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3824
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VETOES
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receive the 50% allowance for State and local tax
purposes, although we view this as unlikely; (3)
that domestic utilities would also receive the 50%
allowance, and (4) that, for purposes of
equalization and State aid formulas, the personal
property of utilities would be valued at 50%."
The Attorney General believes that the most likely
interpretation would be that this property would be
assessed at 50% of current value for State tax purposes
only, although he was unable to rule out entirely the
possibility of the same reduced assessment being applied
to local taxation. If restricted to State taxation,
based on the 1978 tax base, the State would lose
$3,948,000 in property taxes, all of which support the
State's bonded indebtedness. The counties and Baltimore
City would, in addition, lose 11/23 of that amount, or
nearly $2,000,000, in the State grant provided for in
section 12H of Article 81. If the lower assessment is
applicable to local taxation, the subdivisions would
suffer a loss in revenue of over $31 million, according
to the Department of Budget and Fiscal Planning.
Neither the State, to the extent of the $3.9
million, nor the subdivisions, whether the effect is
$2,000,000 or $31,000,000, can truly afford this loss in
revenue. The subdivisions, or at least some of them, may
be called upon either to raise their tax rates in order
to recoup the loss or to reduce services. Conversely,
this class of taxpayer - the railroads, utilities, and
contract carriers — would receive an inordinate and
clearly unintended tax reduction.
I veto this bill reluctantly and regretfully,
because I know how hard the General Assembly struggled to
produce some relief from the increasing burden of
property taxes. However, I must deal with the bill as it
was enacted, with the error in it, and with the knowledge
that that error could have the effect of providing a
substantial benefit to a class of taxpayer least in need
of such a benefit, at the same time risking the loss of
considerable anticipated revenues to the State and its
subdivisions. Fortunately, a major part of the bill will
be implemented through House Bill 1389.
For these reasons, I have vetoed Senate Bill 621.
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Sincerely,
Marvin Mandel
Governor
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