before he became a member of the Board of County Commissioners. It
was his idea that I speak to you on the topic, "Disposition of New Sales
Tax Revenue. " I agreed.

By "New Sales Tax, " we mean, of course, not some new tax scheme,
but the tax adjustments that were made last year to finance a new policy
and program of the State to give additional financial assistance to local
governments. I welcome the opportunity offered me to try to shed some
new light on this subject, for, although it is a relatively simple situation,
for the most part it has been widely misunderstood.

In the first place, I do not believe there has been general public
acceptance of the very obvious fact that no tax adjustment was needed
last year for State administration purposes, and not one cent of the
revenue derived therefrom is being used for State administration pur-
poses. All of the money that the State collects from the increased sales
and cigarette taxes which were imposed goes directly to the twenty-three
counties and the City of Baltimore to aid them in their own financial
obligations.

I am not implying, of course, that you who are experts in the field do
not know this. But I think it is a proposition that is well worth repeating.

In my address at the opening of the General Assembly this year, I
cited what I considered to be some significant figures to indicate the
State's growing and continuing concern with the financial well-being of
its subdivisions. I think these figures are worth repeating here.

In the budget for the fiscal year 1959—the year that immediately
preceded my accession to office—general funds distributed to the sub-
divisions amounted to $92. 2 million, or 50. 3 per cent of the total general
fund budget for that year. In the budget the general assembly is now
considering—for fiscal 1963—I have recommended payments to the
counties and Baltimore City totaling $155. 7 million, representing 57 per
cent of the total general fund budget. In other words, since I have been
Governor, these State funds to help finance local governments have been
increased by nearly 70 per cent.

A sizeable part of that increase is a result of the new policy and pro-
gram I referred to earlier—the initiation of the James Committee plan
to aid the subdivisions, which is the main part of our discussion here
today.

During the latter part of last summer, my office undertook to conduct
an informal survey to determine just how the governments of Baltimore
City and the counties intended to use the additional money they would

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