THEODORE R. MCKELDIN, GOVERNOR 1883

gallon, effective July 1st, 1954. At the present time the
State receives the entire tax without any allocation to local
subdivisions. The Bill provides that fifty cents of the pro-
posed $1. 50 per gallon tax shall be remitted to local sub-
divisions. The net effect of this proposal would be a loss of
State revenue of at least $800, 000. 00 per year.

It is suggested that the great benefits to flow from a
uniform State-wide tax, eliminating the special tax powers
of Baltimore City and Baltimore County, would actually
increase liquor sales and prevent loss of revenue to the State.
Not only is such a contention highly speculative, but it
completely ignores the repeated arguments made by the very
same interests which sponsor this legislation, that high taxes
are adversely affecting the sale of liquor. It is inconceivable
that an increase of the liquor tax in most of the counties of
the State could possibly have any tendency to increase sales
in those areas.

At most, if it is desired to collect additional monies for
all of the local subdivisions by means of a State-wide liquor
tax, the State's share of the tax should not be reduced below
its present level. This could have been accomplished either
by increasing the tax throughout the State to $1. 75 per gal-
lon, or by providing that from the presently proposed in-
crease all of the local subdivisions would receive allocations
on the basis of twenty-five cents per gallon, instead of fifty
cents.

In the last analysis, the reduction of the State's share of
the tax on alcoholic beverages requires the absorption of the
loss of revenue from other general tax funds. Even if in-
creased sale of liquor were to hold State revenues from this
tax at their present level, it would mean that the additional
tax funds available from this source, but for this Bill, would
not be available for use in reduction of general taxes, such
as the income tax or the sales tax. The possibility of such
general tax reduction is much more desirable in my opinion
than a reduction of the State's share of its liquor tax
revenue, while at the same time increasing the cost to the
ultimate purchaser.

Respectfully,

(s) THEODORE R. MCKELDIN,

Governor

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