J. MILLARD TAWES, Governor                     2231

May 6, 1963.

Honorable Marvin Mandel
Acting Speaker
House of Delegates
State House
Annapolis, Md.

Dear Mr. Mandel:

In accordance with the provisions of Article 2, Section 17 of the
Maryland Constitution, I have today vetoed House Bill No. 850 and
am returning this Bill along with my veto message.

This Bill provides that monies derived from the sale of State con-
struction bonds shall be used only for capital improvements and not
for maintenance or any other purpose. The Bill specifically provides
that the costs of all maintenance work shall be included in and paid
from the annual State budget.

The Bill further provides that the expense of any capital improve-
ment costing less than $25,000 shall be included and paid from the
annual State budget, and finally, the Bill provides that the expense
of any capital improvement project costing more than $25,000 or
less than $400,000 "shall not be paid from the sale of State construc-
tion bonds and may be paid from the proceeds of a tax added to
the State property tax rate or from special or Federal funds appro-
priated specifically therefor."

I have been advised that there is a serious question as to the
proper legal definition of the term "maintenance work." Confusion
on this point could affect the Chief Executive's control over the State
operating budget.

Serious doubt has also been raised as to whether any capital im-
provement project costing more than $25,000 or less than $400,000
could be started until the actual funds were on hand, derived from
a special or additional property tax. If this is true, such capital
projects could easily be delayed as much as eighteen months.

A further question has been raised as to whether this Bill will
jeopardize capital projects financed by self-liquidating revenue bond
issues, such as are issued by the University of Maryland, Morgan
State College and the State Roads Commission.

Finally, it appears that this Bill could result in the State property
tax increasing erratically by as much as three cents to six cents a
year.

I am in sympathy with the goals of a partial "pay as you go"
plan, but the means to initiate such a plan already reside with the
Chief Executive of this State and/or with the Board of Public
Works. It is my intention to recommend the financing of all capital
projects costing less than $25,000 in the operating budget.

I am also seriously concerned about increasing the State property
tax, which is a major if not the major, source of revenue for local
governments. In this regard I am hopeful that the Commission on
State and County Finance will clarify this issue.