Evening star., 1954-12-13
MaryIanders
Face Tax Rise
OF $50 Million
McKeIdin Debates
Best Ways to Obtuin
Lurqer Revenue


will feel 1t most remains a ques.
tion.
Oficials who run the States
affairs must dig up an
additional $50 million in revenue
for the flscal year beginning July
30 and the taxpayer naturally
viii foot the bill.
Gov. McKeldin said recently
the Democrats '"were pikers"
when they said there would be q
deficit of $l8 million, 1t will be
$50 million, he said.
He no doubt meant this
amount would be needed to ball
ance a budget for the coming
year, since no deficit is allowed
in Maryland under law.
Assembly Meets Jan. 5.
The Governor must present q
budget with enough revenue to
cover expenditures. and the Cen
eral Assembly which conveneS
January also must conform to
this In passing the measure. The
Assembly can cut requested ap-
preparations but has found this
a difficult job in recent years.
: This means the taxpayer will
pay any increased expense Of
operating the State.
Gov. McKeldin and the Legis-
lature have two alternatives:
Raise some existing tax rates. or
create new taxes. The latter is
the least likely, since any new
tax always meets stiff opposition.
There has been talk of raising
the sales tax one cent on q
dollar and increasing the State
income tax one per cent. This
would provide the need revenue.
There has also been talk Of
placing q State tax on tobacco,
but this would undoubtedly meet
heavy fire from the Southern
Maryland tobacco section.
The race tracks could be hit
for a heavier bite of taxes, but
racing interests already are be.
moaning present rates.
Luxury Tax Studied.
Another possibility would be
an amusement or luxury tax,
placed on such things as jewelry,
movies, etc. These taxes were
cut by the Federal Government
last year.
A cigaret tax of two cents q
package and corresponding takes
from cigars, pipe tobacco. etc,
would yield only about $6 or 50
million, thus leaving quite "a
chunk still needed to keep things
in balance. @
Here are some of the things
that account for the pinch:
Last year the Governor. in .
move to avoid raising taxes in
a prediction year, used sys-
TEN of advancing the due date
on utility gross receipts taxes to
bring in an additional S. million
for the current budget.
The legislators, willing to go
along with a plan to keep tax
hikes down, agreed to the move.
but the system won't work this
time, since the date is set per-
manently for each June.
The Governor also has had the
use of rising income from pres
ent taxes and former surpluses.
Now forecasters predict there
will be no more increases in the
| income from present taxes since
the national economy is leveling
of.
Income Tax Reduction.
The Governor and the Legis-
lature also whitfield away most
of the State surplus by giving
Is per cent income tax reduc-
tions for the two years previous
to last years.
Then there is the need for
more money to operate new
State functions such as the new
Patuxent Institution for the De,
linquent Insane which opened
only recently.
The Green commission, which
devised the plan for boosting
teacher salaries on a gradual
scale, predicted an additional
$5.6 million will be needed In
1856.
Experts predict another So
million viii be needed for nor
NAL school expenses.
Automatic raises and pensions
for State employees will take an
estimated 81 million, not to
mention the cost OF six new
judges approved in the Novem-
Der 2 elections and such things
as raising the Governors salary
from $4.500 to $4,000 year.
The Legislature also cut the
States income last year when it
approved. over the Governors
veto, a. move to give the coun-
ties a larger share of liquor taxes.
81 Million Cui Last Year.
Although the General Assem-
bly, can cut the Governors pro-
posed budget legislators man
aged to slice only about million
dollars from the 238 million pro-
poSaI last year.
They also applied slight cut
to Gov. McKeldin's proposed real
estate tax hike, which is governed
/ by the cost OF servicing the State
debt and which had been
scheduled to go from 5.67 to 11.89
cents per 500 valuation.
The Legislature trimmed the
tax to 1899 cents by cutting some
State expenditures and taking
other money from surplus. The
boost win become effective IN
1885.
/ This tax Is almost uncontroll.
able by the lawmakers since It Is
earmarked for payments on the
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