possible to close this gap to some extent. But as long as our rate
of increase in expenditures exceeds the revenue yield, a tax increase
at some point will become necessary, just as it always has in the past.
The one point we should all bear in mind is that surplus funds are
not a resource always available for balancing budgets. In my way
of thinking, it is simply good business management to conserve our
existing resources, not only against the possibility of diminishing
revenues but also against future demands that will inevitably be made
upon the public purse — demands which must be met at some level
of government.

How these demands of the future are to be met, and at what level
of government, is the immediate concern of the Commission on
State and County Finance appointed by me. After making a most
careful study and evaluation of the problem, this Commission has
decided that here can be no substantial revision of the local revenue
pattern under our present tax structure. And thus, with the co-
operation of the College of Business and Public Administration of
the University of Maryland, the Commission has begun a full-scale
study of the tax structure of Maryland at all levels of government.
I am confident that this study will disclose how future governmental
requirements can be met with the greatest equity as between tax-
payers and with the least adverse impact upon our economy. Mean-
while, it is my hope that until the results of this study are made
available to me no one will insist on any drastic or ill-advised change
in the existing pattern.

The time limits of this message preclude any detailed discussion of
the budget I am proposing. You will find departmental programs and
other phases of the budget discussed in considerable detail in my
printed message. Here today I shall confine myself to what I consider
some of the highlights of the financial plan I am recommending to
you.

Earlier, I mentioned, in passing, allowances which have been made
for state employee salary increases, a measure by which I hope to
improve the quality of the state's civil service and reward the men
and women employed in our state government for loyalty and pro-
ficiency. In combined general, special and federal funds, these salary
increases will total an additional expenditure of $4, 400, 000. From the
general fund, I am proposing an allotment of $3, 650, 000, of which
$2, 750, 00 is the cost of recommendations made by the standard salary
board and $900, 000 for longevity increments approved by the general
assembly last year. To this should be added $750, 000 in combined
special and federal funds for state employee salary increases.