of Governor Herbert R. O'Conor 327

Institutions and Departments. The reduction in the real estate tax and in the
income tax over the three year period will, to that extent, relieve the taxpayers
of the State and thereby ease the burden of other taxes.

There is practically unanimous agreement in the Country that we must
prepare for any eventualities which may result from the present European
conflict. The National Defense Program has been accepted by the public as
necessary to our safety and the continuation of our form of government and
social organization. The cost of this program will be large and the people of
Maryland will be called upon to pay their fair and just share. Their burden of
this taxation will be relieved to the extent that the State Government is now
able to reduce the taxes for the support of its various operations.

As you will note by the budget summary set forth in the budget book, the
general fund revenues for the fiscal year 1942 total $22, 062, 819. 00. The items
making up this total have been conservatively estimated, based upon past ex-
perience, but with the full realization that the present economic activity
might not continue through all of the next two year period. Due to the un-
certainty of world conditions, the future at the moment is not clear, and I feel
the only safe course to follow with respect to State revenues should be on the
conservative side. If to the figure of $22, 062, 819. 00, above indicated, there is
added a surplus as of October 1st, 1941 of $7, 556, 666. 00 and an excess in the
bond annuity account of $196, 886. 00 which, under the law must be transferred
to general Treasury funds, total resources for the fiscal year 1942 in general
funds of $29, 816, 370. 00 are indicated. By the same method and using the
same conservative approach, the total resources for the fiscal year 1943 in gen-
eral funds will be $27, 764, 802. 00.

The State Departments and Institutions requested a total of $49, 062, 543. 00
for 1942 and $50, 437, 806. 00 for 1943 for salaries and operating expenses. I
have carefully reviewed the very many items asked for in all these budgets,
and have weighed the desirability of increased allowances against the impera-
tive necessity of keeping the State Budget at a minimum which will provide
provision for essential services and for carrying out the intent of the existing
statutes. I should like to point out that, in the consideration of the recom-
mended allowances, differentiation should be made between general and special
funds.

General funds are those which are derived from general taxation and which
are available for the support of the general government. Special funds are
those which are dedicated by law for specific purposes; for example, the use of
all funds derived from gasoline taxes and motor vehicle licenses for main-
tenance, construction and reconstruction of State roads, and also the funds
received by the State Game Department which are by law dedicated to game
conservation and propagation.

Obviously, the Governor has no control over the amounts available to
special funds departments. He can and should, of course, control the detailed
expenditures, so that the budgets of these special funds conform to his general
policy, and should make sure that the money is spent in accordance with the
laws creating the revenue and dedicating its use. With certain exceptions,
which I shall point out, the Governor does, however, have control over the
amount recommended for appropriation to the various general fund agencies.