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ment. Members of this Committee represent a broad spectrum of citizens across the State in the fields of government, labor, education, business, and industry. I am hopeful that they will make recommendations which can be studied and reviewed by you and which will lead to a reorganization of State Government which will be more productive, more efficient, and better able to respond to the needs of the citizens of this State.

Moving on to the education budget, I would like to reiterate my belief that education is the most important function of State Government. I have stated this on many occasions and it is with great pride that I reflect on the growth of education since I took office in 1963. In my first year in office as Governor, the total appropriation for education from the Special Education Trust Fund was $149,000,000 and the appropriation this year is $839,000,000 which constitutes an increase of 463%. The average teacher's salary in 1963 was $3,978 while today the average salary is $10,597, which is an increase of 166%. Since 1963, teacher units have increased some 9,000 while the average daily attendance has decreased approximately 40,000. The pupil-teacher ratio has decreased from 28.8 in 1963 to 20.2 today. These figures point out the tremendous gains we have made in public education during my administration. In addition, we created the program which provides free textbooks to all students. We have expanded the Trade School Program and instituted the Junior College Program so that we now have 29 Trade Schools and 20 Junior Colleges. There are new universities in Mobile, Montgomery, Birmingham, Huntsville, and Athens. There is a new Medical School at Mobile and an expanded enrollment at the Medical School in Birmingham. This year there is an appropriation of $10,000,000 for fees in elementary and secondary education to eliminate this burden from the parents of students in this State.

As we started preparation of our budget last year, we were fortunate to have an accumulated balance of approximately $135,000,000. I recommended, and the present legislative fiscal officer agreed with me, that a reserve fund in the amount of $50,000,000 be created and retained as insurance in the event of an economic slow down which could lead to a reduction in education revenues in this State. Over my strenuous objections, you enacted a bill appropriating most of this accumulated surplus. In fairness, I might point out that every House passed appropriation bill adopted my recommendations and contained a sizeable surplus. However, a majority of the Senate amended the House passed bill to appropriate most of the recommended reserve. You recall that the House refused to concur in the Senate amendments during the Regular Session and the Legislature adjourned without the passage of an education appropriation bill. Virtually the same situation oc

curred in November and I sent back an Executive Amendment reducing all appropriations except teacher salaries by two percent. This was a relatively small reduction and would not have seriously impaired the operation of an affected institution. The Senate rejected this amendment after passage by the House.

Because of the fact that we did not retain a sizeable reserve, we are faced with reductions in many areas of education next year.

We will not have as many dollars to appropriate next year as we had this year. This year we provided all segments of education with the greatest single increase of school funding that this State has ever witnessed. With all of us working together, we were able to increase teacher salaries dramatically; provide funds to purchase supplies in an effort to eliminate fees; increase funds to purchase textbooks; provide extensive increases in retirement benefits; vocational education, Trade School and Junior College Programs were increased dramatically; higher education received significant increases; and in medical education we continued our program designed to provide 300 new doctors each year.

In the budget I am recommending to you there are reductions in some areas of education; however, in my opinion none of these reductions are substantial enough to have a serious impact on the ability of the institution involved to continue its operations. These reductions are not of my choosing but are mandated by the fact that we have no reserve from the present year. While most areas of education will have some slight reductions, there are some areas where I am recommending the same or slightly increased funding. In my recommendation, there are virtually no reductions in medical education nor are there reductions for programs which provide assistance to the handicapped or the afflicted. I am recommending that there be no reductions in the Minimum Program Fund.

While this is not a year of vast expansion or creation of new programs, I am recommending that two new programs be created for elementary and secondary education. I am recommending that an appropriation be made on a teacher unit basis to school systems to provide funds for necessary repairs and renovations. This is one area in which small expenditures, when timely made, can prevent large-scale problems. The initial appropriation is modest as demanded by the current fiscal situation but it is a good beginning.

I am also recommending that legislation be adopted to provide liability insurance coverage for our elementary and secondary classroom teachers and administrators. This will protect these people from personal liability on account of their actions while discharging their responsibilities.

I have been hearing advertisements on the radio with a child's voice reciting that schools will lose their funding, that schools will lose teacher units, that children are sharing textbooks, and that elementary and secondary education is being ripped off. This is absurd and the lobbyists for the Alabama Education Association should be ashamed of themselves for spending the teachers' money to put this type thing on the radio and in the hands of school children when they know that this is not true. The facts are: The Minimum Program Fund is not going to lose one cent this year. I am not recommending that any education money be used for any purpose other than education in its truest sense of the word.

As far as textbooks are concerned, this year we had an appropriation of 6.2 million dollars to purchase free textbooks. The Department of Education has informed me that as of April 9, 1976, only $1.3 million of this appropriation has been spent. Every system in the State has a sizeable balance in its Free Textbook Account. The total balance statewide of unused money is $4.9 million.

And, when they talk about the Highway Department, they don't tell you that the taxpayers of this State are paying as much for teachers' retirement and Social Security as the amount of State funds going to the Highway Department.

With this in mind, I caution you that the matter of appropriating funds is a public trust. It is a matter which should be studied, considered, and acted upon by public officials of this State. As you make your deliberations, do not be taken in by lobby groups who have only the interest of their members at heart. Such groups have no official status and are not directly accountable to the people. The budget is too vital and meaningful to all the people of this State to be entrusted to any one other than duly elected public officials. You should not be tied to any lobby group but should be able and independent enough to consider all of the needs of our State. Once you have considered all of these needs, then I ask you to have the fortitude to cast your vote in such a manner that all needs will be considered and that one public function will not prosper at the expense of another. I entreat you to act accordingly.

* * Regarding the matter of pension funds in the State, let me say emphatically that we will not allow our pension programs to deteriorate and become unsound like those in New York City and Massachusetts, and I pledge to you that the pension plans for the public employees and teachers of Alabama will remain on their current actuarially sound basis, and I submit to you that the other retirement systems should be adequately funded.

To this end, I have directed that various legislation be prepared.

First, to raise the teacher and State employee contributions to their pension program from 5% to 6%, which would put the contribution in line with other states and Alabama's higher benefits. Teachers, State employees, and employees of cities and counties that joined the State Plan have among the highest pension benefits in the United States.

Second, I am proposing legislation which will place those individuals working toward supernumary status under the Employees' Retirement System paying their fair share and receiving the same high benefits as regular State employees.

District Attorneys will be required to contribute to the State General Fund a contribution of 1% less than the contribution rate for the Judges.

Third, in the matter of the Judiciary of this State, the new Judicial Article and the Judicial Retirement System have greatly increased financial demands upon the taxpayers of this State. We are all interested in having a fine judicial system and in providing financial incentives to attract qualified attorneys to serve in the Judicial Branch of Government. There should be an adequate but fair retirement program; however, under their existing program, Judges can become "half a millionaire” the day they retire. Currently, local Circuit Judges

" are getting a pension of $18,750 per year and Supreme Court Judges are getting over $25,000 per year, which is equal to $550,000 for each Judge who goes on the bench at age 35 and retires at age 53.

Widows of Judges are currently receiving $7,000-$10,000 per year, which is twice the benefit of an average teacher or State employee who works 40 years. The taxpayers are putting $38.50 into retirement for every $4.50 a Judge contributes.

Corrective legislation will call for a minimum of 10 years on the bench, a contribution of 12%, removal of the automatic pension increases, and widow's benefits will be paid on the same actuarial basis as teacher and State employee widows.

In conclusion, regarding pensions in Alabama, the economic times dictate reasonable contributions on the part of members.

One year ago this month, I called a Special Session of the Legislature for the specific purpose of affording you the opportunity to discharge the responsibility we share to the people of Alabama to take positive action and provide the tools for effective utility rate reductions in Alabama. The program submitted was approved by the House by overwhelming votes. The proposals I recommended were urged and approved by three separate legislative utility study committees. The Senate was denied a vote on the measures by a small group who blocked consideration by a filibuster in the closing days of the session.

The issue of exorbitant utility rates continues. The people of Alabama — in fact, the people throughout America - are rightfully insisting that actions be promptly taken, that regulations be made effective, and that the utilities, like all of us, must “tighten their belts.” The continued failure to forthrightly meet these issues will and should result in public citicism.

Again, I am calling this matter to your attention. I have three concrete proposals which should serve to provide some relief to the consuming public.

I am again proposing that this Legislature promptly adopt an amendment to the rate base statute to eliminate the 1971 provision for projected expenditures. The legislators who sponsored this 1971 provision now have condemned it as being unfair. The impact of this issue is realized when we note that one major utility claims almost a half billion dollars in its rate base as projected expenditures for the year following the end of the test period and by virtue of that provision seeks to have included that amount, not spent, in its rate base upon which it claims a rate of return should be applied.

I am also proposing a bill relating to the fuel clause under which electric utilities are permitted to automatically pass on to their customers any alleged increase in the cost of fuel. In any event, the amount of such automatic pass on, without notice and hearing, should be strictly limited and continued study should be made with respect to the advisability of prohibiting any such automatic provisions.

Next, I recommend prompt adoption of a bill which will require utilities and telephone companies in this State to refund moneys judicially determined to be excessive. No utility, no person should be permitted to keep moneys collected from consumers when it is judicially determined they were not entitled to the funds.

People throughout America are seeking answers to the astronomical increases in utility rates. In California, "life line” rates are being implemented and are being studied in Texas and other states. Briefly, a "life line" rate is a low, uniform charge for the first several hundred kilowatt hours consumed by a residential customer. I recommend that you look carefully at this concept to determine if it will benefit a substantial segment of the lower-income people without inadvertently benefiting the affluent. I am conscious of the fact that this approach has been facets but every avenue, every suggestion, every proposal should be carefully and thoroughly studied by the Public Service Commission and by members of

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