Estimated surplus June 30, 1944................................. $6,062,671.10

Estimated receipts in fiscal year

ending June 30, 1945.................... $24,543,546.00

Estimated expenditures in fiscal year

ending June 30, 1945, including

transfer of $475,100.78 to Annuity

Bond Fund...................................... $26,698,030.78 2,154,484.78*

Estimated Surplus June 30, 1945................................ $3,908,186.32

* Excess of estimated expenditures over estimated revenues.

The amounts shown for expenditures in the fiscal years 1944 and
1945 include the bonus payable to state employees and school teach-
ers; the amount necessary to supplement the budgets of state agen-
cies to put into operation the Standard Salary Plan for state em-
ployees, and appropriations of $1,000,000.00 in each year for the
War Emergency Fund and the General Emergency Fund. The sum of
$2,000,000.00 has been reserved f9r post war construction. After giv-
ing effect to everything entering into the surplus account we find that
at June 30, 1945, it is estimated there will be available $3,908,186.32,
which amount includes the working fund of $2,000,000.00 which
it is customary for the State to maintain, leaving the amount
of $1,908,186.32 clear of any obligations whatever and subject to
use for tax reduction under the provisions of Chapter 709 of the Acts
of 1943 as may be determined by the Board of Public Works.

Chapter 764 of the Acts of 1943 levies state, taxes for the years
1944 and 1945 of 18 1/2c and 17c, respectively, but it is contemplated,
as represented to the General Assembly at its 1943 Session, that the
rate will be reduced to 12c for each year. This reduction is made
possible by use of that part of the surplus in the Annuity Bond Fund
which could be devoted to the purpose, supplemented by the sum
of $475,100.78 to be transferred from the general funds surplus.

The bonded indebtedness of the State at June 30, 1943, is
$33,619,000.00. The State will issue in September 1943 the re-
maining part, or $451,000.00, of the General Bond Issue of 1941.
The bonds to be redeemed during the biennium ending June 30,
1945, amount to $8,972,000.00, reducing the bonded debt at that
date to $25,098,000.00.

I have limited my reference in this letter of transmittal to the two
items of compelling interest in the State's fiscal picture; namely,
the surplus and the bonded debt. However, you will find full in-
formation as to the many items making up the complete picture in
the schedules which follow.

We are appreciative of the cooperation received from the various
agencies of the State in our work of administering its fiscal affairs
and we have endeavored to be as helpful as possible to everyone in
the solution of problems which have arisen during the year.

Respectfully submitted,

J. MILLARD TAWES,

Comptroller.