fiscal Year 2010 the aggregate revenue shortfall could be between $1.5 billion to $2.0 billion.

On May 14, 2009, the State disclosed a projected $1.2 billion shortfall for Fiscal Year 2009, an amount that was greater than that anticipated for Fiscal Year 2009 at the time of the Governor’s Fiscal Year 2010 Budget Message as a result of weaker than expected tax collections ($1.1 billion), increased spending needs ($26 million), reduction of previously planned contributions to the unemployment insurance fund of $30 million and a reduction of $88 million in federal fiscal stimulus funds which had previously been anticipated in Fiscal Year 2009 and are now expected to be received in Fiscal Year 2010.

Actions proposed on May 14, 2009 to eliminate the $1.2 billion budget shortfall for Fiscal Year 2009 were announced as follows:

Action Amount*

Decreases in spending . . . $300 million Delay in payment of School Aid into FY 2010 . . . 380 million Lapse of appropriations for Business Employment

Incentive Program grants not needed in FY 2009 . . . 70 million Use of FY 2009 opening fund balance . . . 450 million Total . . . $ 1.2 billion

* rounded

Giving effect to such actions, the projected ending fund balance for Fiscal Year 2009 was anticipated as of May 14, 2009, to be $250 million.

Of the $300 million reductions in spending for Fiscal Year 2009 proposed on May 14, 2009, $157 million is a reduction in the State’s contribution to the defined benefit pension funds for Fiscal Year 2009. As a result, the State’s contribution to the defined benefit pension funds will total $106 million in Fiscal Year 2009, representing 4.8% of the actuarially recommended contribution, a significant reduction from the $1.047 billion included in the Fiscal Year 2009 Appropriations Act, which represented 46.9% of the actuarially recommended contribution. The reduced contribution to the defined benefit pension funds will increase the unfunded accrued actuarial liability of the defined benefit pension funds.

On May 19 and 20, 2009, the Treasurer testified before the Assembly and Senate Budget Committees of the State Legislature. At such time, the Treasurer provided updated information regarding the projected budget shortfall

for Fiscal Year 2009 and actions to eliminate the shortfall. He also provided information regarding expected revenue shortfalls for Fiscal Year 2010 from amounts reflected in the Governor’s Fiscal Year 2010 Budget Message.

For Fiscal Year 2009, the Treasurer testified that he anticipated an additional net shortfall of $31 million above the May 14, 2009 projections and proposed actions to deal with such shortfall of approximately $94 million. As a result of such additional changes, the projected ending fund balance as of his testimony on May 19 and 20, 2009, for Fiscal Year 2009 is estimated to be $319 million.

For Fiscal Year 2010, the Treasurer testified that there is now projected a budget shortfall of approximately

$1.6 billion greater than what was anticipated in the Governor’s Fiscal Year 2010 Budget Message. He proposed the following changes from the Governor’s Fiscal Year 2010 Budget Message to address the budget shortfall:

Action Amount

Reductions in appropriations . . . $ 930 million Tax and other revenue increases . . . 400 million Federal Revenue increases . . . 265 million Other miscellaneous revenue offsets . . . 10 million Total . . . $1.605 billion The reduced proposed appropriations include a temporary suspension of all property tax rebates for non-senior citizens ($460 million), a decrease in school aid ($65 million), departmental and debt service savings ($165 million), a decrease in contributions to the defined benefit pension funds ($50 million)¹, a decrease in discretionary municipal aid ($25 million), and decreases in other areas of appropriations ($170 million).

The proposed tax and other revenue increases include an increase in the top gross income tax rate to 10.75% for gross incomes above $1 million ($200 million), an increase in the gross income tax rate to 8% for gross incomes between $400,000 and $500,000 ($83 million), an increase in the insurance premium tax ($66 million) and an increase in HMO assessments ($50 million). These tax and other revenue increases will require the enactment of legislation. The increase in federal revenue includes anticipated waiver applications and added federal fiscal stimulus funds which had not been anticipated in the Governor’s Fiscal Year 2010 Budget Message.

Based on the Treasurer’s updated projections and proposed actions described in his testimony before the State Legislature on May 19 and 20, 2009, the projected ending fund balance for Fiscal Year 2010 will be $508 million as compared to $502.1 million projected in the Governor’s Fiscal Year 2010 Budget Message.

The State is constitutionally required to adopt an Appropriations Act for Fiscal Year 2010 before the beginning of Fiscal Year 2010 which is July 1, 2009, in which anticipated revenues exceed appropriations. The Legislature will consider the Treasurer’s revised revenue projections and the proposed actions to close the Fiscal Year 2010 budget gap as part of its process of adopting the Appropriations Act for Fiscal Year 2010. There is no assurance that revenues will be collected as projected or that the tax and revenue increases and expenditure reductions will be enacted as proposed.

As part of the process of adopting the Appropriations Act for Fiscal Year 2010, various State officials and others may issue statements or reports containing information different from that included in this Appendix I regarding, among other things: the State’s financial condition generally; projected revenues for Fiscal Year 2010;

proposals to increase or decrease revenues from various sources; proposed actions to close the Fiscal Year 2010 budget gap provided by the Treasurer; and the level and nature of various expenditures to be included in the Appropriations Act for Fiscal Year 2010. Many of such statements and reports will reflect the nature of the process of adopting the Appropriations Act for Fiscal Year 2010. It is the current intention of the State not to reflect or respond to any such information or reports by preparing any additional supplements to this Appendix I prior to the adoption of the Appropriations Act for Fiscal Year 2010, unless the nature and effect of such information or reports are of a level of materiality that the State believes requires a supplement to this Appendix I, as supplemented.

1Offsetting revenue losses reduce this to $45 million.

Please insert the following paragraph on: (i) the introductory page to Appendix I, immediately preceding the subheading “Litigation;” (ii) on page I-4 prior to the first full paragraph; and (iii) on page I-7 immediately prior to

“Changes in Fiscal Year 2009 — Effect of Economic Downturn on Fiscal Year 2009 and Fiscal Year 2010.”

The State expects to release the Comprehensive Annual Financial Report for the Fiscal Year Ended June 30, 2008 (the “2008 CAFR”) on or about May 26, 2009. As soon as practical thereafter, the 2008 CAFR will be filed with each NRMSIR, and, upon such filing, will be deemed incorporated by specific reference in this Appendix I and considered a part of this Appendix I. There have been no changes to the 2008 CAFR compared to the Unaudited Financial Statements for Fiscal Year 2008 previously incorporated by reference in this Appendix I, other than the inclusion of the State Auditors’ Opinion and the Transmittal Letter.

Please insert the following paragraph on pages I-51, I-52, I-54 and I-55 under paragraph headed

“Source“below each table.

The June 30, 2008 actuarial valuation reports have been presented to the respective boards for their review.

Please replace the last two sentences of the second paragraph under the caption “FiberMark North America, Inc. v. State of New Jersey, Department of Environmental Protection” on page I-65 of Appendix I, dated March 31, 2009, with the following sentences.

The trial on this matter began on May 4, 2009. At the conclusion of FiberMark’s presentation of its case on May 7, 2009, DEP moved to dismiss the matter. The court granted DEP’s motion to dismiss. FiberMark has indicated that it will file a notice of appeal. The State will vigorously defend this matter.

Please insert the following paragraph on page I-67 of Appendix I, dated March 31, 2009, to replace in its entirety the paragraph captioned “Railroad Construction Company, Inc. v. State of New Jersey, Department of Transportation.”

Railroad Construction Company, Inc. v. State of New Jersey, Department of Transportation. Railroad Construction Corporation, Inc. (“RCC”) filed a complaint on April 21, 2009, in the Superior Court, Law Division, Hunterdon County against the New Jersey Department of Transportation (“DOT”) alleging claims of approximately

$47.4 million by RCC against DOT arising from a construction contract. The construction contract was for the construction of weigh stations and commercial vehicle inspection stations with complex weighing/monitoring and signaling systems to monitor truck traffic located in either direction of Route 78, at Exit 6 off of Route 78 in Greenwich Township, Warren County. Additionally, the commercial vehicle inspection station on the eastbound side was expanded for use by the New Jersey State Police to provide offices, a break room and a jail cell. Associated roadway improvements constructed include 15 sign structures, lighting, drainage, reconstruction of two bridges, and removal and replacement of a third bridge. The old weigh station at Exit 3 eastbound was demolished. RCC alleges that DOT breached its contract on various grounds, including, but not limited to: unanticipated rock removal; unusual weather conditions; errors in the construction documents; changes in the character of the work;

additional work; inaccurate plans to perform milling and paving; acceleration required by DOT; State shutdown during the summer of 2006; JCP&L utility strike; lane occupancy charges; and subcontractor issues. Completion of the project occurred in summer 2008, but the project closeout is not yet fully complete. The State will vigorously defend this matter.

STATE OF NEW JERSEY

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APPENDIX I

FINANCIAL AND OTHER INFORMATION RELATING