MARVIN MANDEL, Governor                       3101

Honorable John Hanson Briscoe
Speaker of the House of Delegates
State House
Annapolis, Maryland 21404

Dear Mr. Speaker:

In accordance with Article II, Section 17 of the
Maryland Constitution, I have today vetoed House Bill
314.

The bill authorizes the County Council of Baltimore
County to levy an income tax on individuals residing
within the County if the county tax imposed on all real
property used primarily for residential purposes is
repealed. The bill places no limit on the rate of tax
which may be imposed, but makes clear that the new tax,
if imposed, is in addition to the local income tax
authorized and levied under Article 81, Section 283 of
the Annotated Code of Maryland.

House Bill 314 was one of several bills considered
by the General Assembly to provide relief to property
owners from the burden of the local property tax, a
laudable desire with which I am in full accord. The
method embraced by this bill, however, is fiscally and
economically inappropriate, and would if signed and
implemented, seriously endanger the fiscal integrity of
both the State and all of its subdivisions, particularly
Baltimore County.

The State income tax, currently set at from 2% to 5%
of taxable net income, represents the principal source of
general fund revenue necessary to finance the operations
of State Government. For fiscal year 1975, over 48% of
the State's general fund revenue will come from the
income tax on individuals — nearly $650,000,000. The
next largest source of general fund revenue is the State
sales tax, which accounts for only 29% of such revenue.

This administration has succeeded in meeting the
State's responsibilities to its citizens for the past
five years without a general tax increase, and it is my
firm intention to continue to do so; however, should the
occasion arise where the demands upon the State for
essential programs and services exceed the State's
ability to provide them from existing revenue sources,
future Governors and Legislatures must be able to turn to
the income tax to raise the additional revenue.

It has been estimated that, in order to replace the
revenue lost from the property tax in Baltimore County, a
local income tax of at least 2.7% will be needed. The
State Department of Budget and Fiscal Planning has
estimated that the local tax would have to be at least