Meeting of State Programs Study Committee held in the House Chamber, State Capitol, Atlanta, Georgia, May 25, 1955: transcript of the proceedings (report of subcommittee of six to full committee), volume XII [May 25, 1955]

MEETING OF
STATE PROGRAMS STUDY COMMITTEE
HELD IN THE
House Chamber, State Capitol ATLANTA, GEORGIA
MAY 25 , 1955

TRANSCRIPT OF THE PROCEEDINGS
( Report: of subcommittee of six t:o ) ( full Committee. )

VOLUME XII

WALTER F. BRAND ENBURG
d? C!.ou'tt epo'ttl!.'t
TELEPHONES MA. 1367- W A . 9022 ATLANTA , GEORGIA

MEETING OF

STATE PROGRAMS STUDY COMMITTEE

Held in the

House Chamber, State Capitol

Atlanta, Georgia

May 25, 1955

TRANSCRIPT OF THE PROCEEDINGS (Report of subcommittee of six to) (full Committee.)

PRESENT

Hon. Marvin Griffin

Hon. Ernest Vandiver

Hon. Walter Cates

Hon. Marvin Moate

Hon. Joe E. Guillebeau

Hon. Eugene Cook
Hon. T. v. WilHams

Hon. Ben Warren Mrs. T. K. Kendrick

Hon. B. E. Thrasher

Hon. Frank Allcorn

Hon. G. Everett Millican

Hon. Quimby Melton, Jr

Hon. Edgar Blalock

Hon. Howard Overby

Hon. Colbert Hawkins

Hon. Freeman Strickland

Hon. Sam J. Welch Hon. John Lee Phillips

Hon. DeNean Stafford, Secretary
Hon . G. N. Byrum

ABSENT

Hon. IraN. Nochumson

Hon. Denmark Groover

VOLUME XII.

2
P R 0 C E ED I N G S
GOV. GRIFFIN: Would the State Programs Study Committee please come to order?
The Chair would like to again express appreciation for putting aside your personal affairs of the day and corning to this meeting, and also the Chair would like to express appreciation to those members of the General Assembly who were requested to come by the respective presiding officers. We deeply appreciate your coming, and taking time off from a busy schedule to perform this service for the State.
At this time the Secretary will call the roll. MR. STAFFORD: The roll has been checked. GOV. GRIFFIN: The Secretary advises the Chair that the roll has already been checked. Any absentees? The Chair wishes to announce that Mr. Groover, a member of the Committee, called a few minutes ago and stated it was impossible for him to be here today on account of a case in court. The Chair will entertain a motion to dispense with the reading of the Minutes of the last meeting. MR. COOK: So move. GOV. GRIFFIN: It has been moved and seconded that the Minutes-reading of the Minutes be dispensed with. Is there an objection? (No response.) GOV. G~IFFIN: The Chair hears none. The reading of the Minutes is dispensed with. The Chair will entertain a motion to approve the proceedings of this body at its last session as transcribed . .MR. STRICKLAND: So move. MR. BLALOCK: Second. GOV. GRIFFIN: It has been moved and seconded that the Minutes of the last meeting as transcribed be approved. Is there an objection? (No response.) GOV. GRIFFIN: The Chair hears none. The proceedings of this body of the last meeting as transcribed are approved. I believe the first order of business is the consideration of a report from a -man subcommittee of the 2l=member Committee--or of the entire Co;mmittee of this body. If there is no objection the Chair would suggest that the Secretary read this committee report of the subcommittees which is now under consideration by this body to the 21 total Committee, or the complete Committee, and the Chair would like to ask that this subcommittee report be on the desk of everyone present here today. I think it is most essential that these members of the General Assembly that the Lieutenant-Governor and the Speaker invited have a copy; if we can put one down among two or three. SEN. MILLICAN: I would like to suggest that one member of the full Committee sit next to one member of the General Assembly, and they could go over it together. GOV. GRIFFIN: Before the Secretary begins, let the Chair make this observation: Not commenting on the subject matter of the report, but

3
the Chair would like to express his appreciation and make the comment that this 6-man committee has worked hard. They have put a lot of time on this report; and I want to commend them for their diligence and their sincerity of purpose in endeavoring to do the very best they could in the present situation.
Mr. Secretary. (After discussion, it was agreed that the report be read in its entirety by the Secretary, without interruption by questions and/ or comments.) (Report of 6-man subcommittee was prefacedby the following statement by the Secretary:) MR. STAFFORD: The committee of six named to draft the following recommendation has requested your Secretary to present the report to the full Committee with recommendations that it be adopted subject of course to the concurrence of the subcommittees and the changes recommended. : (Report read in toto.) GOV. GRIFFIN: I think I should say we are happy to welcome back the Honorable Nat Byrum. You look robust and able to be up and about and we are glad to have you back with us. MR. BYRUM: Thank you, Your Honor. I am able to be up and about. I am not so robust, but I am glad to be back with you. GOV. GRIFFIN: You have, Mr. Secretary, attached to that report of the subcommittee of six a complete financial statement, If the members of the Committee and the members of the General Assembly will get that statement, the double-page brochure. The Chair, before beginning consideration of this report on the part of the members of the 21-member committee--20 gentleman and one fine, gracieoa, Georgia lady--the Chair would like to make this observation: That in the current year total, which is the third column over, you will see there, considering appropriations or revenue this year for common schools and the University System, $122, 073, 854.98. Proposed by the Committee for the fiscal year 1955-56, which is the fourth column, you will see the figure to correspond to the $122, 000, 000 of $158, 328, 486. If you will subtract the 122 million from the 158 million you will find that there is approximately $36, 000, 000 for education of this $64, 000, 000 proposal. Then if you will look under there, at Highways, you will find $55,738,883.58, and proposed for this fiscal year of $76, 307,999, and subtract those figures and it runs approximately $21, 000, 000. Of this whole program of proposed increased revem,1e of around $64,000,000, all but$ 7, 000,000 will go to eaucation and highways. The Chair would make that observation because the State's g:r;eatest growth and progress is pin-pointed in the School System and in the Highway Department. So all the money proposed here except $7, 000, 000 will either go for education or highways. Mr. Hawkins, did you have a question? The Chair would make the suggestion that members of the Committee interested in asking questions

4
about parts or all of the report, that we throw the report of th~e subcommittee open for consideration at this time.
The Chair would make the further suggestion as regarding the members of the General Assembly who put aside their work and have come here today, that they refrain from asking questions until we find out what the 21-man Committee is going to recommend to the General Assembly, and then we will be glad, of course, to have any questions asked by any member of the General Assembly, because ultimately the problem will be placed before you for your consideration by this 21-man Committee.
So as not to get the cart before the horse we will ask the 21-man --or 21-member Committee to give consideration at this time to this report of the 6-man subcommittee.
MR. HAWKINS: Mr. Chairman, I asked the question at the beginning of the meeting as to whether or not we would take up each item separately. I don1t know. I think one way would be as good as the other. I would, personally, like to make a few comments on the entire report at some time, and discuss---
GOV. GRIFFIN: During the discussion. MR. HAWKINS: (Continuing) --whenever that is satisfactory with the Chair. GOV. GRIFFIN: Is it satisfactory with this Committee at this time, and the Chair thinks it is apropos to expedite matters and get the ball rolling, to have the Chairman of the subcommittee- -it would certainly be within the rules of parliamentary procedure to have the distinguished Chairman of the subcommittee preparing the report to make the opening statement. The Chair recognizes Senator Millican. SEN. MILLICAN: Governor, members of the General Assembly, and members of the Study Committee: I would like, first, to let all of _ you know that this is not my report. It is the report from the 6 .. man committee which was appointed by the Governor as a part of this overall job. These recornmendations all do not come to you as unanimous from all the members, but again I say it is a 6-man report, and on that basis I am going to discuss, not these items, but I would like to call your attention to two or three things that were taken into consideration pdmarily, and I am sure they have got to be taken into consideration by the entire Committee and by the General Assembly in connection with this overall picture. The first thing is I would like to call your attention to the fact that we have in this report $16, 800, 000 of money which has to be set aside each and every year for the payment of authority rentals, which, as far as I know, was not taken into consideration at the time the General Assembly passed the $200,000,000 school issue and these other authority issues, When the bonds are floated it has always been, with municipalities, counties, and so forth, that provision be made to set aside interest and sinking fund at that time, either by tax levy or whatever it happens to be. But in this case it has not been, so it has got to come out of current revenue from somewhere, each and every year, until these obligations are paid off in the form of rentals. Therefore, there are $14, 500,000 of

5
this in the common school, State Board of Education budget; there is a million and a half dollars of it in the State Board of Regents; there is $800, 000 of it in the Eugene Talmadge Memorial Hospital, the capital outlay to pay off; then in addition to that there is $3, 000, 000 additional which is put in here next year for this coming fiscal year on out for operations which has not been an obligation of the State in the past.
So there we have $20, 000, 000 of additional money to be found to take care of those obligations, and we know we are going to take care of the obligations, to pay these rentals, whether or not we have any money left for anything else, or not.
In addition to that, to operate the services of the State on their present basis, we have to find an additional $9, 700, 000 which is now a deficit, which we are operating and making bills which we do not have the money to pay, which brings it up to $30, 000, 000. That's so much in connection with that, in bringing it to you.
I would like to call your attention to some breakdowns in the State of Georgia as compared to other states of the amount of money that's collected for different purposes. I only do this from the standpoint to give you some idea of the tax load in other states on various items and in states where the percapita income is equal to or below the State of Georgia There are only two exceptions of states being higher, and that is Florida and Virginia, where the per capita income is slightly higher. The first is insurance premiums. We have collected $5, 700, 000; North Carolina, $7,600, 000; Mississippi, $6,400, 000; Tennessee, $6, 000, 000; Virginia, $7, 500, 000. This is for 1954.
The next is the alcoholic beverage. Alabama collected $12, 600, 000; North Carolina, $10, 300, 000; South Carolina, $11,900, 000; Florida, $28, 900, 000; Virginia, $19, 200, 000; Georgia, $10, 200, 000.
The next is income tax: North Carolina collected $76, 739, 000; South Carolina, $26, 800, 000; Virginia, $60, 200, 000. Two states neighboring us collected less; one is Tennessee with $19,700,000, and one is Alabama with $15, 200, 000. Our collections were $26, lQOypOO, just about equally divided, I think, between individuals and corporati<;ms. Is that about right, Mr. Thrasher?
MR. THRASHER: That's right. SEN. MILLICAN: Then the item of property tax in the states collected anywhere from $10, 000, 000 on down, but we being out of the property tax. The death and gift taxes, our state had practically nothing and some states run as high as six and seven million dollars on that. Unemployment compensation--on the motor vehicle registration, tag tax, North Carolina collected $23, 000, 000; Florida, $33, 000, 000; Tennessee, $15,000, 000; Virginia, $17,000, 000; and Georgia, $7,000,000. Two states collected less than we did in that connection; Alabama with $3, 600, 000 and South Carolina collected the same amoWlt, with about 60o/o as many tags as we have. Those are some of the figures in connection with that. While I am giving you some figures which we discussed looking towards this, one of the recommendations we have made is a lien law in

6
connection with old age as sista nee, and things of that kind. I wou19. ~ike to call your attention, because to me this is a very black mark on the state of Georgia and I am hoping that a lien law and other things are going to do something about it. Recipient rates for November, 1954, perciipita income for 1953, by states, show that in Georgia 389 out of every 1, 000 people receive some form of assistance from this State; either the old age pension, dependent children, blind, and so forth; 389 out of every 1, 000. In the State of North Carolina which has a per capita income less than the State of Georgia, and which has a lien law, only 199 out of 1, 000 receive assistance in North Carolina. As a matter of fact, we are fifth from the bottom in the number of people that receive that assistance, and I am sure that the lien law will do a great deal in regard to that, and other laws or other things might be done to cut that down, beca1,1se it has undoubtedly been very much abused.
One provision in this that I am particularly very much concerned on, noting the income tax law, the recommendation has been made of something that I have for 20 years proposed, and that is the deduction of Federal income. The General Assembly in the past three or four years-and I will say I have voted for every one of them, as far as I know-- has passed certain laws that provided that gradually and gradually the income tax has been cut down; that is, the carry-back provision, and various things that we have passed. I don't know whether this is the time to say it but I am very definitely of the opinion that if we cut out the Federq.l deduction, as has been reconunended by this Committee, that the incqme tax on corporations should be reduced in order to be sure that we stay in line, and we are, with this recommendation, in line with South Carolina. We are lower than the North Carolina law. Tennessee law is lower 3 3/4o/o on net income. The Alabama law, I think, is 3o/o, and it allows the Federal deduction, but the Governor has recommended that t:P.at be eliminated in Alabama, and I know the Governor is very much concerned, and I am very much concerned, and I am sure all of the me:rnbe1-"s of this Committee, regardless of their personal views on it, that the 5% law or percentage that we have put in there should be further reduced.
GOV. GRIFFIN: Senator, if you would permit the Chair at this time, if you will pardon this interruption, the Chair might suggest that you give the members of the Committee, and also the members of the General Assembly just a brief run-down on what position under this proposed deduction of Federal income tax, whq.t position it would put Georgia in in reference to our sister states. You have touched on that very briefly, but tell them what states permit it around us; which do not; what the net corporate income tax is in those states, and of course our sales tax feature, which has another consideration.
SEN. MILLJCAN: Going into Alabama, the Alabama corporatinn tax is 3%, and they allow the deduction of the Federal income tax. In North Carolina the income corporation tax is 6%, and they do not allow the Federal. South Carolina has just increased the corporate tax from 4 1/2 to 5%, and they do not allow the Federal deduction. The State of Florida is prohi\bited by the Constitution of having an income tax. And
in Virginia I do not know the rate, but they have a provision in the Vhginia

7
law that if the tax collections come up to a certain amount, then all of the income taxpayers are remitted or rebated 25o/o of the amount that they have paid. In Tennessee the income tax is 3 3/4% on net income. Mississippi, I don't know what it is. Of course our sales tax, as the Governor said, is more stringent than any other state in the Union on the question of materials, and things of that kind.
I do have, and I would like to call attention, because I think it would certainly give the Committee something to think about in connection with the income tax on individuals, the Committee recommended that the top bracket of 7%, which is now in the law over $10, 000 net income be stricken, and that all income of over $10, 000 be on a 6% basis. They also recommended that the dependents for single people be increased from $1, 000 to $1, 500 and that married couples be increased from $2500 to $3000, and that the dependents be increased from $500 to $600, which means, primarily, as far as the low income brackets are concerned, a person making $6, 000 income, with the standard deduction that they now have for taxes, contributions, and so forth, with the exemptions of $2500, with two children--which we figured as an average family of four in all- -would pay to the Federal Government the same amount he now pays, and he will pay to the State Government $14 instead of $22 that he now pays. A married person with no dependents would pay the same. Anything under $6, 000 would be less, and if they got down to $5, 000 it would be wiped out entirely with the married couple and two children.
The $8, 000 bracket, along the same line, they would pay to the Federal Government the same amount, and the amount they would pay to the State Government wodd be exactly what it is today. They would pay $50.72 today, and under this they would pay $50.
The $10, 000 bracket, they would pay to the Federal Government $4 less, and they would pay to the State Government $19.60 more a year.
The $12, 000 bracket, they would pay to the Federal Government $12 less than they are paying now, and they would pay to the State Government $44 more, or a difference of $32 in their income tax totalst
less The $15, 000 income, they would pay to the Federal Government $25/than they pay now, and they would pay to the State $90 more to the State Government, or a difference of $65 a year, with a $15, 000 income.
$20, 000 income, which is as far as I have gone up, they would pay to the Federal Government $57 less, and they would pay to the State Government $188 more, or a difference of about $130 per year more income tax; with a $20, 000 income by the individual.
I have also worked out- -and that is figured on the basis of a standard deduction of $li, 000; 10%. $1500 on $15, 000 income.
Now the question of the income tax on corporations, I know there are differences of opinion on this, and I simply submit this because I :know it will come up and I know that many of us are concerned about the question of industry in Georgia. You may want the Committee to leave it just like it is now, but I did want to submit to you that I, for one, feel that there should be a reduction, and in my opinion there ought to be a 4% corporation tax. Maybe the State Auditor has a different view on it and would care to express himself on that. I do think that's the only item I know of in the

8
entire report on which there has been some discussion with the members, and I think that ought to be cleared up.
GOV. GRIFF~N: Senator, in addition to these items that you have pointed out for consideration, in an endeavor to be helpful to the members of the Committee, and invited guests here today, about the State's overall program, I think maybe a word or two on the need for that, and what your forecast is on the progress of the development of the State as a whole would be of value to the Committee.
SEN. MILLICAN: I would like to say that this entire report, with the exception of the first three or four pages, covering the exact recommendations of the Committee from the standpoint of finances, are the reports that were submitted by the individual committees, with the two or three recommended changes that the Committee recommended, such as the vocational, and things of that kind, and that, as I understood, has been approved by the subcommittees; have gone back to them and have been approved, so all of the 25 or 30 cases, as far as finances are concerned, are not the recommendations, to start with, of the 6-man committee, but are the recommendations of the several 3 ...man committees, which made the recommendations to the entire 21-man committee, and they were referred to the 6-man committee.
MR. COOK: Mr. Chairman. May I ask a question, for a point of information? This final report, as recommended by the central committee of six, I believe, Senator, represents a scaling down from the original overall request from $88, 000, 000 to $64, 000, 000; is that not correct?
SEN. MILLICAN: That's right. The original request was over $100, 000, 000. The subcommittees, then, in their studies, reduced th~t from over $100, 000, 000 to $88, 000, 000. Then the 6-man committee, i.n trying to study means of revenue, and so forth, further scaleQ. thp.t down, subject to the recommendations we have made be approved by the various subcommittees on the items that were scaled down to approximately $64,000,000.
We feel that the additional amounts that will be secured over and above the amount to operate the firet year will be from the additional income that will come in froptthese particular new revenue sources, as well as additional income that will come in due to the increased economy of the State in the revenue items that we nbw have on our books. From all indications, from the economies and others, the southeastern section of this country is destined to grow more in economy than any other section of the entire country, with the possible section of one or two of the western states.
The Federal Reserve index each week shows in the retail stores that the Atlanta District of the Federal Reserve system is almost consistently each week of being greatly in excess of the national avel',"age in percentage of gain as compared with the same week the previous year. While the Atlanta District of the Federal:: Reserve, of course, covers more than the State of Georgia--it is the surrounding areas, and all, located in the Southeast.
From all information that can be secured, and this was included in the report of the s uboommittee on Education needs, that according to the

9
birth records, we are not dealing with something in the air that we think is going to happen, but on the actual birth records, that the increase in school attendance will average for the next several years in the common schools 30, 000 children per year.
And then if you take into consideration the average of those, it is not only the question it needs teachers and all that business, but an average of--well, you have got six or seven million dollars there in that one item, besides the transportation, and many things of that kind.
GOV. GRIFFIN: Senator, the Chair didn't ask this question in the manner for the question itself to be a hot potato, but it has been suggested frolll time to time by members of this Committee that th,is teachers' salary schedule, and the provisions that have been made here by this substantial increase in revenue going to the Department of Education, would do this job for some time to come. Is it your opmion that if we initiate this program, that they wouldn't be back here two years or four years from now asking for an increase? I would like to have your opinion on that. I am inclined not to believe that statement in its entirety.
SEN. MILLICAN: I could certainly answer it, that if we gave them three times this amount, I couldn't say that they wouldn't be back in another year. I don't think we will ever be satisfied with the needs of education. I think that's the history of education, and maybe that is sound, but I am sure I do not go along with the thinking that in 1957 they won't be back asking for something else.
But I do say this, and I would like to call your attention to it: The starting salary under this new scale is--for a one-year--
MR. COOK: Mr. Chairman. A close study of the projected pro gram, as to school teachers' salary, indicate that under this program we are recommending a substantial increasefor teachers' salaries over and above what we contemplate they might ask for two years from now.
GOV. GRIFFIN: That is the understanding of the Chair. Is that right, Mr. Auditor?
MR. THRASHER: I would like to talk on that question. GOV. GRIFFIN: The Chair will bear that in mind. SEN. MILLICAN: In fact I would even go further than that. I rather doubt that any department of the Government, whether it be local, state, national, would ever be satisfied with the amounts that they get and will always be back at every session of the General Assembly. GOV. GRIFFIN: That's the nature of the critter, Senator! MR. THRASHER: May I ask the Senator a question? SEN. MILLICAN: Yes, sir. MR. THRASHER: Don't you think, though, in this Committee re-. port, of which I was one of the members, that we have, by this recommendation recommended taxes of such a level that there is no way in the world to get any additional money out of the people unless the times do increase? Haven't we covered everything we could? SEN. MILLICAN: As far as I know, we certainly have. I give you that opinion. I want to say this, in talking on teachers' salaries. That is the big item in education. Of course there are a lot of frills in education that

10
ought to be cut down, and I for one member, I don't mind saying I don't appreciate the resolution that the State Board of Education passed yesterday when they said give us more money, but don't do anything with any of the laws we have got. I just don't agree with it at all.
Next time they will want- -and I am not referring to any member of the State Board, because the next State Board will be doing the same thing, but I am interested in this thing of the salaries of the teachers in the schools, and under this basis we are going to hire a teacher for the first year at $2160. That's just about as near as I can figure around $180 a month. If you are going to figure on that basis. I don1t know how we are going to do anything less than that.
The questions may come up: Well, they only work nine and get paid for 12. Very few of them are in a position to get other work during the summer, and very few--I should say a good portion of them try to improve themselves from year to year so they can get additional increments and be better fitted to serve.
So I think we have got to take into consideration only this- -and I will tell you now I don't agree in my personal opinion with all the taxes we recommended. I don't think any member of this 6-man committee agreed with all of these taxes. But it is just simply a case of what we can do toward relieving this condition, which is absolutely on the basis of two departments of Government; one is education, and the other is highways. We know we are going to have to do something for highways, and the recommendations we made for highways, the recommendation of the subcommittee being that the gasoline tax be increased lf and the recommendation of this 6-man committee is it be increased l/2f, and the reason fo:r it is this: That Georgia is the only state in the 48 that has a sales tax on gasoline. Therefore, the tax in this state today averages a little better than 6. 6f per gallon. There are five states that surround the State of Georgia all have a gross gasoline tax of 7f; North Carolina, South Carolina, Alabama, Florida, and Tennessee. Therefore the Georgia tax, under this, will average better than 7.lf per gallon; the same as the other five states that surround the state of Georgia.
After Mr. Thrasher has said what he has to say, if I can answer any particular question, to give you the ~asoning of the committee behincl the recommendation, or why the recommendation was made, why it was not possible to scale it 4own any further--and I believe there ought to be som e things done that were not done; it wasn't done because of the lack of time. I am still opposed to withhold tax from income, but the Conunittee felt it could not be done in time for any session. There were several things that came into the picture; Federal administration, and along those lines.
GOV. GRIFFIN: Thank you, Senator. MR. HAWKINS: Mr. Chairman, I want to discuss briefly the report. I will let Mr. Thrasher, or anybody else, go ahead. GOV. GRIFFIN: The Chair recognizes Mr. Hawkins. MR. HAWKINS: Mr. Chairman, lady and gentlemen, of the Colnlnit.. tee; I would like to say at the outset that the remarks I propose to make are purely in the nature of discussion rather than being opposed to the re-

11
port of any members--any committees, or any members thereof. I feel, however, that we shouldn't sit here and discuss these things and make recommendations that will in turn carry great weight with the Governor and who will have the difficult obligation of having to make recommendations to the General Assembly as to meap.s and ways of raising taxes here in Georgia.
I wish to state at the outset that there are many of the provisions of every report that I am in favor of.
However. I do wish to say at the beginning that at the outset, wheP. this Committee began its deliberations, it, I think, was the opinion of all of us that there were three main factors involved in the overall picture of our financial difficulties. We felt that we should first look into the various departments of the State and see where we could economize. Now that's a word that has been sadly misused, and within the last few days neglected in our deliberations.
We also felt that another factor that entered into our discussions would be the increased revenue that would come in to our Department of Revenue, and we felt then that if, after these factors, had been exhausted, then it would be obligatory on the citizens of Georgia, as represented in this Committee, and later in the General Assembly to pass sufficient tax laws to carry out the services of Georgia to the people.
I feel in my own mind, and again I say that this is purely by way of discussion rather then argument or opposition to reports or otherwise, that perhaps the total amount added--when the subcommittee reports added together, far exceeded what, at this time, should properly be raised by taxation.
I feel, also, that when we consider the $65, 000, 000 report of the 6-man subcommittee, that that perhaps is jn excess of what actually the General Assembly should undertake to raise by way of taxation. That alone would be an increase in taxation in Georgia of over 25o/o, in comparison with present Georgia taxes.
Perhaps we need taxes increased in that amount. Perhaps we don't. We have listened to the various departments appear here and I $ay, frankly, that some of these departments that appeared before us gave \lS facts and figt1res showing that they were in a stage of economy whereby they were undertaking to save money and refrain from placing additional tax burdens upon Georgia.
We also saw other departments who appeared before this Committee, not by way of giving us information whereby they could economize, but they appeared before this Committee more in the nature of an appearance before an appropriation committee arguing for additional ft1nds.
Now that is precisely what happened, and so far as economies go in the Department of Education, I think that feature of our investigation was entirely tlnSatisfactory. There were very few, if any, statements made showing where the Department of Education would save money.
But the fact remains that I think anyone, any member of this Com-:mittee, can look at the overall situation in their department and say that perhaps you are rendering a proper service and a just service, but in the interest of economy in the State, and in the interest of necessary economies

12
in the State, in conjunction with increases in taxes, there are things you can do without; there are things you can cut out.
So I say to the members of the Committee that in my overall judgment of what has transpired in our investigation that perhaps we have lost sight of the idea of economy. Perhaps we thought about it during the first day or two of our deliberations, and then we started seeing these vast facts and figures and thought more about that than we did about the fact that there are departments in the State that can perhaps not economize. I don't think any of them are wasting money. That was one of the greatest revelations of this entire series of hearings, that I don't believe people in this Capitol are throwing away money, but I do say they are spending some money on things that could be cut out.
Well, in connection with the final recommendations of the committee I feel- -and I feel that a vast majority of this Committee think- -that substantial savings could be made. I think, as an offhand figure, there is not any question but what the sum of $5,000, 000 could be cut out in services,. that are fine for the people of the State; they are adequate; but in the midst of a financial crisis, they are things that could be left off and cut out. Especially if it means the adding of additional taxes in a time of crisis, when the people of this State are having great difficulty in meeting the tax burdens that are already upon them.
MR. COOK: Mr. Chairman, may I ask a question for clarification?
GOV. GRIFFIN: Will the gentleman yield for a question? MR. HAWKINS: Yes, sir. MR. COOK: Does not our report on education show actually economy measures amounting to approximately $15,000, 000? MR. HAWKINS: !believe it does, sir. I hope we can put them in so that it will effect economies as much as $5,000, 000. MR. COOK: I don't mean we will have them, but they al,"ein there. MR. HAWKINS: I think so. I think they are going to be resisted as far as they can be. I agree with the Senator, who said he is violently opposed to the recommendation that they made that they give us the tools and we will do t~e job--give them the tools, and they will do the job. The evidence that has been submitted to this Committee indicates
that the Director of the Department of Revenue is collecting an amount of
money over there that will equal $15, 000, 000 over a period of 12 months. The first three items in the report of the Committee indicate that on cigarettes, liquor, beer and wine, that we can easily raise the sum of $12, 800, 000 on these three items. Add this to the minimum savings that I suggested of $5, 000, 000--I hope that the Attorney General is correct, and that they will save $15, 000, 000 in that Department--but if you say that their economies will amount to $5, 000, 000, then we have a total increase there of $32, 800, 000.
Now looking again at the overall picture of this thing, and the variou subcommittees were working in the dark, so to speak, and didn't know what taxes the other committees would recommend, so therefore we have the various recommendations of the subcommittees that the big committee has consolidated, and I think that any additional taxes, that we can take our

13
choice somewhere along there. Perhaps we do need additional taxes. If we do, I think that the General Assembly of Georgia will vote those taxes, at the request of this Committee and upon the recommendation of the Governor, if he should make such a recommendation.
I feel that all of us feel that whatever taxes are necessary, should be added. But I don't feel, and I don't feel that we can adopt a report, here, and submit it to the Governor, and submit it to the Legislature, that will undertake to settle the financial difficulties of the State of Georgia for the next four years. Like any other government, we follow the old rule that the human wants a capable of indefinite expansion and time and time again people are coming back here and asking the General Assembly for money, year after year, and we aren't going to settle anything, and we can't do it here now by saying we will give so much money next year, and so much after that, and so much after that. The thing that I am talking about in relation to this report is that I personally--and again I say I am not arguing against the adoption of the report--but I say that the $65, 000, 000 report, here, is about twice as much as we ought to recommend.
And we also have the matter of practical politics in this thing, that
J think something ought to be recommended by this Committee that the
General Assembly will sit down and listen to and perhaps pass. I, for one, would hate1 to see the Committee make a vast
recommendation as to increased taxes, and the Legislature turn it down. I think that that would be a most unfortunate situation.
But I do think that in the light of the times, in the light of all taxes, in the light of recent increases whereby the largest department of the State has had its appropriation vastly increased, I do think we should think long and earnestly before we make a recommendation here that would make such a vast increase in State taxation.
Now under this report $65, 000, 000 is not the limit. Uncti:lr this report, if you direct the counties to assess their real estate at SOo/o of its actual value, as this report recommends, $65, 000, 000 won't be the beginning of our tax increase. I have no idea what that would mean if 159 counties had to reevaluate their property and say that to get the money from the State, or to get the increase from the State, we have got to raise our taxes 50%, when we all know that the actual assessed property value in many counties is far less than 50%. That, to me, is one of the big points in this report. That, to me, is one of the things that as a practical matter I don't believe our county officials would do it. I just don't think-! think that the result of it would be that some counties would get the increased benefits in education and others, the smaller counties, wouldn't get it, on account of the failure to enact the increase at a lower price in taxes. So that, I think, is one of the things we should think about. That, I think, is one of the things that is unfair to the smaller counties in Georgia. That, I think, is one of the things that will affect over a hundred counties in Georgia.
Now I submit that I can't help but agree with some gentlemen wlo have discussed the items before this Committee here prior to this time that perhaps on a local level enough has not been done in the way of

14
financing our education system. I realize that. You can't be fair--you can't look at this thing fairly and squarely and not realize that actually over a long period of years some counties have relaxed their efforts as the State has continued to grant more money for education.
The fact remains, however, that that,s the way the system is set up. The fact remains that most of the time in our small counties, so far as college preparatory education goes, we are not educating people to live in the small town. More stay in there now than did formerly, but we are educating people to stay in Atlanta and Macon and Augusta and Savannah. They go through our schools and move away.
So I feel that this provision is unfair, or impractical, so far as the smaller counties go. But even greater than that, I feel that it is a vast increase in taxation. I have no way of knowing, right now, just what that would mean in the way of increased taxes in Georgia, but I walld be willing to venture a guess that it would far exceed the $65, 000, 000 that the Committee has recommended, so far as increased taxation is concerned
So I, in general, think this about the proposed recommendations here: I feel that these recommendations are far in excess of what they should be at this point. I feel that they are in excess of what will subsequently be voted in the way of tax increases. I feel that when a program is submitted to the people, to the members of the General Assembly, that it should be a program adopted by this Committee that is somewhat in liRe with what they will be expected to pass. But I do feel that the vast increases in taxes that have been proposed here by the committees, and I was on one that proposed them also, to submit it to the full Committee; but when we consider all the circumstances and all the evidence that has been submitted before this Committee, I feel that the tax proposals are excessive and I feel that even though we should vote them and go ahead and say that we have settled the situation for four years; that when the General Assembly convenes next January in regular session, and the following January, and the January after that; we will realize--or whoever is here will realize (laughter) that we haven't settled anything; that we haven't settled anything; and that the departments in this State, and particularly the largest department in this State, is continually asking for increased funds.
So 1 say to the lady and gentlemen of the Committee that in my opinion--and it is just my opinion--from hearing the evidence here, and hearing the reports that have been offered here, that this $65, 000 is just about twice what it ought to be, and I appreciate the attention of the Committee; I appreciate the opportunity to present these views which are solely my own; and I feel that we are not going to settle anything per ... manently and anything definitely, and time and time again, as the Committee said in its report, we will be confronted with tax troubles and tax difficulties and tax increases.
Thank you. GOV. GRIFFIN: Thank you, Mr. Hawkins. The Chair recognizes Mr. Thrasher. MR. THRASHER: Governor, and members of the Committee; also members of the General Assembly: This report which has been made, if you will check it closely you will find that all the money that has been pro posed go back to the local counties . There is none of it stuck up here in any of the State departments. It is all for distribution to the local counties. Some of the members of the Committee may think that the items

15
may be too high, but they have had the opportunity and privilege of participating in this Committee, and pointing out whether the funds for education were too high; whether or not the funds for public welfare were too high; whether or not the funds for highways were too high; or whether or not the funds for public health were too high. That is your choice. You can operate today on the same income that you have today, but your choice is this: Under our old age pension set-up and public assistance program we have no choice whatsoever in the operation of that. If the funds for the assistance program remain the same, we will require that every time a person is added on the rodl, that the individual payment to the other remaining people on the roll has to reduced proportionately.
My friend, Mr. Hawkins over here, if we remained on that particular field, and every time we added a person to the roll and had to reduce the person's check in his county on the roll, I think we wa.id hear from that side.
As far as education is concerned, I think that all of you are familiar with the fact that the educational forces of this State are now grooming, or have been grooming themselves, to approach the members who run for the General Assembly the next term towards putting in what they call an Adequate Program of Education. The members of the Committee that recommended this educational program did so to try to solve the problem now, realizing that it wasn't practical and it could not be accomplished of having a taxation now, and then have another one two years from now. In other words, if you have one now, it was the thought of the Commit tee that this was the last that could b"e had inside of four years. You are going to find some opposition to the recommendations on education. The State Board of Education yesterday adopted a resolution to give them 25 or 30 million more dollars more money, but don't do anything about the laws. We want a lot of teachers out in the counties. We still want to tell the counties what they can do.
On the other hand some of the local school officials are gcing to have something to say against the program, because this puts it strictly in their laps, as to operating their school system economically. Heretofore they have been able to say: Well, I can't do it, because the State is not giving me money. Under the provisions here, it allots the funds to the county; those are the county funds; and it is up to them to operate economically and a lot of the local county school superintendents don't want to assume that responsibility; they don't want the State taken out of the picture, where they can't turn and hop on the State and say the State is not doing this or that.
I would like to say this: That if this program on education is defeated, in my opinion it will be caused by that particular group, and the teachers and the children of the State will be the ones who suffer. In other words, if they see fit to try to defeat the program now, they are the ones who are going to have to account to their teachers and pupils, and not the Committee, because the Committee has recommended what we think is a sound program.
Now as far as taxation is concerned, the Committee was very diligent in trying to get a tax structure that would not upset the economy of

16
the State, that would not keep industry from coming into Georgia, and in checking the figures we found that since 1944 income tax on individuals has more than tripled. We also found that on corporations that the income tax received from corporations in 1944, ten years ago, was $10, 000, 000, and even though the industry and business done in the State has quadrupled or more, they are only paying $13,000,000 now. In other words, there is something rotten in Denmark, I would say, when individuals pay three times :more income tax and corporations are only paying $3, 000, 000 more than. they were paying in 1944, when it should be around $30, 000, 000 instead of $13, 000, 000.
Now that was the reason--also it was taken into consideration, when you look at the income tax on co::-porations you have to look at the whole picture. We were reco:m.r.nending a program and an income tax which we believe would hurt the economy of Georgia worse than any other tax, for the simple reason you could take the deduction on the Federal Income Tax or. the State taxes paid, and not less than 40 or 500/o of the Federal tax would be drai:ited of the Federal Treasury.
MR. COOK: Mr. Chairman. Mr. Thrasher, I think you said more when you 1neant less.
MRo THRASHER: Wodd affect the economy less- -if I said "more". MR. COOK: The proposal, as you know, contemplates an act that will allow corporations and individuals to file a tentative return. The taxpayer, durir,g the taxable year, and that will enable him to make his total deduction frojthe Federal return when he files it subsequently. Heretofore they have been filed about the same time. MR. THRASHER: The reason. that was put in there was to allow a Georgia corporation to pay its taxes locally on a contingent term within the year was to ;:r,ake the most out of the State tax deduction. In other words, if it fits him to pay it as it should be paid on the State statute year, if he could save money with the Federal Government by doing it that way, fine; if it works cut he could save money by applying it in the same year, fine. In. other words, that 1 s put in there to give the Georgia taxpyer the benefit. MR. COOK: And it's voluntary, I believe. MR. THRASHER: Voluntary. He chooses what he wants. When you figure taxes, Federal and State, as I say, I think it would draw 40%, possibly higher than that, out of the Federal Treaaury. As far as the individual income :;ax is cc::::tcerned, that is correcting the situation that has been needed to be corrected, because we have put the low wage earner below four or five thousand dollars, the heavy sales tax on him; we have hit hi:m in every direction; and the only person that we can find that hasn't kept pace with taxes was the corporation, and that was the reason for 511/o, which was a reduction of 1/2 of 1% of what it presently is. As far as the pre-gram being needed, it is just a case of choosing whether the State is going to tell the people from outside the State to move along in. We are going to furnish the schools. We are going to take care ci. you people. We are going to build the roads. I don't believe anybody would disagree with the proposition that our roads in the State are getting worse and worse year by year. The main reason for that is that all the

17
concentrq.tion has been placed on building roads, but very few delegation.s appear on the State level to maintain the State roads.
We have done the best we can on this report. I think it is a sound report. I think it will benefit the citizens of the State. It is up to the members of the General Assembly whether or not the State can progress and whether or not the State can afford to pay it.
GOV. GRIFFIN: Any questions? MR. HAWKINS: Mr. Chairman, I would like to ask one qu,estion. Would you mind discussing that matter that I mentioned of the counties ad valorem tax increases? MR. THRASHER: Yes, sir; I would be delighted to. Under the present laws of the State, which have been on the statute books ever since I can remember, it requires the counties to assess their property at fair market value. Under the system that they have, every county in the State of Georgia varies. In other words, you have counties in this state where the Stq.te is financing 90o/o of education. You have another small county where they are financing 78o/o of the education. You have another county where they are financing 74o/o. 93.6% is the highest. Here is another one; 89o/o. Now here is what has been happening: Under the present laws that the educational system operates on, they plq.ce a premium on the employment of teachers. They don't worry so much about whether or not they can get any more work out of a teacher, or anything else; it is how many teachers they can employ; they t;ry to get as many as they can; because they get $300 from the administration and $ZOO capital outlay to employ the teacher. The best way to judge the support of education is by a fixed amount per capita. There is one item you will have variable, there, and that is transportation. We have recommended transportation be v;;Lried in accord,.. ance with density, and that the money be paid either on a per capita or mileage basis. I am inclined to thi~ that a mileage basis would be more practicable. Now under the present laws that are now in effect, the forma~. which is composed of the sales tax, composed of the tags sold in the county, composed of property values; they take that all into consideration and they say that a county has to put up so much money. In numerous counties, under that formula, they require the locality to p1,1t up more money than they can possibly rai,.se under the present limitation of tax. So, in the first place, that is kind of ridiculous to use things in a formula that they have no right of setting a tax rate. So what we have done in this report, we have said that each county shall have a separate digest for school purposes, and that digest shall be on the basis of the cu~rent market value; just like the present law is now. It has been on the books for years. There is no change in that, For all school purposes. When that is calculated, the State puts up the difference. There is no penalty under our plan if the locality don't put up the money locally. Our contribution is still the same. Where the penalty is~ it is going to cause the superintendent in that local school to pull in his belt and operate. In other words, after we figure that charge-back, just like we do now, and if a

18
local school superintendent, or the local officials say: "We don't want to put up any more money on educatiqn, " well that means that that superintendant has got to pull in his belt to conform to the wishes of the local community. But it does not, upder our plan--he is not penali:z;ed one dime .for their failure to do it.
MR. HAWKINS: Mr. Chairman, he just doesn't get the additional money unless they raise it locally.
MR. THRASHER: We are not changing the present laws. The present laws call for it now.
MR. HAWKINS: The present practice, then, is different from the present law; isn't that right?
MR, THRASHER: I agree with you, when you have land down }lere that is being bought up by the thousands of acres, an.d being returned for three and four dollars an acre, it is a pretty good investment for folks who want to put money into it; big corpo:rations, where they don't want to pay taxes on it. That's a pretty good investment.
But really, on that charge-back, we also have a provision in her~, in this recommendation, that if in the event they don't have the money available, they reduce each one of these things pro rata. It places the responsibility on the local board of education to economically operate their schools, and if this law is enacted, the school costs within the four years in our opinion will be $10, 000,000 less.
Now here is what is going tq happen if you don't do it: 1 yoq. doJl.'t enact these laws now, and are going to give Education a little bit more money on top of what they have now, with no restrictions, thetl- a drive will be put on two years from now, the same as you spoke 0, will be put on for a teache:rs' salary scale, and this, that, and the other; that will l:>e superimposed on this uneconomical operMion at the present time .
.l;n the school system--! have seen it because we audit the Board of Education. Everybody tells you it is local. The State tells you: "l:tlo; we don't do it. That's local." Yo1,1 go to the local~ and they say, "No; that's not our job. That's the State's job. 11 In other words, Y0\.1 can't pin down the responsibility.
MR. BLALOCK: Mr. Cb.airman. I would like to ask the distinguished Auditor, sales tax Oil- services, are professional men included in that?
MR. THRASHER: No, sir. He doesn't render any se:rvices to the body (?) or intangible property,
MR. BLALOCK: Services such as mechanics. MR, THnASHER: Any repair work, or beauty parlors, or thi:Jtgs like that. Take, for instance, here is a situation of that nature. It was cited to us in a meeting the other day. A man built a _kitchen cabinet to go in a kitchen. He built that cabinet outside and brought the cabinet in and placed it in. He had to pay sales tax oil- the entir~ cost, whereas tile man that he built that cabip.et, UAder the old law, if he built it in the home he would only pay tax on the materials. MR. BLALOCK: How about a doctor? MR. THRASHER: The law has a specific provision to exempt medical.

19
MR. BLALOCK: I would like to remark it is pretty wide in its application.
GOY. GRIFFIN: I would like to make this application. Members like Ben Warren, and members of the General Assembly, some one-third of the members of the General Assembly being attorneys, what attitude would they take on professional? Mr. Warren.
MR. WARREN: Mr. Thrasher, while you are there, I think, gentlemen, that Mr. Hawkins has placed his finger on what is going to be not only a practical difficulty, but probably a fallacy in the for1nula, that this subcommittee and the Committee as a whole has devised, to require your local counties, or your county officials to underwrite their equitable part of your school system. He has tried to bring it out, and I think the Attorney General will agree with me, in pointing out one or two practical difficulties that we are going to have in enforcing it.
I served on the committee with Mr. Thrasher and I am in agreement with him in submitting this formula. The only thing is, the formula, I don't think, will go far enough--that is , the recommendations for i:tnplementing it don't go far enough to require that the counties do just what we have insisted that they do.
You said a moment ago, in answer to Mr. Hawkins, that we wouldn't penalize the county, but wu.ppose you have a county like this, now, Mr. Thrasher, that at the present time is permitting assessments of property, instead of at SOo/o, actually at about 15%, so in order for them to get the amount required to pay these teachers on this salary scale, they have actually got to treble the present assessments on the school tax digest-they won't for the county digest, but for the school tax digest we are requiring 15 mills, they would have to treble that.
When they undertake to do that--and I have seen an instance of that in the last few days in my own county, which is a small county--one of those hundred that you are speaking of, Mr. Hawkins--the board of tax assessors undertook to do it. They undertook to raise a minimum assessment from three to four dollars an acre for all land. They also undertook to take a straight 10% of the present market value of all improvements on those lands, which heretofore have always been simply assessed or turned in with the total value of the land. Tt is separately assessed this time. They had 26 protests filed, and requests for arbitration under a particular Code section that Mr. Cook is familiar with, and you lawyers and County Attorneys, I am sure, are; that would enable that taxpayer to file his protest to the increase in his assessment, naming his arbitrator, and the county then is to name their's, and those two to select a thi.rd one.
Last year there were 30-odd protests filed by taxpayers on the increase on assessments, and all 30 of them were sustained. That is, the protests of the taxpyers, all 30 of them were unanimously sustained by that board of arbitrators, and it went back down to where they were.
You have at the present time 26 that are on file . .I make the prediction that all 26 of them are going to be sustained, and they wontt be
in~creased.
Now this is the point I want to make, here. I think that certaihly the recommendations of the General Assembly for implementing legislation

20
so as to put the power or authority in your local tax officials to do what we are requiring them to do; they are willing to do it; they are willing to do it in my county; they undertook to do it; but they were defeated last year and they are going to be defeated this year; and that is this: That the Code sections that enable the taxpayer or property owner to come in, file his protest, name his arbitrator and thereby put the county--the burden on the county to name another one, and let those two select the third, and then when that 3-man committee of arbitrators returns their finding and puts it back, that those Code sections not be applicable to this special school tax digest. Now if you do that, you might substitute for thattaxpayer, or that property owner, some other means of appeal from the assessment on a basis of SOo/o, because conceivably a board of tax assessors might raise it
to more than what the property owner honestly feels is so% of the true
market value; but until you do do it--unless you do do it, you have maybe a hundred counties that will undertake, just a mine has, will undertake to raise these assessments and absolutely have their hands tied. They will absolutely get nowhere with it.
MR. THRASHER: Mr. Warren, as I understand it you have no objection to the report as it is, but you think it ought to be augmented by a different law tying down the method of assessment; is that right?
MR. WARREN: That1s right, Mr. Thrasher. I favor the report. I was a party to it. But I think this: If you don 1t do it, Mr. Hawkins is unquestionably correct in his prediction that the majority of these hundred counties that are now under the assessing the property at considerably le~u than the SO% of market value that this report is requiring, they are going to be short, they are going to undertake to do it, and if they leave the assessment where they are, which is about a-third of the 50% required, instead of being able to pay a teacher $2400, they will have a-third of the amount necessary to pay that teacher. They will have $800 of it and they won't have the rest, and the State will reduce the amount going back to that county proportionately to the deficiency that we have set up that they are supposed to raise.
MR. THRASHER: Let me make this observation: I think possibly you have a group in your county, Parent-Teachers, and what-not, that studied your education program in your county. Now the recommendation, as you know, i.n this report, is to have a separate school tax digest. I agree with you thoroughly, if we attempted to set up a tax digest for money for other county purposes, you would have all types of difficulties.
Now what we are trying to do, as you know, in this report, is to get it so that the ed.ucation will not tie itself in with the other administration of the county, hoping that the citizens who are evidencing so much interest in financing education, will deal with that educational problem, but will not enter themselves into the local county administration.
MR. WARREN: Do you think that the majority of them will do it if they see that their appropriations or revenue is backed to support the school system is gdng to be depended on?
MR. THRASHER: I have a feeling that these citizens that have been having these meetings, if they are sincere--! just have to assume that they are sincere--that they would go towards financing education but

21
they would not go towards financing their local county government any more than they do now.
Now the local county government has the right to raise the rates, and what11ot. The schools are restricted to 15 mills. Now in order to cure what would otherwise cure it, we would have to propose a constitutional amendment eliminating the 15 mills. Now we have two ways; one trying to get at it by the interest of the citizens locally, or attempting to put in a constitutional amendment doing away with the 15 mills, which I know wouldn't be adopted.
MR. WARREN: I would like to ask the Attorney General if the present laws with reference to a property owner's right to ask for an arbitration could not be excepted or exempted with reference to this tax school digest. He would still have the same right on this other property assessment, but as to this school tax digest, that he could not request and demand an arbitration by which both the county and he would be bound.
MR. COOK: Mr. Warren, you run into a constitutional question there as to the deprivation of property without due process of law, possibly.
MR. WARREN: Unless he is given a right of appeal. MR. COOK: He has to have a right of appeal under the Constitution. MR. WARREN: That1s right. Unless you provide some other means of submitting the appeal, I would say certainly we ought to try to devise a method of appeal to people other than a purely local gl:'oup, local citizens; that would be subject to all the pressures, day and night, after supper at 11:00 o'clock at night, with the taxpayers themselves calling on them, as I have seen it work. MR. COOK: As you know, Mr. Warren, to further allJWer your question, we discussed the possibility of recommending to the Legislature the creation of a board on the State level which we concluded would not be acceptable by the local people, and what we are trying to do is to put them on an honor system, if you will- -and I agree with you, in 1944 Mr. Ed Thrasher's father and I traveled all over Georgia with a delegation out of the Revenue Department trying to educate the Commissions of Georgia and the people on the necessity of requiring the people to comply with the fair market value statute. We tr~d to go to each congressional district, and found out I was abou.t to be run out of the State, and 1 came back to the State Capitol. But this not only carries the honor system, but the people that want education in the county, as Mr. Thrasher points out, will see what is being assessed, and they will be insistent to say that we want more fringes and frUls- -inconsistent to say that we want more fringes and frills and more enriched education, when we are not doing our part. They would be a little inconsistent. MR. WARREN: I don't think it's going to bother them to be inconsistent, if it keeps them from paying taxes. GOV. GRIFFIN: Thank you, Mr. Warren. MR. HAWKINS: Mr. Chairman, may I ask Mr. Thrasher one more question? In looking at the overall picture of the report of

22
recommended increases in taxes, isn't it correct that the report recommends approximately $65, 000, 000 collected on the State level as definite and certain, plus an indeterminate amount down in the counties?
MR. THRASHER: J.t doesn't make it mandatory. That's entirely up to you.
MR. HAWKINS: But in order to obtain the funds from the State, or obtain part of their funds from the State, isn't it going to be necessary to do it?
MR. THRASHER: No, sir. Under the formula it's just like you do now. You calculate what they should be doing- -just like you do at the present time--the State pays the difference. If they don't raise it, the State pays right on. What they do, when they make up these calculations of the local effort, that is charged back to them as their part of tre local effort. We go ahead and make the State allotment. If they fail locally, that's their own affair.
MR. HAWKINS: That's the same thing. They have to do it, to make their increases in salaries, and so on.
MR. THRASHER: They have to do it, unless they operate economically. Now a certain county I know of operates a school bus service and it costs them $46 per capita, and it costs another county $21 per capita. You cail.d save considerable money if they exercised judgment in laying out those bus lines and things. This program lays right in the local superintendent's lap the business of operating schools, and cuts out this business of nobody being responsible; either on the State level or local level.
MR. HAWKINS: But there will be a substantial increase in taxes locally, won't there?
MR. THRASHER: Not unless the local people decide to. MR. HAWKINS: 1 know they have the option, but in order to take advantage of your overall program, they will have to, MR. THRASHER: No; they will not. The figures that are used as charge -backs, the figures- -they are merely the calculations of what they should do. They still get the State's portion. GOV. GRIFFIN: They get the money today, don't they, Mr. State Auditor, with their local effort figured in? MR. THRASHER: Correct. GOV. GRIFFIN: About what they should do, but if they don't do it, why they get it. MR. THRASHER: Yes, sir. SEN. MILLICAN: Mr. Chairman, I have another point or two. GOY. GRIFFIN: The Chair recognizes Senator Millican, and then Mr. Melton. SEN. MILLICAN: I wodd just like to call attention to this: I am speaking, now, as Chairman of this Committee. I always felt, when I was Chairman of a commi~tee, I had an obligation, whether it was in the General Assembly or not, to bring in and tell what the committee said they wanted. I have sense enough to know that if there is one person in this State who wants to play politics with this, it certainly would be me, because I know that my political life is finished on the recommendations that I have made;

23
even saying that I sat in a meeting on this report. But I happen to be from the State of Georgia. I believe that the child in Townes County has just as much right to an education as my child has, here in Fulton County, and I can look right here and see one of the richest counties in south Georgia, the State is paying 91. 5o/o of every dollar that goes into the educational funds in that county, and the county comes up with 8. 5o/o.
If this digest is put on the basis of 50o/o and that s too much money, all that county has to do is reduce the rate on the schools to bring it back in line. If, prior to the time that we said that they would not get State aid until they levied a 15-mill limit, there were a number of counties in this State that didn't have any tax levy in the county, if you please. They ran the entire county on the lf gasoline tax; they paid the sheriff's salary, they paid everything else.
But now, how did we get ourselves in this position that we are hunting money? In 1951 the General Assembly appropriated to the counties another $5, 000, 000, if you please, and I tried to put an amendment in the Senate that it had to go on roads, and a member of the Senate got up and said, "We want to give it to the counties and they can do whatever they want to do with it, 11 and they got $9, 500, 000 of that.
I know that some of the counties in the State can't do too much, but if they have property assessed, as the gentleman says, at $3 an acre, and they bring it up to $8 an acre, and it's worth $16, and that brings in too much money in Walton County, then instead of having a 15-mill limitation on schools, they can have an 8-mill limitation on schools, in order to bring the amount of money up.
The thing I am saying is this: I went in on this committee on the basis- -and the other members know that I said it would be a maximum of $40, 000, 000, is what I am agreeable to doing, but you have two items, and you can cut those two items--one of them you can cut out. The other of them, you have to find the money from present sources. You have an item in here between 12 and 15 million dollars for increased teachers' salaries, with the 3, 000 additional teachers that you are going to have in the schools in the next 18 months, based on the number of children that will be there in these extra classrooms. That's one item you can eliminate entirely and leave the teachers' scale like it is.
The other item of $16, 000, 000 is to pay the interest on these certificates and the amount of the certificate comes due; you can't cut that out; you have to take that from some other source. Now there is $30,000,000.
It is easy enough to cut out the $11, 000, 000 for highways. You can bring the gasoline tax--and these gentlemen on the committee say that I was the first one to say I would go along and make the gasoline tax the same as in the neighboring states, although I happen to be in that business. I was willing. I would come along with the l/2f increase, which brought us up to 7f, and a little bit more, than what we are collecting now T}J.at and the tag tax. You can bring the tags back to what they are now; running from $1. 50 to $5. 50; but in order to get the Federal funds that are now available under the 60-40 procedure- -not under the Gore Bill or Eisenhower Bill but under the present law of 60-40, which used to be 50-50, you have

24
to have approximately $7, 000, 000 more in highway funds to match the Federal funds. And then the last General Assembly, upon the recommendation of the Governor, put in the Rural Roads Authority, of which $9,000.000 has got to come from somewhere to build those roads; and if you do that, then you have to take it away from the primary system, unless you can get this 12 or 13 million dollars that is recommended for those two items in highways.
You take those two items- -those three items- -highways, rent on the buildings in the University System, and the common schools, and the teachers I salary increase' and close down the Eugene Talmadge Memorial Hospital in Augusta; then we don't need to raise but approximately $4, 000, 000.
MR. COOK: Mr. Chairman, may 1 ask the Senator a question? GOV. GRIFFIN: Does the Senator yield for a question? SEN. MILLICAN: Yes, sir. MR. COOK: You stated that we might be able to do away with the recommendation regarding some 3, 000 new school teachers we will need. I wonder if that could not be misunderstood, because we cannot liquidate 30, 000 new pupils entering first grade. They have got to be taught. They have to have a schoolroom to go into; and a way to get there; so I don't believe we could even consider-SEN. MILLICAN: We could do it on this basis: Instead of a teacher teaching a maximum of 30 children, they would have to teach 40 children. MR. COOK: And that has been proven to be very bad, from an educational point of view,. I understand. SEN. MILLICAN: I want to call your attention to one other thing. That we put into effect a $200,000,000 school program. We replaced hundreds of cm;e..1 and two- and three-room schoolhouses in this State, that there had been no maintenance on them for years and years; the light and fuel bills were practically nil. And under this new building you are going to have practically immediately minor repairs, and you are going to have very large electric bills and fuel bills during the winter months, and things of that kind, which has to be paid for by somebody. EveJ;"ybody on the Committee knows my thoughts in connection with the deduction of the Federal income tax, where I wanted to even make a percentage deduction, and everything else, because I still think it is unsound, but we have to have the money. We don't want the additional services. Nobody wants to pay sales tax on services. Nobody wants to pay the additional income tax. We haven't heard anything from one or two or three of these other people; at least the people that handle them; such as the cigarette people, and things of that kind. We will certainly hear from the people that buy them, and so forth. But the question is simply this, and I want to call your attention further to this, particularly in view of the fact of what Mr. Hawkins says-I appreciate very much what he says, and I can agree with a number of his remarks. I don't think there has been enough economy made. I don't think we have had time to put in these economies. I was going to make the recommendation Monday, in a special assembly session, to set up a 5-man member of the General Assembly to bring some of these things out. What

25
we can do toward the Welfare Department in reducing the number of recipients and other things.
But two weeks ago a motion was made, and two or three members spoke in favor of it on this Committee, that we adopt every one of these reports that were submitted by the subcommittees. I opposed it on the basis that we did not know how much money this Committee could even conceive to recommend, and therefore not make it, but to accept these reports in principle. If these reports had been adopted two weeks ago I think it would have been mandatory on the 6-man committee to bring in $88,000,000, because that's what you gentlemen and lady on the Committee would have voted.
Instead of that we have scaled it down to this amount. and all of it except $7,000, 000--actually all of it except $3,500,000, if you leave out the operation of the Eugene Talmadge Memorial Hospital--is going into highways and schools, and we can certainly cut that out. I hope that this Committee will see fit to make some adjustment on the corporation tax rates, because I certainly don't want to get us out of line with other states.
I am not going to feel too good about the individual income tax rate, because it is going to make me pay some more money. Not that I have very much, but I have to pay them like anybody el$e. But at the same time it is just that simple, and I think what Mr. Hawkins has said, and others; that we have just about four items to consider. Those four items would take up about 90% of all of it.
Now let's get to the facts and the recommendations we made to the counties on homestead exemption. Everyone of us in this General Assembly that is here today and everyone on this Committee knows that the people will not vote away homestead exemptions; but the people did do this when they voted homestead exemption: They gave the right to the General Assembly that the homestead exemption be made anywhere from $1250 up to the maximum set in the Constitution, and the recommendation that we have made to the county is the fact that the county, either for school purposes, or for all purposes, can bring down the homestead exemption from $2, 000 down to $1250. The General Assembly is not doing it. They are
simply putting it to the county. Then if the county gets in a financial
crisis--and you gentlemen know in many of the counties in this state that there are many people whom the homestead exemption covers a 200-acre farm, it covers a 6-room house, with all of the other buildings around,
and everything else, and the fellow doesn't pay one Sf taxes. That is not
hundreds; that is thousands upon thousands. Therefore, we are saying to the county, if you gentlemen are in bad shape financially, then that is an avenue you can go out and get it. If you don't want to put it on general purposes, you can put it on school purposes.
I will make one remark about my own county in connection with that and that is the county school system in this county. There has been submitted to the people twice to remove the 15 -mill limitation and the people have voted it down, and I say that two of the good-sized counties or towns in this counties, that they do not get enough school tax to pay the faculty of one school, if you please; and if it were not for the 11/2-mill tax levied

26
on everybody that lives in the City of Atlanta, including every office building in Atlanta, the county schools in this county could not operate today in any shape, form, or fashion; and yet, when you submitted it to the people affected, to the people whose children are going to the school, they voted it down and said: We pay no more taxes. That's your situation there.
And that last statement is not helping me any! I say one thing, gentlemen, and I say it suits me fine: If we get this thing not to change any income tax, that suits me perfectly, because for 20 years I have opposed the deduction, and now if I go along with it I want it to be on the basis on the reduced rate of 4o/o, or something that will be in line with these other states. MR. COOK: Mr. Chairman, I want to say, for the benefit of the Senator: Having served with him on the Committee, that he has demon~ strated the most friendship for the taxpayers of Atlanta, Fulton County, and Georgia, of any member of the Committee; because he led the fight to scale the overall original recommendations down; he has said as courageously as he has said it here that he is not satisfied altogether, but wit;h reservations, for the benefit of the taxpayers, he has gone a step further and contemplates introducing a bill to further investigate economy measures, the possibility of economy measures, which we, as a committee, felt we did not have the time to do. I want to say that for the benefit of the politicians present and that the taxpayers may understand. SEN. MILLICAN: The only thing I have said- -and I will sit down-I have favored that I felt what we ought to give would be so much per pupil that each county, based on the ability of that county to carry on the difference in it and say: There it is. Now you run your schools. They didn't think that was feasible. To me it is as sound as sin. $162 in Mitchell County, then that's it. If it's $171 in Fulton County, that's it. And then let the local governments take up the rest of it. But I am not wedded to anything in connection with this. But I will say one thing: That I am, above all things, my political feelings or any ... thing else, that I am a citizen of the State of Georgia, and I want one end of this State of Georgia to prosper just as much as the other end, or any section thereof. If I can answer any questions-MR. MELTON: Mr. Chairman, I don't want to interrupt the line of thought that has been pursued by the last few speakers, but the gentleman from Clayton inquired whether the services tax would include professional men. SEN. MILLICAN: Yes, sir; it will. MR. MELTON: I would like to inquire whether it would include ad .. vertising. SEN. MILLICAN: The way it is written now, it would include all forms of advertising. MR. MELTON: Mr. Chairman, I believe the time has come to do some representing of the press, a little bit, and I would like permission to speak on that after the other scheduled gentlemen on the program. GOY. GRIFFIN: The gentleman has that privilege. Lady and gentlemen of the {::ommittee: I am not speaking--you know

27
my feelings nn connection with this Committee and subcommittees~ and certainly I cannot phrase the lady and gentlemen enough for the work they have done in an endeavor to arrive at something to suggest to the General Assembly; that we continue a program of progress and development in our State.
First I think I should mention this fact about State finances at the present time. If you will remember the last time the General Assembly passed an appropriation bill, and at that time the provisions of the appropriation bill called for an expenditure of funds in the amount of approximately $235, 000, 000. My distinguished predecessor in office in his budget message to the General Assembly requested no increased tax measures and no additional new tax measures, but to reenact what we had on the statute books at that time, so to speak. In other words, he realized that the current tax measures at that time would bring in only about $225, 000, 000. He proposed and did, to take $10, 000, 000 each year out of the surplus funds for a 2-year period, to supplement the $225, 000, 000, or approximately $225,000,000 coming in each year, so as to balance the budget and not engage in deficit spending, so to speak. The General Assembly did that.
When I took the oath of office on the 11th day of January we had approximately $1, 500, 000 in the surplu~;~ fund; a very small amount; $1,500,000 is a lot of money, but on a State budget of this size it isn1t very much money, with the various demands made upon the chief executive for things of merit. He says he is not going to give out a nickle, but when they CcPJW1.fnd say: If we don't get $65, 000 for a laboratory for a multi-million]chicken industry, why, we give them the $65, 000!
I make mention of that for this reason: We had no surplus funds and yet we were going to be, on our obligations, ten or 12 million dollars in the hole if we couldn't do something about it. In other words, we would have to back up ten or 12 million dollars. But the State Department of Revenue, and the State Revenue Commissioner, set in to tighten the loopholes in our present tax measures--and I want to compliment him on his diligence and his work. He has collected enough, I think, in additional taxes, to balance the budget. In other words, put us even with the board. For that I am grateful, and I am sure you members of the General Assembl1 are grateful, and I am sure the people of Georgia are grateful for this work on his part.
Now I work in close cooperation with the General Assembly. The members of the General Assembly hold the pursestrings. The Governor of the State can do nothing without the cooperation of the General Assembly. Let me reiterate that I deeply appreciate the splendid cooperation that I have received from the General Assembly since I have been privileged to serve as chief executive of this State; and their sincerity of purpose and desire to do a good job; and I have the utmost confidence in the integrity, ability, honesty, and sincerity of pUrpose of the members of the General Assembly, and they are going to do, I know, what is right for the people of our State and our institutions.
Now the cost of government cannot remain fixed. It could remain fixed if we didn't have a number of factors to consider. The first of these

28
is the progress we are making. We ar~ increasing in population. We are increasing in wealth. We are increasing in other fields. These 30, 000 additional children who will be in school in September, I can make no provision for them under the present set-up, even though we do collect enough money to get even with the board.
I can do nothing, or substantially nothing, about increasing the efficiency of the highway department, and certainly meeting increased matching Federal funds, as Senator Millican said. Today we are putting $13, 000, 000 matching Federal funds in highway construction of Federal aid projects under the new set-up in Washington they are making available $19,500,000 beginning July 1st for Federal aid construction. It isn't mandatory that we match those funds, but indeed it would be shortsighted not to do so in the opinion of your public servant.
So I say, then, if we are going to continue the program of progress and development in our State, we are going to do for the school system what we need to do; then we are going to have to give consideration, not today on what we are actually doing at this time; we can get by with that; but tomorrow, next year, and the years to follow. That's the thing I am concerned with, and I am sure you are concerned with it, What are we going to do in the future.
As to our Department of Education, I certainly agree with the statements that have been made here about practicing every available economy, because when the General Assembly appropriated money at its last session for common schools, the General Assembly appropriated $95, 000, 000. That doesn't include teacher retirement. But when my predecessor put a
6o/o budget cut on it, it drew it down to about $89,000,000, and then he
gave the school department $15, 000, 000 out of surplus funds, which ran it back up to $104, 000, 000. Well, today we have to consider what we are going to do about this school program in the future, We have to take into consideration the ability of our school department to get competent teachers at the rate of pay our school teachers are receiving today.
One senator said to me yesterday: We are concerned with the welfare of the common school system first, because the laws don't make it mandatory to send a child to college. There are laws on the books that make it mandatory to educate our boys and girls in Georgia, and that's the thing we are interested in.
Now I am going along with the General Assembly. We work as a team. But I think it incumbent upon the chief executive to make recommendations to the General Assembly that he thinks are right and proper, and give his reasons for so doing, and I hope when I approach the General Assembly at the proper time with these matters of finance, and state-in State Government, that I can put it down clear-cut for them, one that is crystal-clear, as to what we are actually going to do, what we are trying to do, and what the money will be spent for. They are entitled to know.
I would be glad to- -as the fellow said- -forget this whole question, as it would certainly be easier on me. But take the matter of the gasoline levy and tag tax levy. I1F approximately $10, 000, 000 in additional revenue comes in for the Highway Department, half of it on 1/2 a gallon increase in motor fuel, and the balance, the other half, on the increase in tag schedule, making $10, 000, 000, and $7, 000, 000 of it to match

29
Federal funds, and the other three will be used in a half a dozen different places, such as reconstruction and maintenance which is so badly needed in this state. But that recommendation I shall make at the proper time.
Now on the school program, if we are going to have my fourth year in office 120, 000 additional children in school that we don't have now, 120, 000 divided by 30 would be about 4, 000 additional teachers, 4, 000 additional schoolrooms, bus transportation and other expenses incidental to the operation of the common school system.
So we might as well plan on that, and if this is a good plan, then I want you to make the recommendation. If you don't think it is a good plan, then of course don't make it, because I have the utmost confidence in your integrity and ability, and in the final analysis I shall have to make, on the first morning of any session that is called, the necessary recommendations to the General Assembly.
But I am deeply grateful for the help and counsel and advice and the work and the long hours of drudgery that have gone into the preparation of these reports and the work on the part of the members of this Committee.
I am not trying to stonewall anybody, but I say if we are going to do this job, let's do it together, and I am sure that what your final decision is, will certainly meet with my approval.
Now in conclusion let me sum it up in this way: If there are certain things that you don't agree with in this subcommittee report, before it is adopted by this 21-man committee, why then certainly it is just and proper that we have an airing of those things, and straighten them out, and I agree with Mr. Warren about the placing of the burden on the individual counties, and how we are going to accomplish that; and certainly I agree with the Senator--! don't think I need to tell you my interest in seeing Georgia continue to get new industry. I have been over certain parts of the nation and there isn't a day goes by that I don't make some phone calls, trying to tell the people in other sections of our country what Georgia has to offer for them if they will come here and go into business.
I am not unmindful, either, and sometimes I think we take a lot of our blessings for granted, of the splendid contribution of industry in our State; industry located here now, and industry that has been located for many years; the splendid cooperation, contribution that Georgia has received from these industries towards progress in our State and towards the prosperity of the people.
Now there is one thing about it we haven't discussed, and l think if we pin-point those things, about the net corporate income taxes, and perhaps this county thing, we could get down and talk about whether we are going to adopt this report, or not.
SEN. MILLICAN: The Attorney General called attention to the fact that last year the State took $10, 000, 000 of highway money contrary to the provisions of the Constitution due to the fact that there was no appropriations bill, and used that for highway purposes.
GOV. GRIFFIN: I am glad the Senator made that point. Now about our corporation tax in Georgia: Certainly I do not want Georgia out of line. You cannot sell something that you have to apologize

30
for. North Carolina does :::1ot per1nit the deduction of Federal income tax
in paying State income tax, and have a 6o/o net corporate income; but North. Carolina doesn 1t charge a 3o/o sales tax on building material, either; when
a new industry comes into that State, and when the Rayonier {?) Corporation came to Jesup, Georgia a.nd built a $5,000,000 operation, they paid about $150, 000 on a 3% sc-:.les tax.
South Carolina has a 5% corporation tax, and the State of South Carolina does not pen-nit a deduction oi Federal income in making out the state income.
Alabama- -I believe you said 3% and they do allow the deduction of Federal income, in rc..akb.g out the state tax. But the present Governor has made such a reco:m.rnen.:iation.
Well, in t-:y~ng; to get som.e industry in Georgia, I point these things out, because I would like to see us settle, here, before this report is adopted--
SEN. MILLICAN: I woui.d like to make the change from 5% to 4% and the Federal r..ot b~ alloJ\red.
MR. WILLIAMS: I wuuld like to discuss that a little bit before we get into it.
GOV. GRIFFIN: Of course Mr. Williams will have that privilege when the motion---is there a second made on it? The motion was in this report to amend it by striking this figure 5 and substituting in lieu thereof the figure 4. Th0 p::op-:!r p!.ace for the discussion, Mr. Commissioner, is right at this point.
MR. WILLIAMS: .Mr. Chairman, and members of the Committee. In the first place, when the Committee, trying to seek out ways of securing the revenue to fin;nce the services that are going to be needed, the method of trying to secure those fi:Jances, and to try to spread them out in the manner in which it wo,1ld nurt the least, and spread them out equitably, was figured on by the subcornn~ittee. Now in studying your corporate income tax structure and t:1e eff.ect that that will have on industry in Georgia, yo~ w:ll :f~nd that o: the additional amount of tax that the State of Georgia woult:i secur= by the dis'3.llowance of the Federal deduction, that it would amount to appro:dr.."lately 50% that would come that they would have in a decrea~e i:o:1 thei:: Federal income taxes. Thereby the portion that you would !."ece~ve b;r that, one f~ature would hurt the economy within the State ptobabiy the leas~ of any other tax program that we have, unless it was also son~~thi...J.g that would be deductible from Federal income tax.
Now when you begin to study the tax structure of the several states and the ones surron:.ldins us; that is, leaving out Florida, which has no income tax whatsocve~c; yoJ. find that your sister states do not have the same provi.sion for .::orpo.::ations as far as your laws carry back and carry forward. The ac~:.~lere?.ted rate of depreciation for new and expanding industries. Yoll will iind qJ..i!:e a nurnber of items where the State of Georgia has g:ra:::1ttd privileges to corporations that would put us, I feel, on a fair basis with r.nost oi our sister states.
Of course there is no u~e can compete with Florida, as far as your income tax st:':ucture is conce.:;:-::.1.ed, because, as the Governor said, they have a cons!ita.f;;i;::me<.l p:r:'chib:tion against income tax in Florida.

31
You would need to remember this: That first, and in the recommendation of this Committee, you had a corporation income tax rate, we have that presently on the statute books, of 5 1/2%. The committee took that under consideration and reduced and recommended a reduction in your corporate rate of 5o/o, which I feel would put us on a fair basis with your ot:P.er states.
Now you drop back into the sales tax feature, you will remember that when your sales tax was put on, sales tax and use tax was put on, it was put on tb replace and did replace, as far as that goes, a 5-mill state property tax which was abolished and written into the Constitution, re .. writing that to one-quarter of 1 mill. That's your sales tax. They pay at that time whatever amount they pay on the material that is used; they pay it one time and that winds it up.
I just wanted to give the full membership of the Committee the benefit of the other items that the State of Georgia now allows, and the fact that the subcommittee did recommend a reduction in the corporate rate as well as some reduction in your individual rates, in their overall recommendations; and frankly I think that the thing that will hurt our economy the least is the amount of money that we can cure out of this item that is virtually matched by the Federal Government, because the corporate rate is 52% for Federal taxes.
You want to remember this: That every time you reduce your corporate rate, when we reduced it from 5 1/2 to 5, that would cost your revenue approximately $2, 500, 000. If you reduce it another 1% it would be approximately twice that; $4, 800, 000 to $5, 000, 000 is what it would cost the entire revenue program.
Thank you. MR. CATES: Mr. Chairman. GOV. GRIFFIN: Mr. Cates. MR. CATES: First of all let me say to you, Mr. Chairman, that the appointment--that my appointment as representative of business on this Tax Study Committee has been both highly enlightening and enjoyable, and I appreciate it, Your Honor, and I want to add my co~lllendation to those that have already been made to several--by several of the others to the entire study Committee, and particularly to Senator Millican's Committee for a tremendously fine job, and I devoutly hope that Senator Millican is wrong in his pll:edittion that his political career has ceased. There are two or three points that I would like to call to the Committee's attention. On page 5 of the Committee's recommendations there are sections under section "G", subsections 1, 2, and 3, pertaining to additional taxation on cigarettes, liquors, beer and wine. Should those tax increases be effected, or should there not be some reduction in those, I think that we should seriously recommend some manner of more strict enforcement on that, because we are not only going to throw a lot of people out of business--it is my understanding what you refer to in the press as usually reliable sources, that we in Georgia are selling and drinking more illicit whisky than we are legal whisky already; and it is easy to predict the end result of that, unless something were done in that connection.

32
On page 7, under Section "G", subsection 10, which has been already mentioned here, our organization, as most of you know, is very active in industrial development, and I. would like to say "Amen" to what the Governor said about his keen- -and I might add highly effective interest, in industrial development in this State. We have professional indus-. trial engineers in our organization, and we are continually soliciting new industry for the State of Georgia. That is kind of a kissing-cousin to our governmental department, because they go hand-in-hand together.
The industry and business of the State of Georgia, I think no one could hardly deny the fact that industry and business of every sort in our State has always, with a minimum of objection, been willing to go along and pay their fare, if not a greater share of the tax load, and I think tha,t they very sincerely and purposefully intend to continue to do that; because no one could benefit by these improvements in our State's economy more than business in general.
On the other hand, as the Governor has already mentioned here, we are in a dangerous position of getting ourselves into the shape of killing the goose that laid the golden egg in this section 10. Subsection 10 is kind of like saying: Which do you want to do? Do you want to take rat poison, or arsenic? Maybe it is going to become necessary for us to do that, but I certainly hope that the Committee will give that very serious consideration.
Under your Exhibit "A" of your Education committee report; that is Exhibit "A" on page 5; would recommend that the report, the final report would include the provisions--recommendations to the General Assembly that an independent business firm, a management-consultant firm-there are any number of them--be employed to investigate thoroughly the State Department of Education. The reason for singly that out again is that it is accountable for such a large amount of our money. That's on page 5 of the exhibit. This would be an addition to it.
MR. THRASHER: You wanted to add to it. MR. CATES: Yes, sir. A recommendation that this independent study be made. Because that's a common practice within business. I know that there are two or three business institutions in the State. Freeman Strickland's bank, I know, has just recently had one of these surveys made. It is a common practice, because it usually results in finding some additional economies and efficiencies in operations. I think it would be well worth the rather nominal cost. MR. THRASHER: Mr. Chairman. I would like to point out to the gentleman that the State of Georgia, in past years has spent considerable money in employing outside agencies, and I have never, in any one of those reports yet, found them to accomplish anything. MR. CATES: You might be referring to some reports that might have been made for the Board of Regents where educators are engaged to come in from outside, supposedly impartial. I am not suggesting this survey be made by educators of our educational system. MR. THRASHER: Let me make this suggestion. I also know that considerable study has been made by outside parties on the Expressway and all their recommendations had to be completely reworked at double

33
cost by the Highway Department before they do any good. MR. CATES: Of course I wouldn't be familiar to what you refer to
but I can cite instances where Stone & Webster, just one of many wellqualified firms, could unquestionably come in here and go over our State operations, which is impractical if not impossible for- -well, even you to do, with your intimate knowledge of the State Government. And I am quite certain that they could find many economies and additional efficiencies which would result in savings and better operation.
GOV. GRIFFIN: Mr. Cates, of course I respect your judgment in these things. I have been around here 15 years, and I can't find out much about the Department of Education. I don't think there is enough money in the treasury to pay to do what you want to do. I don't mean that in the way of criticism, as it might have sounded, when I made it. But there is no doubt in my mind that somewhere along the line that we need to run a closer check on all the departments of the State Government, and what you are talking about is giving it more of a business aspect. I agree with you thoroughly.
MR. THRASHER: We have banks-MR. CATES: This is not an original idea of ours. It has been tried in other states with exceptionally successful results~ and I will be glad to gi~U~ur.w~~.the reports.
Dld'"tb.at e!fect some economies?
MR. CATES: Yes, sir; it very definitely did. GOV. GRIFF.fi\J": Did it call for the expenditure of any more money? MR. CATES: No, sir. GOV. GRIFFIN: Mr. Thrasher. MR. THRASHER: You had to pay the consultant. MR. CARES: Yes; you had to pay the consultant. GOV. GRIFFIN: Our trouble is when we set out to improve ourselves, the overhead improves materially~ MR. CATES: Just one other suggestion. On page 7 of this same Exhibit "A", we would suggest--here is the old controversy again--but it is an economy. It has been proven by some 14 other states to be an economy. That subsection 22 be added which would provide for driver training, special driver training of school buses, and for physical exc;lminations; certain miniinum physical requirements of the bus drivers, as a safety factor. That section 23 be added which would provide that the minimum age for school bus drivers shall be 16 years of age, which would conform with our other minimum age legislation. SEN. MILLICAN: That was brought up in discussion, but none of the members of the Committee felt that they would be responsible for the basis of recommending a student. That was discussed very thoroughly in connection with driver training, and I have a copy of the Bill recently introduced in one of the other legislatures, setting up this special training in the schools. But the members of the subcommittee felt that they themselves would not want to be the one that would recommend that we reduce the age of drivers of school buses to 16 years of age, and then have an accident in this State, or something along that line, and a number of school children

34
be hurt. Personally I think they would get along as well as a lot of the
drivers they have now, or even better, but that was the way this committee felt along that line.
MR. WELCH: Mr. Chairman. Couldn't the law be written- -I will ask the Chairman of the subcommittee--a permissive law allowing the county boards of education to allow such, in their discretion?
SEN. MILLICAN: I believe that that is now in the law. GOV. GRIFFIN: l think that is the law now in Atlanta. Is that correct? MR. COOK: That is correct. SEN. MILLICAN: Those children 16 \tears of age can't vote. That's one of the reasons they are not allowed to drive the buses. I will answer that. MR. CATES: There are some counties who do use student drivers, but at the present 18-year age it doesn't allow them much time, because ordinarily they are graduated at that age. MR. COOK: I presume what he had in mind primarily was the reduction of the age requirement, because under the present law it is permissive. That is to reduce-MR. CATES: It is permissive to reduce the age. Practically, however, at the 18-year age, they don't have any time left. MR. WELCH: Mr. Chairman, I didn't want to miss any of the talks, and therefore I have been sitting here and I am getting a little weary. I think about a five-minute recess would help all of us. GOV. GRIFFIN: What is your pleasure? We have a motion at the present time, and of course the motion was open for discussion; made and seconded. When we dispose of the motion-MR. WELCH: Yes, sir. I had forgotten about the motion. GOV. GRIFFIN: In view of the remarks made by the Commissioner of Revenue I think I want to say this, and I think I can refer you to the gentleman who just spoke here: That business indications show that the two states in the Southeast right now, who are receiving a greater percentage of industry than Georgia, are Tennessee and Alabama. North and South Carolina are not. The question is this: That if the income tax rate in Tennessee is 3 3/4% net, if the Alabama per cent is 3o/o with . Federal deduction, of which we know there is going to be some change, because it has been recommended by the Governor, then I think we ougkt to go slow before we go to the basis of 5%, and lose out. Then i.f we find out that these other states do come up, if we find we are not in position to do the things we ought to, then we can come on the basis of saying something else is to be done. I want to say--I hadn't thought about saying this--but I want to call attention to the fact, and which I am sure the Commissioner woid agree with, and one of the reasons that this came out i.p the subcommittee that this recommendation. be made is the fact that due to the very high Federal income tax, due to the question of excess profits tax which has been on for several years and is now off but can go on, due to the carry-

35
back provision, and many other things, that there was a company in this
state that last year made better than $3, 500, 000 and didn't pay Sf into
the State Government. There was another cop.cern that was over a million dollars that did
not pay 5, due to these provisions; and I say, and disagree with the estimates of the Commissioner, that if the rate is put at 4o/o, the deduction which has been recommended by the subcommittee here be wiped out, that I think we will get many, many millions of dollars in income tax that we are not getting, from that standpoint; and I hope that the 4% will apply instead of 5.
MR. WILLIAMS: Could I ask a question? SEN. MILLICAN: Yes; I would be glad to. MR. WILLIAMS: That reduction in rate also would be a reduction on the portion we are now getting; is that not correct? SEN. MILLICAN: Oh, yes; it will; but I say, I don't know hardly of any corporation in this State that won't pay more, even with 4%, if you take away the Federal deduction, because even a little, teeny-weeny crorporation, he is in a 40% bracket, from that standpoint. When he gets a little bigger, he is in the 52o/o bracket. GOV. GRIFFIN: Mr. Thrasher? MR. THRASHER: I would like to make a substitute motion for Senator Millican's motion. We started out and discussed very thoroughly a 4 l/2o/o rate, and as a substitute for Senator Millican's motion I move it be made 4 1/2%, instead of 4o/o. GOV. GRIFFIN: The Chair will place the substitute motion, of course, first. The substitute motion--if the substitute motion prevails, the original motion is not germane. You have heard the motion on the part of Mr. Thrasher. A substitute motion in the subcommittee's report, a recommendation on corporation tax, that the figure 5 be stricken and the figure 4 1/2 be substituted in lieu thereof. Those who favor the substitute motion will please raise their hands. (Hands raised. ) GOV. GRIFFIN: Mr. Secretary, count them. Reverse your position. Those opposed, raise your hand. (Hands raised. ) GOV. GRIFFIN: On the substitute motion, the Ayes are 10 and 6 No's. The substitute motion prevails. What is the next order of business? It would be in order, now, to effect substitute recommendations. What is the pl-easure of this body with reference to the suggestions made by Mr. Warren; that being in the form of having the Attorney General prepare some r~medial legislation in addition to this report for the consideration of the General Assembly. Was that your idea? MR. WARREN: Yes, sir. SEN. MILLICAN: Second the motion; that the Attorney General be instructed to draw the necessary legislation. GOV. GRIFFIN: You have heard the motion made and seconded that the Attorney General be advised to draw remedial legislation on the preparation of the school digests of the counties. Those who favor the

36
motion, say Aye. (Ayes responded.) GOV. GRIFFN: Those opposed; no. (No response.) GOV. GRIFFIN: The Ayes have it and the motion prevails. And I believe the gentleman from Spalding had the request to be
heard on some provision of the--the advertising provision of this sub .. committee's report, and the Chair now recognizes Mr. Melton, the gentleman from Spalding- -with the admonition that he speak Qoldly.
MR. MELTON: Lady and gentlemen of the Committee, members of the General Assembly; you will recall that when it was first suggested to our Committee a tax be levied against advertising, that I opposed it as vigorously and strenuously as I possibly could. Now I ask you please to consider this on the basis of its merits; not as a purely selfish matter on my part as a county newspaper editor; but think of it in broad, general
te~ms.
Consider :(irst, if you will, that advertising itself is a very b:r;"o~d field. In advertising we have many, many media. Amonst them we have television, radio, newspapers, billboards, direct mail; even the signs that hang on the elephants' backs at some circuses. We have every possible, conceivable type and means of advertising our products.
Let me say that to single out one, two, three, or four of these media would be gross discrimination against other media. For example, how would it be possible for a state to determine how much money a man spends in direct mail advertising and levy a tax against that. Would it be possible, my friends, to levy a tax against the network program of television and radio that originates without the State?
In the field of newspapers we have two types of advertising, generally speaking. We have advertising which comes from within the State and which is classified as local advertising. We have adverti,sing which comes from without the State and which we classify as national advertising. Would it be possible that you levy a tax against advertising which originates in New York City, Chicago, or any other city in the nation that comes into Georgia? How could it be enforced, and how could it be collected?
l bring this to your attention primarily for this reason: On the newspaper, which I edit, our advertising income is divided ~ough,ly 90% local advertising, and 10% national advertising. This scales down on the
smaller newspapers, many which are in your home towns, to as low as Z or 1%, or even less than 1o/o national advertising, which, as I said, \WI].d
be impossible to levy and collect. A careful perusal of the large metropolitan papers will show you
that the national advertising percentage scales up to 25% or more in some editions. Perhaps even higher in some which I have not seen. Thus we find that the larger newspapers would have a larger percentage of their revenue tax-exempt than the smaller, independent, locally-owned, home .. owned newspapers. This, I submit, would be the grossest type of discrimination against the home-town editors and newspapers, and the people who own their papers within Georgia.

37
The same thing applies to your television and radio, of course. With a larger percentage of the television stations' revenue comtna in from network programs, the independent, newly-organized, arowina television industry within the State would be penalbed. Those which oper .. ate on a local basis, and have not been able to make a network connection as yet.
The same thing is even more true as applying to radio, bec&ule aa you know, we have very many locally-owned amall, independent l'&dio Itationa in our Georgia cities and towns which have no network affUi.ation.
Thus if advertising were to be taxed, it would be on the local bah and if exempted on the national basie you would have discrimination against the whole industry.
Furthermore, my friends, there is only one way that the tax upon advertising could be handled, It would be passed on, alone, to the individual advertiser, and he, alone, would pass it on to his individual customer and higher prices for the products which he sells.
It was brought out that food was a necessity to life, and food ill taxed. I submit that that's absolutely true, but at the same time if we tax advertising, we will be taxing food even higher, because the individual grovery stores which advertise their food would have to take this tax and tack it on top of the price of the food.
In other words, I submit it would be double, triple, or even quad .. ruple taxation on certain items.
Now in Georgia we al;ready have the 3% sales tax. When this Jalel ta:x was introduced, much to the surprise of eome people the Georgia news .. papers did not oppose, and we do not oppose being included in it. You wUl recall when it first went into effect, and ever since, that the newspaper have been paying the 3% general sales tax upon our circulation. We do not oppose that. I think it is only right and fair. We will not oppose that. But, at the same time, if we turn around and place a 3% services tax against advertising, ladies and gentlemen, we have two sources of revenue in the newspaper business; that is, circulation and advertising. Already our circulation is subject to a 3% advertising tax. We pay a 3% use tax, just as the manufacturers themselves do. Our employees pay State income taxes on their own earnings. The owners of the newspaper !I pay income tax upon their profits. lf we should tax our two, and only two
sources of revenue, it would amount to nothing more or less than a gross
receipts tax upon the newspaper industry of Georgia. You will recall that I believe in August of 19Z9 a gross receipts
was passed in Georgia that applied to every industry, every business, an~ so on; with the exception of those that did a business of $30, 000 or le11. This gross receipts tax was in effect about two years and it was bnp;rac-
tical, unfair, and discriminatory. If we can talk about a gross receipt1
tax, lady and gentlemen, let's talk about a gross receipts tax on every business; not just on the newspaper, television, and radio businelli and, boy, I will stand here and vote against that as quick and fast as I can,
MR. HAWKINS: Mr. Chairman, may 1 ask a question? Do your remarks apply to all these salee taxes on services as well as to adver-
tising? Does the same line of reasoning follow with re!erence to all of

38
them? MR. MELTON: Mr. Hawkins, I am speaking primarily on ad-
vertising. MR. HAWKINS: I am thinking--this is a friendly interruption I
have interposed, here--but I am thinking probably your argument applies to all of these taxes on services listed in item 9, here.
MR. MELTON: That, of course, is the item which I am discussing. MR. THRASHER: Do you buy advertising or sell it? MR. MELTON: We sell advertising. MR. THRASHER: You wouldn't pay "it, would you? MR. MELTON: As I mentioned, it would have to be passed on to the individual customer. Of course, it wouldn't be on the sale of advertising. Of course you understand, Mr. Auditor, when you add 3o/o .to the price of the product, you increase 3% to the price of the product andrut down on your volume. I am not as familiar with television and radio as I am with newspapers, but generally, I interrupt the term "press" to mean television, radio, newspapers, and all other means of disseminating information, and as a person representing the press, I assume it also was to represent the other media. We have, as far as I can determine at the present time, 34 states and the District of Columbia, which have some form of sales tax. Of these 34 states and the District of Columbia, 27 specifically exempt advertising revenue. Whether the other 7 do or do not, I have not been able to determine. I think some of them do; some of them probably do not. Of the 14 other states in the Union, none of them have any gross receipts or sales tax. None of them levy a tax against advertising. Also, it is extremely interesting and informative to me to discover that of the 27 states exempting advertising, 22 of these states also exempted the tax on circulation, which we pay in Georgia, which I say we did not oppose and do not oppose, but 22 of the states with sales tax felt it was best, apparently, to exempt circulation revenue entirely from advertising. I have attempted to outline, generally, the reasons for my opposition to this. You remember before that I gave a number of arguments against it, which I won't labor you with again, but do bear in mind that I contend that advertising is a great source of producing business. That is the best way I know to stimulate your economy, and to penalize advertising, sooner or later would penalize the stimulus and economy of your State. Furthermore I ask you, please, to bear in mind that to levy a tax against advertising and to exempt network programs, and to exempt national advertising in newspapers, would be a severe kick in the groin to your local, individual, home-owned newspapers, because it would be discriminating against them in favor of those who have larger tax-free income. I ask you, please, to bear these things in mind; not only on a personal basis, but on the effect it might have over the State. As the State Auditor brought out, it would not be a tax against newspapers, but it would be a tax against people who use newspapers and other means of advertising. At the same time I don't think it is at all inconceivable if a 3% addition were made to the price of advertising, that you

39
could expect, certainly, a 3% reduction in much advertising. I also ask you, please, to bear in mind that we have never opposed
a tax upon our circulation, but if we have a tax upon both circulation and advertising, we thereupon immediately will have a tax upon our gross receipts, which is unfair, discriminatory, and wrong, I think.
That concludes my advertising remarks. I want to say something else. I want to thank the Chair for appointing me to this Committee. It has been a great pleasure to serve with each member of it. I have full confidence in what you are doing, and when the report is adopted in its final form, I expect to work for it as hard as I can. But there has been one other thing that has happened in this Committee that has not been a surprise to me, but it has been a shock, to see to what extent it has happened, and that is the fact that the Federal Government hamstrings us, hogties us, and binds us up with a cord of red tape so that we cannot, within the State, do the things that we want to do and the things that we should do with the money that belongs to us in the first place. As you know, the Federal Government comes down, picks up the local tax, takes it up to Washington, saps off the cream, sends it back to us, and we find out, as we have found out in this Committee, and in the roads program, it requires that we build heavier and a more substantial type road, and a more expensive type road, than our State engineers know is necessary. We have found many, many, many instances of this in the Welfare Department, where he is hamstrung and hogtied, where we can't do anything with that. I bring this out with the hope that the members of this Com.n1ittee and the members of the General Assembly will tell their folks back home, so that they will understand the situation that we are getting into rapidly in this country, where the Government is seeping down from the upper echelons, in the bureaucratic offices in Washington, and coming down to Georgia and other sister states in the Union, instead of reaching up to the local level as we know it should in this union~~'of states, and I hope, too, that you will bring to their attention the fact that when we get money from Washington it is not a hand down; that we are only getting a percentage back of what we paid in, to begin with. That's extraneous to the matter under discussion, but I did want to bring it out because it has been a most impressive thing to me during the 3 -months 1 delibe rations. I thank you. MR. THRASHER: Let me ask Ouimby a question. Do you think it is best for us to finance our education program locally, or wait until we get Federal funds? MR. MELTON: I am whole-heartedly opposed to Federal aid to education, Mr. Thrasher. I think, to begin with, that if we have Federal aid to education, as you well know sir, that we will have Federal dictation as to how these funds are spent. I am firmly convinced that if we have Federal aid to education--maybe not tomorrow, but sooner or later, we will have Federal dictation as to integration of the races in the classrooms.

40
I think that the Federal Government has already gotten into too many programs which, by right, belong and should belong to the State. I think the Federal Government got out of these programs, turned them back over to the State, let tr.e State raise the tax money, we could do it better, cheaper, and we would be a hundred per ce::r~t b<:;tter off than we are at present. I am against it,
GOV. GRIFFIN~ Amen~ (Applause.) GOV. GRIFFIN: What is the pleasure of the Committee? MR. MELTON: Mr. Chairman, in my excitement I omitted to make a motion. GOV. GRIFFIN: In disposing of one item at a time, the Chair recognizes Mr. Melton for the purpose of making a motion.
MR. MELTON: I move that in the Committee report on page 6, paragraph 9, "Sales Tax on Services. 3% on labor and/ or materials for
services rendered in connection with tangible personal property, to the person and for repairs to existing tangible property," I move that we insert the following:
Exempting advertising. MR. HAWKINS: Mr. Chairtnan, I want to offer an amendment to the gentleman1s motion. I want to offer an amendment that item 9 on page 6 entitled "Sale~ Tax on Services" be deleted in its entirety. GOV. GRIFFIN: That's a right far reaching amendment! You have heard the substitute motion. Of course the substitute motion would be put first, and if the motion prevails . the motion of the gentleman from Spalding would not be germane. There would be nothing to tie his motion to. Is there any discussion? SEN. MILLICAN: Ouestion. GOV. GRIFFIN: Those in favor of the motion of Mr. Hawkins, that section 9, "Sales Tax on Services", be stricken from the report of the subcommittee in its entirety, those members of the Committee wro favor the motion, will please raise your hands. Mr. Secretary, count them. (Hands raised. ) Those opposed, same sign. (Hands raised. ) GOV. GRIFFIN: On the motion to strike section 9 in its entirety, "Sales Tax on Services", the Ayes are three and the Nays are 9, an.d the motion does not prevaiL Next in order is the motion of the gentleman from Spalding, that in section 9, on "Sales Tax on Services, 11 that it apply in every other respect in that provis1.on except as to advertising. Those who favor the motion of the gentleman from Spalding will please raise your hand. (Hands raised.) Those opposed; same sign. (Hands raised.) On the motion, the Ayes are three, and the Nays are nine, and the motion does not prevail. The Chair recognizes the gentleman from Hall. Mr. Overby. MR. OVERBY: Mr. Chairman, and members of the Committee, members of the Legislature, and other visitors to this Programs Study Committee: I am concerned with one item which is on page 4, and on

41
which I have had numerous telephone calls. It is Exhibit "A", page 4, and the last paragraph on page 4 and the first three lines on page 5. I am not as fully familiar with the adult educational program as I would like to be. However, I have had the matter rather forcefully brought to me in the last two or three days on the adult education program, and what it is doing in the State.
Certainly I think that we ought to be as61_ually concerned with our adults who are trying to better themselves to secure better jobs and a better way of life. We should be concerned with them as we are in providing for the eiucation of our children through a high school level. The report recommends that the State aid for the vocational education be stricken and at this time I want to make a motion that the last seven lines on page 4, Exhibit "A", and the first three lines on page 5, be stricken from the report.
MR. THRASHER: I want to second the amendment, but I want to make a statement in connection with it. As chairman on the subcommittee on education I would like to second that amendment in striking that, so that in later sessions in the General Assembly, or at a later time, more study can be given to that item as to how to work out an equitable system of handling it. So I second the motion striking it at this time.
GOV. GRIFFIN: You have heard the motion of the gentleman from Hall, seconded by the State Auditor, that on page 4, Exhibit "A", the last paragraph with reference to adult education, and on page 5, the first three lines; that this section of the subcommittee report known as Exhibit "A" be stricken, or deleted. Those who favor the motion of the gentleman from Hall will please raise your hands. (Hands raised.)
Reverse your position. Those opposed? On the motion the Ayes are 16 and the Nays are none, and the motion prevails. MR. COOK: Mr. Chairman-GOY. GRIFFIN: And these sections hereby referred to are deleted from the subcommittee report. MR. COOK: Mr. Chairman, I move the adoption of the report as amended. GOV. GRIFFIN: D0 the-COL. GUILLBBEAU: Second the motion. MR. WELCH: Mr. Chairman, I would like--! don't know if he would allow me the privilege of withdrawing the motion, but I would like --there are one or two sections, and I will allow him to limit me as to my remarks, but there are one or two-MR. COOK: Sure. I am delighted to withdraw the motion for that
purpos~.
GOV. GRIFFlli: The Chair recognizes his Honor, the Mayor of Marietta.
MR. WELCH: Mr. Chairman, lady and gentlemen. First I wish to commend the subcommittee with regards to subsection 2 of H on page 7, wherein it is stated that the Committee provides for or recommends the enactment of a law to give municipalities the right to levy Gross Receipts or Payroll Tax of not over 1/2 of 1 per cent. I wish to make myself clear

42

by makL"l.g that :r.ema.rk, ...-1 ,";~.,a.t I :rn.ay rept::?.t wha~ Mr. Melton stated a minute ago~ to n.:.ustra;;e wha~ I ha~e .l.:n :r.nind, and that is he said that the Federal Govern.:nen:.r; .h::ts hamstrung us. a.r.d I think that is true in t~at the F ederaJ Govern::-~'H:~~'l'"; o.ali>, \.n ~r.a:;;r v.ra} s, ;J:~a.ced burdens upon the State, and arl. t:b.~ :.=o~a.;e!,~. !..n ,;hai; i':: derives S;uu;~ces c,:f revenue from the most lucrat~ve ~50ci:r.ces; bu.t by tl:10: s;:,;::ci.e H~J:<.en ~:1.ay l call your attention to the fact that t~1.1~s S;;a.te, ar.ui praccic;.Ey a}} statesp t1C't maliciously,

perhaps; no~ by des~gn; bu.t :ln. fad:, has du:-:1e the sa"ne thing to municipalities that the Federal. 2oFer.n:e:.1.ent has d.one to the states, generally~ in that the State of rJeo:rg"ia, by vi:~.<::t;.e of its h::r.;.ader powers and its greater

powers, I think un.w"i.tticg?.:r. ha.B taken. 5.way or 'i.n fact never did give to

municipalities, the pc-.lllel' o doi:::.g wna:; this Comn:jttee now recomn1ends in one particular. As I say~ for :;hat reason., I want to commend. I

would prefer that you. had go!'!e :Cur.ther an.d say that you recognize the

rights of municipa.!it'i.es ;o se.rve the cit:.zer..:c~y o{ the :nurdcipalities, and

not only do ycu reco:rn:nJ.end the enz:.:;::t:n'lent of such a law as you have thus

recommended, but added ther':":to any other t::~.x n.ot i:::1 conflict with the

Constitution of the State cf Georgla" Then we would have local help. We

would be enabled. by such legisla::7on !:o prov7.de many of these things that we are now calli.D.g t.1.pou the S.~atD of Geo~~gia to provide for us.
The t:zoo~tble of you.r J.ocaJ. govern:r~J.er~ts in going to your State Government is that we do not have the po\.~:er to help ourselves. Now that

is the poi..TJ.t I am trying to m.c.ke.

However. 1 appreciate this s(ep forward. It is too limited in its scope, however, and I say, whe1; the Genera~. Assembly meets, and I want

it to go into the record, that yc;u do not rest:t-~.ct it to one little measure. We will take care of th".:r...gs back hom.e :~i you wil:!. allow us to" We won 1t be coming to the State ask{(l.g fo~ a hand-out, as it was mentioned that we have to go to the F ede:r.>al Gove:cn.~r..e:;:c.tv because :: you will give us the right to help ourselves back. ~n the respedive i:nun5c1.paHties in the State of Georgia, we will do the job, aD.d ~'e wcn 1 ~. ask for anybody 1 s help. Please keep ~:hat in :r.c:!iid.

I

sav that J

bv A

wa-..1:

of

re:,.:, ;edtk:n

fo:.'

the

:reason

I

see

some

of

the

members of the Ge:n.e:;,a~. Asse::-.nb:~y here, 'I'hat 1 s what we are asking for.

We need back ill the ~un~:.c:;.paJ:J.tie s :tr~oney to upen>:~e the municipalities,

even as the State of Georgie. n..eeds 1T.LO!>ey-; a::-~d r c..:~:n he!'e to help the State

of Georgia- -and let .;he::>e be ::w m::~stake abou.~ that 9 Governor Griffin, GOV. GRJFFJN~ Than.k Y'c!Uo

MRo WELCH: Bu.t I do 8af, at i:he san-:.\e t;.:me, let the same help

and the same thinkb.g apply ~:o lTim1ici:pa.:Lh1.es. Now the ge,tHern.a:n o;rer h~;,:re Tevresents th~ cou..'":lties" He is quite

able to speak for the coun.tieso :;: e.peak 5:or. !;he municipalities. Now I a.m get~ir:.g dGwr. .:.:o, o::te t.?-,).:ng :fro:o:n experience, and I direct

your attention, :may it pl.~ase i7J.is Co;:n..'Yli.ttee, to ite:o:n 3 of page 5 in re-

gard to your reco:nrr.nend.atic::::>,c-; o-r: a:o. -;ncre;j.se on beer and wine tax. Now

let me preface my r~n1.arks" There is n-.:, xr.1em.beto of my family that is in

the beer or wine b;lsiness. I de not ha.?e any (riends with whom I am

intimately corrnected, or even kD.ow, wltc ar.t: i:1 ~he beer or wine business. But by experienc~" I can ~hi.s t.o ;roar att:enb.en~ i{ you do not now know it:

43
You can overtax--! am not saying anything about liquor and I am not saying anything about cigarettes, and I don't know anything about wine. I speak about beer. I do know a few facts about that.
When I took office as Mayor--and this was generally true, I understand, in most cities over the State- -any city assessing a business license tax of, say, $so, $7S, or perhaps a maximum of $100 per business-Marietta was doing that. That was insignificant. But during the latter years, most of the municipalities, Governor, and members of this Committee, with regard to beer, have been doing and are doing now about what this Committee proposes what the State do, and that is put a tax on the volume of beer. If you do that, you are really going to cripple the beer business, and I say, I speak from experience, we are not now having many applicants for the sale of beer in Marietta for the reason that we have gone ahead; we are ahead of you on this proposition; and we, in addition to the $so or $100 per business, we put it on the bottle by volume and by keg and by the barrel, and we have as much as they can take, and I know it from experience, because our revenue is dropping off.
In other words, year before last it was $ss, 000 in the city of Marietta alone in beer. Up to that time it had been about $1000, on a $50 or $100 license. Last year it was off about $3, 000 and it is off this year; I mean in the immediate, fiscal year; and, frankly, I tell you, for no other reason than to give you my belief, and I try to present it honestly, that it is because of this tax.
Now i.f the State comes along and puts this additional tax- -as I say to you, from some of the men who sell it, and from the lack of applicatins as against what we had when we didn't have it on there, I believe that the tax alone is the cause of the loss of revenue, and if you add that much on, I can say this: That it will definitely hurt the municipalities in that partie ular. I am positive of that. I wish you would keep that in mind; the members of the General Assembly; when you come to that, I say I am speaking for revenue for the State of Georgia, and Governor, and members of the Committee, to show you I am not seeking to deprive or lower the amount that should be raised, I am willing to go ahead, even as you have done, for the municipalities Gross Receipts tax, I now stand before you, and it is going into the record, and now recommend that.
In addition to that, Governor, to show I am behind you, and knowing that you do need money, that I would also recommend that we put a tax, if we find it necessary to get the amount, whatever the amount may be, on soft drinks- -and on peanuts and popcorn, if you please- -and on any other item, -- including advertising. I am for it, but as I say, as two have already said, you can kill that old goose that lays the golden egg; and I say that from no other reason than from my own experience during the last two years with that particular commodity.
I have never been given--1 don1t think I have ever been given a bottle of beer. Therefore, I couldn't be influenced. I will admit before this body some of my good friends have given me, occasionally, a fifth of whisky; yes. But I am not saying anything for oragainst that. lf you think they should be taxed, I could not say it. We do not sell whisky. Therefore, I do not know what the volume would be on that. I say from the

44
experience in Marietta. and from the experience in other towns, and that's what I want to direct your attention to.
I am for your program. I want to help your program. But I think you can hurt yourself by that particular item.
MR. BYRUM: You are not against the 2 or 4~on the beer on the 12 ounce bottle or can, but you would like for it to be put on the case or the volume, I believe you said.
MR. WELCH: No, sir; you misunderstood me. I say that practically all the municipalities, and the counties-~! don't know whether they sell it in his county" or not, or how it 7.s in the other counties, but the majority of your municipalities have your volume, as well as a business license tax, and that combined is as much as it can absorb. I know, because we don't have the applicants now we had before this went into effect. There is just no profit in it now.
MR. COOK: Mr. Chairman, for public information, may I clarify one thing? I appreciate very much what my old friend and college mate had to say. I agree we do reach points of diminishing return inthe field of taxation, sometimes; but there was one observation made, and I think the public ought to be advised about it, that soft drinks are already bearing a 3o/o sales tax, because they pay on the gross intake, and that includes Coca-Cola, soft drinks of all kinds; so the soft drinks people are not--we consumers of soft drinks are not getting out of that tax.
MR. WELCH: I believe I made the statement I was all-inclusive on all items. I agree with it, and I say I appreciate it very much, but I do feel we ought to straighten the record out about soft drinks.
GOV. GRIFFIN: I appreciate that information, and the Chair appreciates the splendid spirit of cooperation on the part of the distinguished Mayor from Marietta. We appreciate those remarks.
MR. COOK: I will resurrect, if possible, my original motion: The adoption of the report as amended.
MR. MELTON: Will you hold it up just a minute? MR. COOK: I certainly wilL MR. MELTON: The first page of the consolidated report strikes from its report that bookmobiles be financed only from local funds, and I was delighted to see that. For example, we have an original library that had an original investment of $105, 000 in books, for the purpose of clarification--! do not know the thinking of the subcommittee, of course, but on page 9 of the educational report there are three other lines which are close kin to the bookmobile, "It is recommended by the Committee that the State Board of Education limit the books purchased under the textbook program to books used in classroom instruction. 11 Last night I was at a meeting of the Kiwanis Club in Jackson, Georgia, which has a small library. The town pays the librarian's salary, provides the building, and all other expenses except for the purchase of some books which are bought through this program. That Club passed a resolution requesting that these three lines be stricken out, and I so move, that these three lines be removed from page 9. MR. THRASHER: Mr. Chairman, the chairman of the subcommittee-as chairman of the subcommittee I would like to make the motion that the

45
that the words, ''and also library books, 11 be added to the end of the sentence.
GOV. GRIFFIN: This is another section. For the purposes of clarity the Chair will read this short paragraph: ''It is ire:ommended by the Committee that the State Board of Education limit the books purchased under the textbook program to books used in classroom instruction, 11 and the substitute motion of the State Auditor is to add thereto, to those three lines in that paragraph, ''and also library books.'' Those who favor the amendment, vote Aye.
(Ayes responded.) GOV. GRIFFIN: Those opposed; No. (No response.) GOV. GRIFFIN: The Ayes have it and the motion prevails. Does the Attorney General reiterate his motion? MR. COOK: I reiterate my motion. I move, Mr. Chairman, for the adoption of the report as amended. MR. THRASHER: Second the motion. MR. HAWKINS: Is that a debatable motion? I would like to say this, in connection with that motion, that in my remarks earlier in the morning I didn't intend to give such a vigonous dissent to the entire report. However, I do feel that we have had a very full discussion on many items in connection with this report, and I personally would like to vote for its adoption. I feel, however, that there are one or two items that I honestly think should be deleted from the report. I am particularly opposed to those parts of the report that have to do with making it obligatory upon the counties to increase their ad valorem taxes. There are some parts of paragraph G 11 11 on page 5 that are recommended that I, and perhaps other members of the Committee, might be opposed to. I would suggest that some of these items be taken up separately. I know the time is getting late. GOV. GRIFFIN: I think this, Mr. Hawkins- -and of course, as Chairman of the Committee I deeply appreciate the freedom of thought and speech that we have had here, and the sincere desire to work this thing out, and I am satisfied that- -I don 1t believe- -I believe it would be well nigh impossible to get together on all provisions of the report, an absolute unity in thinking. I don't believe that we can arrive at that. Now I may be wrong, but I am satisfied that there are some things there that you don't agree with, and perhaps there are some things that other members of this 21-member Committee do not concur in. _ MR. HAWKINS: As I say, I don't want to give the appearance of disagreeing so violently with the report. I think it is a good report. I think a lot of work has been done, here. GOV. GRIFFIN: Of course the meat in the cocoanut is going to be when the members of the General Assembly get it. MR. HAWKINS: I think it will. MR. COOK: Mr. Chai!'man, on my motion, I am opposed to one or

46
two items in there, myself, but this motion if carried of course just simply places the report inthe hands of the General Assembly. I don't remember any General Assembly that ever felt that it was mandatory it pass anything that a committee recommended. I am just anxious to get it to the General Assembly.
GOV. GRIFFIN: On the question, that this 21-member Committee do now adopt the report of the 6-man subcommittee as amended. Those who favor the motion will rise and stand for a counting.
(Members rise.) GOV. GRIFFIN: Those opposed; same sign. (None stood.) GOV. GRIFFIN: On the adoption of the subcommittee's report as amended, the Ayes are 16, and the Nays are none, and the subcommittee's
:l;'eport is adopted.
Next in order would be a recommendation of this report. The Chair will entertain a motion for the proper recommendation.
MR. THRASHER: Mr. Chairman, first I would like to make a motion that our Secretary be instructed to immediately have not less than 2., 000 copies of this report printed for distribution. I would like to make that as the first motion.
GOV. GRIFFIN: Is there a second? MR. OVERBY: We didn't hear the motion back here. GOV. GRIFFIN: The motion of the State Auditor was that this body do instruct by appropriate action the Secretary of this Committee to have 2., 000 copies of this report printed for members of the General Assembly and for otl:ler interested citizens of Georgia. Is there a second to that_ motion? MR. COOK: Second the motion. GOV. GRIFFIN: There is a second to the motion. Those in favor of the motion will raise their right hand. (Hands raised.) GOV, GRIFFIN: Reverse your position. (No hands raised.) GOV. GRIFFIN: On the motion the Ayes are 12; Nays, none; and the motion prevails. MR. THRASHER: I would like to make a motion that the report be transmitted to the Governor of Georgia and the General Assembly for appropriate action. GOV. GRIFFIN: The State Auditor makes the motion that the report be transmitted to the Governor of Georgia and to the members of the General Assembly for appropriate action. Is there a second to that motion? SEN. MILLICAN: Second. GOV. GRIFF IN: Those in favor of the motion will raise your right hcmd, (Hands raised. ) GOV. GRIFFIN: Reverse your position. (No hands raised.) GOV. GRIFFIN: On the motion the Ayes are 16 and the Nays are

47
none, and the motion prevails o At this time I know the lunch hour has long since arrived- -as
the distinguished Senator says, "Horrible," and without attempting to put any of these gentlemen in any way on the spot, I want to express--the Chair would like to express his appreciation and express the appreciation of the members of this Committee to the members of the General Assembly who are visiting here today, and the Chair would like to call on them- -not in any particular order~- -would like to have an expression, if they care to make one. Not to be presurnptive on the part of the Chair, but we certainly are dependent on the General Assembly for final action, and if there is anything any member of the House or Senate would like to say, or be heard, the Chair would be delighted, as the presiding officer of this Committee, to recognize them at this time.
** * * *
GOV. GRIFFIN: Again let the Chair express appreciation to the members of this 21-roerober committee for the splendid work you have done, and I hope that some time in the not too distant future the Chair can express proper appreciation to you for your effort and your labors, and it will be my intention next to take your recommendations to the members of the General Assembly for their consideration.
I think this: I might say, to give you a little idea of procedure, that I intend to follow and that is that these matters address themselves to the members of the General Assembly for their consideration, and it is up to me to make the necessary recommendations to the General Assembly, and I intend to take time in the very near future to ask you, or ask the members of the General Assembly, to convene in appropriate places to discuss this State Programs Study Committee's recommendations, and to get the recommendations and to get the thinking of the members of the General Assembly on this program, and I want to assure them, when that time comes, that I am only interested- -1 have no axe to grind- ~in what we can do to improve conditions in our State in all fields of endeavor, but certainly in the fields of education and highways, because it is a known fact that if we have good schools, good highways, and good churches, good health department, we are going to have a progressive and growing State. We are going to have a State where the people are more prosperous 0 We are going to have a State where our people are happier and have a State where there is more individual opportunity. In short a State, which to do a business, do a better business, earn a livelihood, and rear our families. When we have done that, then that's all we can do toward the betterment of our State's business.
I would like to see a program adopted during the remainder of roy tenure of office that 1 would not have to come before the members of the General Assembly and ask the members of that body for another dime. I would like to see, and I want to cmnmend the subcomrnittee again- -.J think we get somewhere, when we get down to the proposition of what is the per capita cost of education for each individual child in Georgia, and we figure it on. that basis, so that if we are pra;perous in Georgia, and if we increase the population to a great extent- -if we have 400, 000 additional children in the years to co:me and are proud of ou:::- State and the progress

48
we are making, then we will know by this yardstick what this cost of education will be, and we won1t have to worry every year or two years about how to figure out what we are going to do and how we will do it.
Too, as I said at the beginning, I am extremely interested in seeing us integrate industry and agricnlture, and the more industry we can get, the more jobs and job opportunity people will have~ I don't want to do anything, certainly, to discourage the establishm.ent of new industry in our State, because I believe in the future. Our basis for increased collections will have to be on increased wealth, and the more we can get, the better off we will be to shoulder these responsibilities, and to bear the burdens of citizenship, and in all our travels~ the State Department of Commerce, the Georgia Chamber of Commerce, in these other sections of the nation, to e:p,courage new business to come to Georgia, we have not held out as any inducement freedom from the payment of taxes, or freedom from the responsibilties of citizenship, because it wouldn1t be fair to these fine businesses that have contributed so much in the past to the progress we have made in the development of our resources...
In conclusion--and I know the hour is late--! thank you again for this splendid service on your part, and I will be glad to have your counsel and your advice. I wish the members of the Committee, wherever possible, would make it a point to take to members of the General Assembly and leaders in your respective commun.ities about our situation, and--! may be too optimistic, but I am going to say this in conclusion: We have trouble in the world on account of Communism. we have trouble in Washington because we are interested in girding the free nations of the world in an all-out fight against Communism. We may have some trouble in Georgia that I don1t know anything about, but so far as our economy is concerned in Georgia, I want to say that these are critical times. Not when we have increased in population and wealth and are going forward in Georgia; I don1t think it is too much of a problem" I would rather say that these are challenges to the people of Georgia as a growing State. They are challenges-~yes; responsibilities, but they are not as much of a problem as they are challenges to our folks.
Of course now when the General Assembly gets this question, they may decide otherwise, but then--
SEN. MILLICAN; It might be a problem, then. GOV. GRIFFIN: Yes; it might be a problem when they get to them; but we can only do that and trust it to our welfare. The General Assembly is the governing body; the people 1s representative; and if the members of the General Assembly know what the people want, and know what is right, and I am sure that they do and I have the utmost confidence in them, now I, for one, believe that we are going forward and not backward, and will not turn my back on progress in Georgia. Now I stand corrected and will go along and am delighted at any time to have the counsel and a.dvice of Georgia citizens, and certainly I should be governed by the best thinking of the General Assembly. Mr. Duncan. MR. DUNCAN: I just want to say this" As Chairman of the University of Georgia Committee of the House, I want to thank this 21-man

49
Committee for recognizing the urgent needs of the University System of the State.
GOV. GRIFFIN: Thank you, and we received a report from your committee and express appreciation for the amount of work done by that comm:i*:tee or.. the Ud.ve:r.sity Syp,t;em.
MRS. KENDRICK: M:r-. Chairman, before you adjourn., may I personally thank you as my Governor for th~s hon.or of serving on this Committee, and to the members of this Committee my deep appreciation personally, and as for the group that I represent--parents.
We realize, as parents. we receive all of the benefits that you so laboriously, honestly, and faithfully labor over and give us from these halls. Sometimes we do want the frosting thicker than the batter, but with your understanding, with your guidance, Georgia will continue to be the progressive State that she has always shown that she is, and will be.
Count on the parents of the State; the youth that we are trying to rear; to help maintain these goals and these ideals that you are fostering for us, and may I at this time thank. the press for their kindness and their tolerance; each person here and in the entire State Capitol building, Governor, for the very hospitable way that you have received me from the time I park until I go back home to my family.
Tom appreciates the many courtesies and hon.ors and the service that we, in a small way, have been privileged to render, and I pledge to each of you, whether you are a banker or member of this illustrious body, my full cooperation and what little influence I might have in getting the women out to support your program.
Thank you. (Applause.) GOV. GRIFFIN: Mr. Byrum. MR. BYRUM: 1 want to thank you for the appointment. It has been quite an education to me. I represent labor and the recommendations of this Committee are not very far from the way we see it. In other words, we have a little report going to the various representatives, and there is not very much difference in the report that we have accepted here today. I want to thank you also for the remembrance of the flowers when I was in bed- -and I am with you a hun.dred per cent. MR. COOK: Mr. Chairmano I would like to make a motion. I move that this Committee resolve to express our appreciation to the press, radio, and television for the cooperation and consideration they have given us during our studies. GOV. GRIFFIN: You have heard the motion of the Attorney General that this Corn.m.ittee do go on record in expressing appreciation to the press, radio, television-MR. COOK: ! hope ! haven 1t left out a media, there~ Or make it all media for exchange of information.~ GOV. GRIFFIN: AH media for exchange of information to the public. Those i.n favor of the motion of the Attorney General, vote Aye. (Ayes responded.)

50
GOV. GRIFFIN: Opposed; No. (No response.) GOV. GRIFFIN: The Ayes have it, and the motion prevails. SEN. MILLICAN: I move we adjourn, subject to the call d the Chair. GOV. GRIFFIN: You have heard the motion of Senator Millican that this State Programs Study Committee now stand adjourned subject to the call of the Chairman. MR. THRASHER: Second iL GOV. GRIFFIN: And the motion is seconded, Those who favor the motion~ will vote Aye. (Ayes responaed.) GOV. GRIFFIN: Those opposed; No. (No response.) GOV. GRIFFIN: The motion prevails. Thank you again, lady and gentlemen. (Adjournment at 3:00 P. M.)