Presented is the first of a series of annual reports designed to tell the community what has been acomplished and what yet needs to be achieved in providing free appropriate public education to the handicapped children of Maryland. The document is divided into the major sections of Philosophy, Goals, Objectives, State of the State, Children, Personnel, Personnel Development, Administration, Financial Resources, and New Directions. The most extensive section, the State of the State, includes information on nature of services provided in the local education agency (LEA), special facilities in the LEA, special interest and advocacy groups in the LEA, and personnel, population, and funding in the LEA. (JC)