appropriation of $554, 678, 069, of which amount $273, 146, 408 repre-
sents appropriations from general funds. A balance of revenues and
expenditures, you will note, is achieved without a change of the tax
structure.

I set a goal at the beginning of this term not to raise taxes for
State Administration purposes during the four years. And now as we
approach the end of the term, it is most gratifying to me to be able
to report that this goal will be attained. To be sure, minor tax ad-
justments were made last year, but as you are well aware, all the
revenues therefrom went to Baltimore City and the counties to
ease their own tax burdens.

In this connection, I should like to give you some figures which
I think are significant—significant in that they illustrate this admin-
istration's abiding concern for the financial well-being of our political
subdivisions. In fiscal 1959, the last year of the previous administra-
tion, general funds distributed to the subdivisions amounted to
$92, 229, 000, or 50. 3 per cent of the total general fund budget for
the year. In the budget which I am submitting for next year, this
distribution of funds to local governments has jumped nearly 70 per
cent, to $155, 800, 000, or 57 per cent of the total general fund budget.

While the amount of general funds allotted to local governments
rose by 70 per cent, that used for State Government purposes increased
by only 28. 5 per cent.

Now, while it has not been necessary to modify our tax program
to balance the budget for next year, I have found it necessary to
use $6, 000, 000 of the revenue deficiency fund which we so providently
set aside two years ago for harder days we were sure would come.
The remaining half of this fund, under my plan, will stay as it is,
for, at the current rate of spending, and unless there is a major
upsurge in revenue yield over current forecasts, this money will be
needed to help finance 1964 operations.

In brief, we will use half the money we put aside for the rainy
day we prophesied, which is now upon us, and we will save the
rest for the rainier weather ahead which anyone not totally blind
to reality can foresee.

Another highlight of the budget which I would call to your atten-
tion is the fact that, after deducting an amount for salary adjustments
of State employees, approximately 83 per cent of the general fund
increase applies to education, health, welfare and correction—areas
in which your state government ministers to human needs, and which
may be considered as an investment in human resources.

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