in from time to time, we were able to move forward with no significant
change in taxation until last year. And then the unavoidable occurred.
We found that taxes at the rates existing no longer were adequate
to support our services at standards and at levels we had set. Re-
luctantly, the 1958 General Assembly approved an increase in the
sales tax and the income tax from 2 per cent to 3 per cent. As a
consequence, approximately $52, 000, 000 has been added this year
to the tax load of our citizens. That amounts to more than $17 for
every man, woman and child in the State. Furthermore, the picture
of this extra tax burden is incomplete if we fail to take into con-
sideration new levies imposed in many instances by local govern-
ments confronted with financial difficulties similar to our own.

These conditions forced me to the conclusion that no new taxes
should be imposed this year it it were at all possible to maintain
our State services at a reasonable level without them. The first
indication to me that this could be done appeared a little more
than a month ago in a report by the Bureau of Revenue Estimates
on the anticipated revenues for the coming fiscal year. This agency
estimated that our revenues for fiscal 1960, together with estimated
transfers from other funds, would amount to $201, 029, 593. At the
end of the 1958 fiscal year—last June 30—it was estimated that the
State would have general fund surplus in the amount of $3, 326, 972
to help finance fiscal 1960. But the Bureau revised this estimate up-
ward by $607, 273, which, together with current-year reversions and
other adjustments, leaves us with an estimated surplus of $4, 462, 231. 94.
Thus, we have available for 1960 general fund requirements $205, -
491, 824.

I am recommending to you general fund appropriations for next
year totaling $204, 801, 428, with a deficiency appropriation of $353, 691
for the current year, certified as necessary to cover the State's con-
tribution to social security for State employees and teachers in the
counties and Baltimore City. Deduction of the recommended net
appropriations from the estimated resources available leaves us with
an estimated surplus at the end of the 1960 fiscal year of $836, 705.

It is obvious that the limited amount of money available placet!
restraints upon our capacity to spend. Reductions in the appropria-
tions requested by the various departments and agencies were neces-
sary in most instances.

The fiscal plan I am submitting to you calls for strict economy
in the operation of our government. But as I see it, it is not a pro-
gram of austerity. No service or program that I know of is impaired