The General Assembly, at its 1941 Session, anticipating to some
extent that there would be a generous surplus on hand at Septem-
ber 30, 1941, and feeling that some relief should be given to owners
of property subject to the State tax rate, passed an Act authorizing
the transfer of excess surplus to the Annuity Bond Fund and provid-
ing that the amount transferred should be reflected in a reduction
of the State tax rate. Accordingly, it was determined, after consider-
ing the probable fiscal situation for the years 1942 and 1943, to use
$4, 000, 000. 00 of the surplus existing at September 30, 1941, to give
effect to the mandate of the General Assembly., and this amount
divided evenly between the years 1942 and 1943 permitted reductions
of eight cents (8c) in each year, or a reduction from 22 cents to 14
cents in 1942, and from 20. 75 cents to 12. 75 cents in 1943.

Your attention is invited to statement "MM, " being a summary
of our estimated general fund surplus at September 30, 1942. This
statement shows an estimated surplus figure of $6, 816, 558. 14,
which is made up of a working fund of $2, 000, 000. 00 and unappro-
priated funds of $4, 816, 558. 14. This represents a very healthy
financial condition, but since we will be sailing on troubled waters for
some months to come, with the possibility of our revenue picture
being affected adversely by the war situation, I feel we have reason
to be gratified because of being in a splendid position to absorb
any reasonable shock to our financial set-up.

I will not elaborate on many items of the report which are worthy
of mention, but I do want to assure you that I have endeavored to
make this report as complete and intelligent as possible so that those
who are interested in our state finances will have readily available
whatever information they desire.

With assurances of my desire to cooperate wherever possible, I
remain,

Respectfully,

J. MILLARD TAWES,

Comptroller.