In addition to Maryland's general obligation bonds, other long-term obliga-

tions of the State at the end of fiscal year 1981 included $739,505,000 of Trans- •
portation Bonds, which are serviced solely from certain transportation revenues;
$565,690,000 of Revenue Bonds which are serviced solely from certain enterprise

revenues; and $402,422,000 of pension liabilities which represents the excess of
retirement costs over retirement expenditures since 1978 and are being funded on
a long-term basis through annual contributions, principally from general revenue

sources, OUTLOOK

Revenue prospects for fiscal year 1982 are encouraging, but will be tempered by
current recessionary tendencies in the U.S. economy; the cutback of over $50,000.000 in
funding due to federal budget cuts; and the pass-through of revenue reduction measures
embodied in the Economic Recovery Tax Act of 1981, which will reduce revenues by
$8.300,000 during this year and by as much as $33,700,000 during fiscal year 1983.
Despite these factors, revenues for fiscal year 1982 are expected to grow at an amount
approximately equal to the growth achieved in fiscal year 1981.

Revenues of the Transportation Trust Fund have suffered in recent years from a
decline in motor fuel consumption a"nd slow growth in vehicle sales and registration.
Infusions of new revenues from the motor vehicle titling tax and a portion of the general
fund share of the corporate income tax have been used to supplement the other revenues.
Measures will be proposed to the 1982 General Assembly which, if enacted, will provide
additional revenues in fiscal year 1983 and put the Fund on a sound financial basis.

New bond authorizations to support the 1982 capital budget amounted to
$174,418.000. Maryland should again achieve favorable interest rates on bond
sales because of its financial disclosure and reporting practices, independent audit, and
generally strong financial position.

In the past. Maryland's diversified economic base has provided a moderating
influence in times of national economic downturns. This stabilizing factor, together with
Maryland's demonstrated leadership in fiscal responsibility, will permit the State to
continue to meet the needs of its citizens and preserve its strong financial condition.

I will be pleased to furnish additional information on the State s finances upon
request.