6 JOURNAL OF PROCEEDINGS [Nov. 5

essential for them to secure additional revenues. Otherwise, they
aver, there will be an unprecedented increase in real estate taxa-
tion in the city.

It is respectfully suggested that the City of Baltimore be granted
general taxing powers to meet this emergency situation. This recom-
mendation is endorsed by the Mayor, the Board of Estimates and
the City Council of Baltimore. It is suggested that a limitation
be placed upon the exercise of these additional powers, as I propose
to appoint a State-wide commission to study State and Local rela-
tionships and to report to the next session of the General Assembly.

The City officials of Cumberland, also, request consideration of
legislation to meet an emergency and I request your attention to
the proposals.

With your Honorable Body in session I am availing of the oppor-
tunity to suggest a reduction in taxes under the Unemployment
Compensation Act. Because of the healthy condition of the State
Fund, we feel that such a reduction can be made by affording the
merit rating provisions generally instead of excluding those whose
payrolls increased appreciably during the wartime period. This
reduction will aggregate $7,000,000.00 for. the remainder of the
fiscal year, the Commission advises, and for this reason we are
recommending that the change be operative from September 1? 1945.

Fortunately, the affairs of our own State of Maryland are in
excellent condition. Through legislation enacted by your Honorable
Body, Maryland lias been able to face the critical needs of war,
and the no less critical requirements of a post-war world, without
undue strain. Not only are the State's fiscal affairs in the best
possible shape, but likewise, the huge Unemployment Compensa-
tion Fund, built up over the past few years to the gratifying total
of f 128,000,000.00, has weathered the first demands of unemployment
in amazing fashion, so that today, twelve weeks after V-J Bay,
the fund has climbed to approximately $130,000,000.00, the highest
point in its history.

Through an enactment of the 1945 Regular session, the Board
of Public Works was empowered to use all or part of any future
surplus funds for one of three purposes: namely, to reduce income
taxes, to lower property taxes, or to transfer funds to the post-war
construction program. As. a consequence of an unexpected surplus
as of the close of the 1945 fiscal year of approximately f 1,200,000.00,
and revised estimates of receipts for the remainder of the current
fiscal year running beyond the most optimistic hopes, it was possible
to effect reductions in both income and property taxes, as was
announced officially just a short time ago.

These new reductions, under which individual taxpayers now will
be able to deduct 50 percent of their tax on 1945 incomes,, and the
State real estate tax will be reduced further to 10c per $100 of