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This came into being because the State,
like private individuals, wanted to be sure
that we were going to pay off our debt
within a period of time that was fixed. And
it set 15 years so this meant that whatever
the capital improvements of the State were,
that when you offered the bonded indebted-
ness to get the money to take care of this
particular object you were seeking to ac-
complish, you had to pay it off in a 15
year period. This meant exactly what it
said, you pay it off in 15 years. It does not
mean that it is paid off l/15th each year.
The first two years you may only pay in-
terest. Then a good state treasurer, a good
governor, a good comptroller, a good di-
rector of the budget, they all look to see
how you can scale this in such a way that
you won't have high peaks and valleys so
that during each year you will be able as
best as you can to adjust your payments of
principal and interest and then, of course,
you have to think pretty seriously about
the problems that arise when you go into
the money market.
Now, this has served the State well. But
over a period of time, new problems in the
financial world, a new dynamic development
in the life of the State is taking place. And
a thorough and complete study was made
by the Commission of the need, if any
existed, for extending this period of ma-
turity beyond the 15 years. They reached
the conclusion, and you will see this in the
Eney Commission Report, that the maturity
date extend to 25 years rather than 15
years. You will also know that in the
course of the committee studies and reports
and hearing's that these are the philoso-
phies and views that developed. There are
some who believe that you ought not to
have any requirement built in to the con-
stitution as to a maturity date. Those who
feel this way say sometimes you are going
to build or provide for something that is
going- to have a rather long1 life and if that
is the case, maybe you ought to pay it off
over a longer period of time so if it is 30
or 40 years or even longer, you would have
the right to do so. There are others who
say: you have done well with 15 years,
why should you want to change it and there
are others who say, we have looked into
this whole picture and we think 25 years
maturity is right.
Now, I am not trying to be cute about
this, but I do say to you that there is an
element of right in what all of them say
provided they were all smart enough to
know what the next 100 years is going to
bring forth, because there are developments
in this field that if you are tied in a
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straight jacket may do great harm to the
State.
We had before our Committee I would
say almost every fiscal officer of the State,
and in its distillation it came down to this:
if you are going to ask us how has it
worked in the past, we say 15 years is
good. If you are going to make it a blanket
25 years without any restriction, then we
feel that the legislature may decide to
make them all up to 25 years. If you reach
the conclusion that there ought to be some
form of flexibility, go ahead and see what
you can work out.
We had before us one man whom I
would say for this record, and I hope it is
an imperishable record that will live for a
long- time, James Rennie, one of the great
servants of this State. He was budget di-
rector of the State of Maryland after Walt
Perkman retired, having organized this
Department of Budget and Procurement.
James Rennie is a great public servant.
We had reached a conclusion, the majority
of our Committee, that we would ask our-
selves and then ask these people this ques-
tion: If we left it at 15 years but provided
that it could be extended to 25 years upon
a three-fifths vote of the General Assem-
bly, which then would recognize that this
was out of the ordinary, indeed was extra-
ordinary, and would require a three-fifths
vote of the membership, that in so doing,
would this provide a kind of flexibility that
would give us all of the good of the 15
year proviso, give us the full benefit of
the extension by the majority to 25 years,
give us the recognition that the legislature
could not willy-nilly go into this extension,
but must know that it is different and that
it does require special attention, and then
would not become law, even then, unless
the governor signed that particular bond
indebtedness law?
So coming back to Jim Rennie, I posed
this to him, and his answer was: This is
good. It combines the best features of each
of the proposals.
One of the others who we have great
faith in because of his tremendous experi-
ence, because of his background and knowl-
edge, is the State Treasurer of Maryland,
John Luetkemeyer. He has been our State
Treasurer, sits on top of all these prob-
lems relating to bond issues, and said very
frankly before our Committee: "If you are
making no change other than a flat 25
years, I would prefer to see it at 15. But
if you are going to provide the flexibility
such as you contemplate, then I say to you,
this is a better solution." That is a fixed
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