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lems. Whoever the proper state official is,
the right one, that is the one we will put in
and if it is not the Comptroller or if he
does not even have a name, we will use
the language which will clearly indicate
what we mean.
So now let me pass that for a moment
by saying that we pledge irrevocably the
full faith and credit of the State. No spe-
cific real estate tax is then required and
the principal official of the State in charge
of fiscal affairs is the one who must provide
the money as it is provided by the General
Assembly in the budget. If it is not in the
budget, then the money can and will be
taken from the money that comes in. But
the State does not immediately go out of
the taxing- of real estate because we have
pending a great deal of bonding payment,
principal and interest over a long number
of years yet to come, up to 15 years; until
that is all paid out, the counties and the
city will not be able to feel that the State
has any turned over to them all of the
power to tax real estate, but we go a step
further. We say the State shall not give
up its right to tax real estate. The State is
giving up no powers to tax. We are just
hoping1 that by this device which is good
business, that the State may find itself well
able to get out of the taxing of real es-
tate, but mind you, the State does not,
N-O-T, does not give up its powers of
taxation.
Now, we come back to another aspect of
this recommendation because now we say
that unless the law which creates this ob-
ligation includes the irrevocable pledge of
the full faith and credit of the State, the
obligation shall not be considered an in-
debtedness of the State. The terms of this
section shall not apply, but if it does in-
clude such a pledge, then it is secured by
the unlimited taxing power of the State
and it is subject to the terms of this sec-
tion. So that before this becomes applicable,
that law creating this bonding indebted-
ness must pledge irrevocably the full faith
of the State and if it does not, then it is
not an obligation of the State of Maryland.
DELEGATE BENNETT: Mr. Chair-
man —
(Second Vice P reside n I. William James,
assumed the Chal)'.)
DELEGATE JAMES (presiding) : For
what purpose does Delegate Bennett rise?
DELEGATE BENNETT: Just to ask
the Chairman to permit an interruption.
DELEGATE JAMES (presiding) : Yes,
indeed.
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DELEGATE BENNETT: Why would
the legislature not wish to pledge the full
faith and credit to the State under any
circumstances?
DELEGATE SHERBOW: I could not
conceive of their not doing it if this con-
stitution is passed but there will be many
occasions which I will discuss in a moment,
Delegate Bennett, when the State does not
want to pledge its full faith and credit for
those issues which are not the kind of is-
sues where the State should. For example,
what has come to be known as revenue
bonds where the people who buy the bonds
are looking not to the State of Maryland,
but to that which is being created, a
bridge, a tunnel or a particular highway
and the revenues coming from that particu-
lar object, that is where they are looking
for their money, that is where they expect
it, that is where they will get it and there-
fore, the State does not pledge its faith
and credit because there are, and I am
coming to it, but I will answer it since I
said I would, these different classifications
of bond.
Now, we wanted to be sure that there
would be no misunderstanding that this
section does not preclude the issue of rev-
enue bonds. On the contrary, we make it
abundantly clear that this can be done and
that when it is done, you look to that which
is the source of your payment but it is not
the full faith and credit of the State.
Where it is, of course, a state bond issue
pledging the full faith and credit of the
State, then of course this means that every
resource we have is behind it, but there has
grown up and will continue to grow up
all kinds of objects for state construction
that at the moment we may not even be
able to dream up where the revenues will
take care of the payments of principal and
interest and the State very probably will
continue to say, as it has in the past, as it
does now with State roads and with
bridges: you look to the revenues not to the
full faith and credit of the State.
Now, it is the pledge of the unlimited
taxing power of the State. I have discussed
with you if we do not make the payment,
the comptroller is there to make sure, or
whoever the official is, that it will be paid.
Now, one of the other objections that
occurred in days past, which circumscribed
the method of bond issues is a requirement
that the State of Maryland will not incur
bonds or bonded indebtedness that goes be-
yond a period of 15 years. Now, on this
subject, there is a Minority Report and
undoubtedly some amendments. I want to
discuss this quite fully with you.
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