1672                                      Vetoes

It is true that I proposed a State tax on cigarettes and other tobacco
products when additional revenue was deemed necessary to balance
the State Budget for Fiscal 1958.

My proposal, however, differed greatly from that of House Bill
No. 253. It would have equalized cigarette taxes throughout the
State at a rate of 5 cents per package. Those of the Bill would throw
them into greater disorder than they are at the present time.

In Baltimore City and Baltimore County, for example, the com-
bined State and local taxes on a package of cigarettes would be 6
cents if the Bill became law. The tax would be only 3 cents in some
of the neighboring counties.

It is true, of course, that a three cent differential exists now, and
it is true that many residents of the City and of Baltimore County
travel into neighboring areas as to buy their cigarettes.

However, I am convinced from talks with many smokers that the
number of people buying their cigarettes outside the higher tax areas
would increase considerably if House Bill No. 253 were to become law.

At present the differential between the no-tax areas and the tax
areas ranges within the 20's. With the imposition of the proposed
State tax they would range from the 20's in some areas to more than
30 cents in others. I am advised that the psychological effect of this
would be very detrimental to business in those areas where the com-
bined taxes would be 6 cents or even 5 cents.

This also could have a serious effect on revenues in those Civil
Divisions which now are giving the most generous support to their
own schools.

Another serious danger exists in the possibility of cigarette boot-
legging, with some retailers from Civil Divisions with local cigarette
taxes purchasing their cigarette stocks in those without local taxes.

Because State tax stamps of various denominations would replace
the local tax stamps now in evidence, adequate policing of the situa-
tion would be impossible and some Civil Divisions again would be
deprived of revenue to which they legally are entitled under their own
ordinances.

The State, of course, could not levy a cigarette tax on the Counties
which presently have no such tax and exclude those which have it.

There is, however, no reason why the Counties without the tax
could not obtain the authority to impose it and use the proceeds for
increased teachers' salaries. I would look with favor on such initia-
tive.

However, for the reasons stated, I must decline to approve House
Bill 253, and urge that the Legislature seek a means of realistically
helping and inducing the Political Subdivisions to help themselves.

Sincerely yours,

(s) Theodore R. McKeldin,

Governor.

TRMcK:O/c

House Bill No. 277—Registration in Anne Arundel County

AN ACT to repeal and re-enact, with amendments, Section 10 of
Article 33 of the Annotated Code of Maryland (1956 Supplement),