James J. Lacy (1904-1950)
MSA SC 3520-1578
Biography:
Born in Baltimore City, January 22, 1904. Son of Joseph James Lacy and Mary F. (Collins) Lacy. Attended St. Elizabeth's parish school; Loyola High School; Loyola College; Calvert Hall College. Married Rose Daily on June 27, 1925; children James J. Lacy, Jr.; Joseph Lacy, Mariangella (Lacy) Fetting, Rose Jean Lacy. Died of a heart attack at his home in Baltimore City, July 1, 1950. Buried in New Cathedral Cemetery, Baltimore City.
Businessman and owner of an iron foundry established by his father (or grandfather). Member of the Baltimore Board of Fire Commissioners. President, Baltimore Athletic Club, 1930-c. 1941. Member of the Board of Fire Commissioners, Baltimore, c. 1943-. Baltimore City campaign manager for Lane for governor, 1946. Appointed chair of the Maryland Commission on Uniform Acts, 1947. Comptroller of the treasury, 1947-50. Member of the Board of Trustees of St. Mary's Industrial School. Member of the Board of Directors of Metropolitan Bank.
As Comptroller of Maryland, James J. Lacy was influential in instituting Maryland's first retail sales tax. Lacy served his term as Comptroller with Governor William Preston Lane, Jr., who at the beginning of his term in 1947, asked the General Assembly of Maryland for a retail sales tax to provide the state with more revenue and to relieve its financial situation. James Lacy and William Preston Lane were elected on October 6, 1946. According to The Baltimore Sun, Lacy won against Republican Alex T. Grier, 158,810 to 111,317. Lacy began his term at the beginning of January 1947, and on 26 March the Maryland General Assembly passed House Bill 545 instituting the first sales tax in Maryland's history. The law was extremely unpopular and Lacy received and responded to complaints and suggestions about the new tax. But despite the opposition to the retail sales tax, once the law was passed he was responsibile for implementing it. Comptroller Lacy visited and collected information from New York, Connecticut, Ohio and other states about their retail taxes to help him develop policies for Maryland. He then organized a separate division of the Comptroller's Office, the Retail Sales Tax Division, to handle the tax, which opened on 19 May 1947 in Baltimore. He recruited and hired new workers, wrote the rules and regulations for the tax, and answered a myriad of questions about the tax and its imposition. Meanwhile the new staff met with representatives of all major businesses and industries to discover potential problems the new law would create. "These conferences continued for several months and their ultimate value has been proved by the results obtained," Lacy explained in his 1948 Annual Report. They also worked on an extensive eduational campaign including radio broadcasts and commercials, articles in the press, letters, and meetings in Maryland and Washington D.C. because as Edward F. Engelbert explained to a Baltimore Sun reporter, the tax depended on the retail sale of goods and a license was required from any business conducting such sales. Applications for a license required answering 10 questions and paying $1, and once the license was issued it had to be displayed in the store's window. The Retail Sales Tax Division of the Comptroller's Office estimated 50,000 businesses would have to be licensed under the sales tax law and by July 3, 1947, 33,500 businesses were registered.
Once the law was put into effect Lacy interpreted and applied the statute. According to The Baltimore Sun he interpreted the law saying an outside cafe was "on the premises eating" and was subject to the tax. The Sales Tax Division also fielded questions and made rulings about how to apply the law including, as The Sun reported, how the tax applied to ice cream and whether race horses should be subject to the tax. Despite Comptroller Lacy's and the Retail Sales Tax Division's preparations for a smooth transition to the sales tax, many retailers did not initially pay the tax. Merchants collected the tax at the time of sale and sent the tax revenues monthly to the Retail Sales Tax Division. Those who did not pay either protested and refused to pay or collect the tax, forgot to collect the tax, or miscalculated the amount they had to collect. Comptroller Lacy was responsible for collecting unpaid taxes and in 1947 his office collected $160,656 in sales tax revenues from merchants who failed to pay. The majority of these merchants had simply forgotten to collect the tax at the time of sale, Lacy explained in his 1948 Report, rather than collecting the tax and keeping it for themselves. Failure to pay the tax could result in a fine between $25 and $100 or imprisonment.
At the end of fiscal year 1947 Comptroller Lacy felt positively about the enforcement of the Retail Sales Tax. He observed, "The experience to date both from the standpoint of administering the law and the revenue received has been satisfactory. I believe we have been able to work out the problems encountered with a minimum of annoyance and inconvenience to the various individuals and others engaged in business, and the returns from the tax thus far have indicated that the estimates of revenue from the tax made at the time the legislation was pending in the Legislature were conservative and will undoubtedly exceed the estimates to an appreciable extent" (1947 Annual Report, 12). The Retail Sales Tax did indeed surpass estimates which had proposed sales tax revenues of $18,400,000 during the first year. The sales tax gross receipts exceeded these expectations with $23,635,242.97 in the first year, $28,000,942.75 the following year, and $31,975,296.43 in 1953 (1948, 1949 and 1953 Annual Reports). In his Address to the General Assembly of Maryland, 1949, Governor Lane praised Comptroller Lacy's office and their success in dealing with the new tax.
Though Governor William Preston Lane, Jr. submitted himself for renomination as Governor on 31 May 1950, James Lacy decided to retire from his duties as Comptroller. Exactly one month later, Lacy felt ill and by the next morning, July 1, 1950, Comptroller Lacy had passed away in his bed. His unexpected death shocked the state. Despite the controversy surrounding the Retail Sales Tax, a Baltimore Sun editorial recognized Lacy's achievements as Comptroller. "Mr. Lacy applied himself to his new responsibilities [as comptroller]," the editorial explained. "He did not attempt to collect taxes himself, nor did he attempt on his own to improve financial accounting. What he did was to appoint competent aides and then stand behind them with advice and support...Under Mr. Lacy there was set up the special division needed to collect the sales tax. There were headaches. But a commendable job of it is being done" (The Sunday Sun, 2 July 1950, 10). Even though the retail sales tax was very unpopular and cost Governor Lane the next election, a commendable job on the part of Comptroller Lacy had been done indeed.
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