4016

VETOES

distributing]] distribution of the revenues from the
tax on cigarettes]] certain insurance premiums;
providing for an appropriation for the 1975—1976
fiscal year of the funds necessary to reimburse the
counties and Baltimore City for a property tax
credit program; and relating generally to a property
tax credit program financed in the 1975—1976 fiscal
year by an increase in [[cigarette]] insurance
premium taxes; and providing for a Task Force to be
appointed by the Governor, the Speaker of the House
of Delegates, and the President of the Senate to
prepare and submit no later than December 1, 1975

plans and recommendations for the further

implementation of a statewide program of property
tax credit relief for the residents of Maryland,

May 15, 1975.
Honorable John Hanson Briscoe
Speaker of the House of Delegates
State House
Annapolis, Maryland

Dear Mr. Speaker:

In accordance with Article II, Section 17 of the
Maryland Constitution, I have today vetoed House Bill
855.

This bill is a supplementary appropriation bill
funding the "circuit—breaker" property tax relief
program, originally authorized by Chapter 750, Acts of
1974. The appropriation is funded by a 50% increase
(from 2% to 3%) in the tax on insurance premiums.

On April 11, 1975 -— four days after the session
adjourned — I received a copy of a press release issued
by you after consultation with the House leadership, in
which you called attention to some of the legislative
history of the bill, the haste with which the premium tax
increase was added to the bill, and the odious nature of
the tax, and requested that I veto the bill. These
sentiments were repeated later at a meeting held with the
House and Senate leaders.

My objections to the bill, which led me to announce
that I would veto it, concern only the consequences of
the 50% increase in the premium tax. To understand these
objections, it is necessary to appreciate the nature and
consequences of increasing the premium tax.

Virtually every State — if not in fact every State
— places a tax on insurance premiums collected from
business done in the State. A listing of the States and
their current premium tax rates is set forth in the