GOVERNOR RIVLI'cS t .t<'IRST MESSAGE TO THE
- GENERAL -i-\SS:-=E-M-BL-Y
JAJHJAHY 25, 1939
11:30 A. M.

MR. PRESIDENT, MR. SPELKER, LADIES AND GENTLEMEN OF THE ASSEMBLY:

I want to express my own gratitude, and the appreciation of the people of Georgia, for the promptness, seriousness and sincerity with
which you have organized and entered upon the dispatch of your duties
at this session. I want to congratulate you further upon the splendid selection of officials and the fine committee assignments of the presiding officers.

The editorial comment of the press of the State is almost uni versally commendatory of tho fine beginning you have made. I hope, and predict, ttat at the close of the session you will have so~ _ courageously and intelligently met and solved the legislative problems of the State govern~ent that the people and the press will have
cause to commend your entire session as they have its bec;inning.

This is no time for demagoguery or the bitterness of partisan-

ship. It is no time for political bickering or factional jockeying,
or fqr political position, Both you and r, for the moment, are the
c.ua:i".Qd.i.N'\a A,-f 1J.f-~~e ~-~t-10,1-s, the happiness a.1"1.ct welfare

th@' people of this gJ"ea.t State. We sought ou1., respective positions

of responsibility with a full knowledge of the problems involved.

The least we can do to justify our tenure in office is to work to-

gether in a spirit of mutual helpfulness to attain a greater goal

for Georgia. I pledge you my wholehearted support and cooperation to

that important end. Cooperation is not a one way street, it involvos

both giving and receiving. One has no right to expect to receive co-

operation unless he gives cooperation. Therefore, I am fully and

freely giving you my cooperation to the end that I may/merit yrur

cooperation.

thereby

Looking to this session, I invited each member of the Assembly, without regard to faction or views, to sit in a full-day conference with me and other members prior to the convening of this session in order that we might talk out, in as great detail as possible, the problems facinG the State government and this session of the Assomblyo The vast majority of you came, at your own expense, and I received
great good, as I believe you did, from those conferences. I am sorry some wo~e provonted from providential and business reasons from attend-
ing, I know you were with us in spirit. And I want to officially
r3c.ngnizo th0 patriotisn and sacrifice of these members of this asscrnhly who came to Atlanta and attended these conferences in propnrat::.:-,,Jl for this session., Tho people of tho Stat0 have 0vory reason
to lk.ve confidence in men and women who so diligently and sacrificially seek to improve their services to tho pooplo~

'Ih8 greater part of my background in public service is clust,Jrod
about tho walls of this hall and tho Sono.te Chamber across th0 corci d0r, Frnm my service horo, and tho!'e, I think I know both tho hoaetthYIJbs anc1 tho hazards ot a GuoPgin Gonoro.l Assembly. My undorsta.:d in_~, t 1~r:,11e;h my s orvic o in this body, has co.us ud mo, and now co.us c :-: me:, 1 +:0 f,::,)~L 1."'oenforced in my work as Govorncr when you are in Gf-ss::i_':-ln, liy sc,le ohJective is to increacrn t:1e incul'.!0 ar<l. improve tho 1N0llt,e,..'.J.p; 0f cn,_r p9oy,le, Your objoctivG is the same . 1Nlth such mutual obJec:-
tivcs. there should be no incentive lurkin~ in our hearts save striv-
ing ,::;o best agree in the attainment of those prime purposes.

During my first term as Governor I have worked hard, night and day, to try to make you and the people of Georgia a good Governor. What has been done in the State government during this period of time can, and should be, appraised by the people's representatives. Whatever mistakes have been made should be diligently pointed out and as diligently corrected.
I congratulate you upon the appointment of committees to canvass the various departments of our State government with a view to effecting any economies that can be made without sacrificing essential governmental services. I assure you, as your Governor, I shall stand shoulder to shoulder with you in effecting any further economies in the administration of the State government that in your wisdom you feel is for the best interest of this State and our people.
My first term as Governor has been a most ~trenuous one. With the help of the 1937-1938 Assembly, we have sought in two years to overcome much of the neglect of several decades. A perusal of the acts of the 1937 Assembly, the Constitutional amendments voted in the June election in 1937, and the acts of the Special Session of 1937-1938, reveals a vivid picture of the tremendous administrative task devolved upon us during the past two years, Instead of detailing even in a general sort of way the setting up and functioning of these splendid governmental services during the past two years in this message, I will work with your committees appointed for the purpose of canvassing the admini~tration during this period and furnish them any and all information they may think relevant to a thorough undorstanding of what has been done during this period. I know we have made great strides forwe,rd and that GeorgiG and our people have advanced far along. fundamental lines during tho past two years.
This is especially true in giving an impetus to the incentive ror homo-ownership, by lifting the burden of taxation from the homeowner and the household and kitchen furniture people; in public health; in education; in social security; in the conservation of our soil and other natural resources; in the planning and building of highways; in the protection of life on the highways; in planning and co-ordinating the governmental activities for the future development of the State; and in uniting with our sister states in a regional effort to advance our State and section in the eyes of tho Nation.
In addition to deto.iling th,1so efforts to tho proper committees of tho Assembly, I will transmit to the Assembly from time to time detailod written reports from each Depo.rtmont of tho State govornmont, which you will have an opportunity to study in segregated f3shion, not only as a matter of information ~s to what has boon doc, but to enable you to determine what should bo dono with respect to these activities in each instance in the future.
ECONOMY
Wo are all undertaking to extend economy in tho administration of tho state government to tho utmost possible dogroo compntiblo with efficient sorvico to the pooplo. I nm glad you o.ro making a serious study along this lino at tho very outset of tho session.
However, regardless of tho effort you mo.kc, regardless of the effort I make, and regardless of tho effort the heads of tho departments of tho sto.to government make, to this end, we cannot atto.in tho economy and efficioncy in tho sto.to government to which tho taxpayers in this state arc entitled until the Assembly enacts some definite and offoctivo form of merit or civil service system for emnloyin~ people in tho State govornmont. Tho State Democratic Platform0 of 1936 urged tho passage of such a law. I urged it in my messo.go to both tho regular and special sessions of tho 1937-1938 Assembly. The Horculoo.n tasks boforo tho Assembly during tho past two yonrs wore such that this moo.sure could not be given o.s serious study as was essential to socuro its passage, although it did pass

tho Sonnto, both nt tho rcgulnr o.nd tho spocio.l session, during 1937-1938. Tho Sta.to Democratic Convention of 1938 a.gain wrote tho m,Jrit or civil sorvico lr:w into tho plntform and, on this, my first, mossngo to tho Assembly of 1939, I wish to empho.sizo tha.t no nd,Jquo.to attninmont of economy nnd efficiency in tho State government is pos siblo, in my opinion, until tho cnnctmont of this lm1. Porsonci.lly, I think tho law should apply to every omployo0 now with tho Stnto govornmcnt, on n competitive b~sis, tho so.mo ns those nsking crr.ploymont in tho future. I think thnt only mnnunl lo.borers, tompornry omployoos, o.nd policy-determining sub-hunds of dopo.rtmonts should be oxcoptod from such o. lnw. Hovrovor, any form of m0rit system tbo.t you mny nuthorizo to be sot up will be n stop in tho right direction, and if you do not a.gruo with mo in the extent to which the lei.w should go, I D.m willing to o.grco 'Ji th you on tho extent to which you o.ro willing to go in this field. I boliovo thnt tho Assembly could evidence its good faith in sJoking economics and efficiency in stnto Government in no better vvo.y than immediately pD.ssing such a lo.w o.t tho very outset of this session, thereby enabling us to set it up and start it functioning while tho Assembly is still in session and co.n have firsthand observation of its functioning from the beginning. Until such a law is passed further economies and efficiency in the state government will be only spasmodic, haphazard, and short-lived, no matter who is Governor, no matter who heads the departments and no matter who constitutes the Assembly.
You authorized us to set up the Highway Patrol on a merit bnsis through a special provision in the act creating the patrol. I point to the carrying out of the merit provisions in the functioning of the highway patrol as evid0nce of the effectiveness of a bona fide administration of such a system in the other departments of the state government if the Assembly will give us an opportunity to do it.
~n my recent visit to Washington I was told by several Senato~s and Congressmen that they regarded it as certain thnt this session of Congress will require the merit or civil service system in employing people wherever federal funds are spent in the future, both strictly federal expenditures and those expenditures matched by the various states. While a merit or civil service system may have objectionable features, in my opinion, the benefits far outweigh these objections. The fino.l form of passage of the bill should be such as to reduce the objectionable features to the minimum, yet furnish a maximum opportunity for its benefits.
Finally the extent of its benefits will depend greatly upon tho good faith and effectiveness of its administrntion. I recognize that the Assembly cannot write into the lnw the details of salary schedules, classifications and work assignments. I know that these are matters that will depend upon its ndministration. These are difficult problems of the administration of a merit or civil service system. Howevor, I nm willing to undert8.ke the ndministrntion of such n system, and I assure you that every good faith will be followed in its 0.dministr:1tion. Cortninly the opportunity to snve this money nnd to secure this incrensed efficiency should not be denied tho people of tho Stnte by failure to pnss such logislntion.
When the Assembly h.'.1s wn tched our Cldministr8. tion of the system for two yen.rs, if it hns not nttnined the benefits clnimed for it, or if, in its ndministrntion, it develops we hnve not been able to make its benefits fnr outweigh its objections, then the Assembly of 1941 can, and will, repenl it. The demnnd for a merit of Civil service system, for economy and efficiency, will never be satisfied, until it is given an opportunity to demonstrnte 'Nhether it will do whnt is claimed for it. As soon ns such an opportunity for demonstro.tion is hnd, nnd the matter is determined on the bnsis of our ovm experience with its opero.tion, the better position we will be in to determine our future policy with reference to the ndministrntion of the State government ns to personnel.
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Such n system is entitled to o. friendly ::-,dministrntion of it. Such D. system instnll -,d under nn ndministr.'."-t:i.on thn t is unfriendly or lukewa.rm towo.Pds i t , c ouJ.d not h1.ve the opportunity to succeed, 1.s if inst'.'l.lled under nn ndministrntion enthusinstico.lly friendly towards it, ~s I assure you is the attitude of this ~ate o.dministr,1.tion.
I, therefore, recommend immodi.'.1to p:_1ssnge by tho Assembly of o. merit or civil service bill, in advance of o.ny other po.rt of the administration's progr~m.
SERIES OP MESSAGES
Before making further direct rocommcndo.t ions to the Assembly, which under the Constitution I am cho.rged with the responsibility of mo.king from time to tim0 during the session, I want to acquo.int the Assembly in detail with the various depnrtmonto.l setups, services and exponsos in the Stnte government; the different funds collected by tho State government; and tho purposes to which they o.re devoted. In other words, before sug0 esting further legislation, I want o. complete meeting of minds with the Assembly on every detail of the State government, its functions and expenses.
I cannot cover these details in a single message without extending it too long. I am, therefore, going to ~sk your indulgence to come befo:i:'e you with another messo.ge, in which I will complete the nnnlysis of these fund:1.mento.l fo.cts o.nd figures. After I hnve done this, I wo.nt to bring you n message analyzing the budgetary position of the Sto.te gove1nment and its relo.tionship to the governmental $ervices we o.re striving to render; then mrke recommend'.J.tions of legislo.tion necessnry to do those things essential to tlle progress and p~osperity of our people. If you will benr in mind th~t this message today is not to be treo.tGd separately, but is to be treated o.s one of n series of messngcs, loo.ding up to ri.nd including my recommondc1.tions, o.nd thnt each subsequent m,, ss:-igo up to o.nd including these recommend::1tions nre to be treated o.s o. pf1.rt of the whole pro sento.tion, thore should be littlo difficulty in o. fino.l o.nd full meet" ing of our minds both on the problems and their solution. I am preparing these messages in such manner as to come before you with very little delay between them in ord0r that you may have the whole within the next few days. I am also having these messages printed for you so you may refer to any portion of them you desire from time to time.
Meanwhile, there is ample legislation in 1-'!hich you are interested on your ovm account, not strictly administrative measures, and the matter of the merit or civil service system, r11 hich I have recommended, sufficient to engage your attention until the completion of these messages, including definite recommendations.
THE BUDGET
The gross State budget of Georgia, under the present appropriation bill, is $47,968,256.90. This is the gross amount of money the State government would disburse if the present app:!'.'opriat ions are paid in full. HO\'.Jev,~r, be it remembered that ':re have not, up until this time, dorived sufficient revenues to pay the present appropriations in full. But, whon and if paid in full, this figure of $47,968,256.90 is tho gross disbursement of State funds. Of course, we clear through our Sta to Tronsury cqrtain allocated federal funds, which are not included in the $47,968,256.90. This sum is gross State funds.
Georgia has a population of approximately three and one-quarter millions people. We aro tho largest State Enst of the Mississippi river, vrith an area of 59,265 square miles. I want to point out a compa:::1 ison of our present gross State; budget with our sister states
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bordering Georgia, that you may soo for yourself thnt in proportion to populntionj and in proportion to nreaJ evon with tho expanded govornmental seY-vices of this cdministrntion, Georgia is still fal" behind our sister states, J.n the amount of money spent for essential state govornmontal services~ I want to further point out that, reg2..rdloss of populettion and regardless of aroa, G0orgin Viill be spending actually loss money for those governmental services than oui- bordering stnto:::i when those appropriations o.ro paid in full.
The State of Florida, with a population of approximately half that of Georgia, and vvith less area~ h'.JS a gross state budget of $62,463,600000. F:i.orida spends approximately fifteen million dollars more for thnse governmental services to her people than Georgia1s present state budget, when paid in full.
Alabama; with approximately a half million less population and with considerably less a~ea, has a gross state disbursement of ~~517, 239 r 495 o 45, or approximately ten million dollars larger budget for these g0vernmental services than has Georgia, when our State budget 1s paid in full.
North Carolino.t with a population about the so.me and an area much less, ho.s a State budget of $74,969,901000, or more than twenty-seven million dollo.rs greG.tcr tho.n Georgin 1 s present State budget, when paid in full.
Tennessee with about a half million less population, and a much sm:1ller area, has a gross Sto.te budget of ~,,53,238,164.00, or approximately six million dollars grontar than our Sta.ta budget when po.id in full. And speaking of economy;
We o.re making our money go fartber in Georgi-:-,, than in o.ny State in tho nation... The oyos of tho whole country '.l.re toC::o.y focused on Georgia because of tho rapid nnd progroEsivo strides we ho.vo m:1.de in the p~.st two yoo.rs. They r:11 mrcrv0l o. t the mo.nncr in which rm o.ro going forw::i.rd with vihat funds r1u a.pproprio.to in comparison with who.t they cpproprio.to.
South C'.lrolina, vrith o.pproximo.toly one-half the populntion o.nd approximately one-half tho area, ho.s a Stato budcot of ~~47 ,9'74,241.66, nearly six thouso.nd doll:1.rs more for those services than our Sto. te budget prov id es when prdd in full.
This conclusively shovrn tho.t, even :lith tho exp~nded program of this '.ldminist10.tion, our sister adjoining statas of loss population nnd lnss o.ron a.re still in ndvnnco of our oi:m State in these services furnished our pooplo. It shows tho.tour present State program is very ronsonnblo and eonsorvativo indeed. It is asinine for political propa~andists, in ordJr to further their selfish ambi~tions, to strive to confuso and. misleCJ.d our people into bolioving the program vre nro undurtaking is oithor o::;:tro.v:::.gant or extreme. It is a tribute to the intclligcmco and p:-.triotism of our people, thc.t, regnrdL.,ss of th'-'so d,,,m~'.gogic efforts, they ctro sto.nding stondf'J.st to accomplish this progrnm for their bunofit which nt least mo::i..suros toward tho benefits accorded tho pooplo of our sister States.
Wo all knorr thCJ.t rrhon r.ro d,:my our own pooplo such fundamental govurnmontal sorvicos, cs hor-.1 th, oducc,ticm, no.turo.l resources, conservation, and socinl security, in comparison with that furnished their pooplo by our sister Stntos, wo civc them n tremendous 2dv2nta.go over us in h:.ppin,;ss, in p:ro0 ross, ::md in prosperity. It costs us a hundred, - yos, Cl thouso.ndfold - in tho income o..nd O'lrning power of our people, in compt1.rison wi-'::;h thu rcvonuo nocussary to put us on a parity with these sister states in these services.
While, in our pre-legislative conferences, and in my inaugural address, I have analyzed in ceneralities the state budget, I want now to analyze it in accurate detail. Our $47,968,256.90 state budget is divided into t;,ro funds;
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Tbe allocated fund of $26,955,456.90.; and
The unallocated, or general, fund of $21,012,soo.oo. In my message this morning, I want to take up the nllocnted fund in accurate detail, both as relates to the State government and the local governments, and give you a complete analysis of it. Then in my next message I want similarly to analyze the general fund.
Accurately, of the $47,968,256.90 that constitutes our present state budget, when pnid in full, the o.llocated fund totals ~26,955,456~90. While the general public hJ.s come to look upon this ~26,955,456.90 as an expense of the state government, in point of fact, $14,960,452,31 of these allocated funds going direct benefits to the subdivisions of the State, and are not spent for state purposes, but o.re utilized for locnl purposes. The state government o.ctunlly spends for state governmental services only $11,995,004.59 of this allocated fund carried in the state budget; and of this amount $781,302.00 is sent direct to the Ordinaries in fixed amounts for Confederate pensions: In totaling the nox state budget of many of tho states, '.78 find they do not c,1rry the money sent direct to the subdivisions, but only those net sums actually expended by the state for state services. Therefore, in reckoning with many of the state budgets, thore would be carried in their net state budget not the $26,955,456.90 we carry, but tho part thereof used strictly for state governmental services which is $11,995,004.59.
I doubt if the average citizen of the Stnte realizes the extent to which the funds collected by tho StD.te nro actually expended not by the State, but by the local govorn,~ents.
Here are the items of our o.lloco.tod fund that go directly to the benefit of the local subdivisions:
(n) $3,148,704.70 of the stnto allocated fund goos in direct lump-sum payments to tho counties to aid in the mnintonnnce of their secondary roo.ds; this is derived from one cent por gallon gasoline tnx, and is distributed on the basis of the state-aid road mileage in each county.
(b) $2,678,193.31 of the gasoline tax money is sent in lump sums to the counties to repay the county road bonds.
(c) $3,075,536.44 is paid directly in lump sums to the various counties of the State on state highway contracts with the counties ta nssist them in maintaining their prisoners.
Thus, it must be borne in mind that of the $26,955,456u90 allocated fund carried in the state budget, actually $8,902,434.45 of this sum is not spent by the Stnte for state services at all, but is sent in direct lump-sum payments bnck to the counties to help meet the fiscal obligations of the county governments.
(d) Of this state allocated fund ~~3,475,360.82 derived from the one cent per gallon gasoline tax and the kerosene tax, is sent in lump sums to the county and city school systems of the State as an equalization school fund.
( e) $1~378,416.00 of this allocated fund, derived from the stnbilizo.tion fund, is sent in lu::ip-swn pCJ.yments to the county and city schools to help them pny their teachers' so.Jaries.
(f) $1,204,241.04 of this allocated fund, derived from the b8cff t::ix, (~l,041,861.41),2nd from the wine to.x, (~~162,379.63), is fent back to the county and city school systems in sal'ool books.
Th,_1.s, the local schools receive $6,058,017.86 of the St::.tte all0co.tec: fund ta assist them in financing '.lnd furnishing their loco.l school services.
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Adding the ~j8,902,434.45 sent to assist tho counties in financing their county govornmontctl services and tho $6,058,017.86 sent the county and city school systems to assist them in furnishing their local school services, there is a total of $14,960,452.31 of the allocated fund in the state budget that is not spent by the State for state governmental services, but is used by the +ocral subdivisions in furnishing their governmental services. This leaves an aforesaid $11,995,004.59 of the $26,955,456.90 of the allocated fund in the state budget that is expended by the State government in furnishing state governmental services. Therefore, properly speaking, the State government should be charged, insofar as the allocated fund carried in the budget is concerned, with only $11,995,004.59, because the remainder goes in the manner I have mentioned, to be used by tho local subdivisions in furnishing their local governmental services.
Of this $11,995,004.59, actually spent by the State government, of this allocated fund, $7,755,650.89 is spent by the Highway Department. An analysis of this figure actually spent by the Highway Department is as follows:
After deducting the gasoline tax mon0y that goes to the counties on state highway contracts to support their prisoners, the gasoline money that goos to the counties on the basis of their state highr,ay mileago to help them maintain their secondary ro,.1d system, the gasoline tax that goes to repay tho county road bonds, and the gasoline tax that goes to the school equalization f~nd, the Highway Department has loft from tho gasoline tax t6,029,390.73. In addition to that, the Highway Department received $26,081.73 from the motor carri0rs mileage tux; $2,304.79 from the rolling store: tax; ~>1,347 ,902.37 from tho motor vehicle liconso tax; ~;;331,017.96 from tho bus and truck maintenance tax; and $18,953.31 from the motor carriers roos collocted by tho Public Service Commission; making an additional aggregate of $1,726,260.16 from those sources; added to tho $6,029,390.73, giv,,,s the Highway Department this total of $7,755,650.89.
(It must bo remembered that during this fiscal year tho Highway Dopo.rtment will not receive tho $26,081.73 from tho motor carriers mileage tax, becnuse tho.t has boon ropoo.lod; nor will it receive the $331,017.96 from tho bus and truck maintenance tax, because that has likewise boon repealed. In oth0r words, those two ropenlod itoms, totaling $357,099.69, will be deducted from tho Highway Department funds, as woll as tho total allocated funds, this fiscal yoar. HowovGr, I am reckoning in this message with tho alloc::i.tod funds on tho basis of tho normal fiscal yonr.)
Hore is what the Highvmy Department docs with its ~s7,755,650.89 of tho allocat.:id moneys: It spends ~2,138,968.54 in maintaining tho approximate 11,000 miles of ronds in the Stnt0 Highway system, Tho o.dministrative oxponso of tho Department is $683,479.46; and tho Planning Survey expense is ~~244 ,306 .09. Tho so thr _,o it oms of maintenance, administrative expense and Planning Survey expense total $3,066,754.09. These items, subtracted from the $7,755,650.89, leave the Highvmy Department $4,688,896.82 with which it mntches the federal aid alloted to the State each year, constructs state aid roads not in the federal aid system; and constructs post roads.
(It may be well here to take cognizance that much publicity ho.s been given to the fact tho.t the Highvvay Department last year constructed $21,153,831.56 worth of roids. The average citizen might take this to mean that this was u normal year's construction for the Highway Department. The fc_c t is tho. t in that figure of ~!:~2:._)1."'i3:,831.56 is included the $3,075,536.44 which the Highway Depnr::;ment pa.id to the counties on construction contracts to support their prisoners, which, when deducted, left a total
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construction progro.m by the Department of $18,078,295.12, wh~ch, within itself, is a tremendously abnormal expenditure for the Highway D8pnrtment in any one yeo.r. This was mo.de possible by the fo.ct thn.t there wn.s brought forwo.rd in the Department lnst yeo.r
$4,432,644,81 of sto.te funds. The Department received $1,374,408.00 from the sale of Western and Atlantic Rn.ilron.d rental certificates
it held, It received 100% federal funds of nn unexpended balance due the State on a federal emergency appropriation for roads a
few years ago under the No.tional Recovery Highway Program and the WPA, which did not require matching, $4,922,908.20. Those funds were abnormal and will not be avo.il.o.ble again in the normal functioning of the Department. Added to them was the normal st('lte and federal funds for construction of $7,290,413.19, which made possible the huge construction program lo.st yeo.r. I detail this explanation in order that there may be reconciled the abnormal program of last year, made possible in this manner, that is not possible in the normal functioning of the Department,)

As I hn.ve detailed, of the $11,995,004,59 of the a.lloco.ted fund in 'the state budget a~tu8.lly spent by the Stnte for sto.te
governmental services, $7,755,650.89 is spent by the State Highway Department in the manner in which I ho.ve outlined. This leaves $4,239,353.76 of the nlloco.ted fund spent by the State, which is divided into two categories:

First: The funds set aside for various purposes from the revenue of the State; and

Seeond: The funds that are collected by the agencies themselves, specifically for their use.

I will first take up the funds set aside
from t,he revenue of the State, which amounts to
$2,724,.395.59:

1.

The largest item in this group is $781,302,00,

derived from cigar and cigarette tax money, set aside for

the payment of Confederate pensions. While this item is

appropriated to the Welf~re Department, and may be

construed as a quasi-allocation, for the purpose of

detailed accuracy, I have included it as strictly an

allocated item and carry it in that manner for the

purpose of analyzing the State budget to you in accurate

detail. I will reconcile its being carried as an

allocation by an adjustment in the Welfare Department

regular appropriation when I come to discussing that

item with you in my next message. I might also add

that in this fiscal year, instead of this item of

Confederate pensions being $781,302.00 it will be

approximately a million dollars because of the full

fiscal year payment of the additional widows, authorized

by legislative act to receive pensions. This act added

1261 widows to the payroll.

2,

The next largest item in this category is the

$640,000.00 set aside annually for payment of one half

of the $200,000.00 state bonds due each year, and t4e

redemption of the $540,000.00 Western and Atlantic

Railroad rentals, which w~re discounted and fall due

$45,000.00 monthly. 1rhe funds thus set aside are derived

from the bond levy on property amounting to $100,000,00

annually, and the $540,000,00 annual rerit for the

Western and Atlantic Railroad. This item m,~y likewise

be termed a quasi-allocation. But we are treating it as

in the nllocat ed fund.

3.

Another item in this category is the $420,245.95

set aside for operations of what is now the Department

of Revenue to bear the administrative expense of the

collection of taxes by the State. We are striving to

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keep these collection expenses within the intended limitation of the Assembly. How well we have succeeded, is illustrated by the follo.'ling break..down of funds derived by percentages from several sources as authorized by law:

Ohain Store Tax
Cigar and Cigarette Tax Kerosene Tax Malt Beverage Tax Motor Carriers Mileage Tax Motor Fuel Tax Rolling Store Tax Wine Tax Income Tax
Total

$10,612.50

$121,700.00

$1,091.75

$31,255.87

~~1,422.82

$93,118.59

$23.28

$4,860.06

$156 z161,.08

-

"'1420,245.95

It is to be noticed in the above, that principally the funds thus retained for operations of the Revenue Depart-
ment are from the funds set aside for special purposes; the general fund of the State receiving little or no
benefit from the funds thus collected, Therefore, rightfully as well as legally these funds should bear their part of the collection expense.

4.

The fourth item in this category is the stabiliza

tion fund derived from the 10% deduction of State revenue

receipts from January 1, 1938, through December 31, which

netted $518,940.00 after taking into consideration the

$1,378,416.00 paid to the local schools for their teachers,

as set out previously in this message. $311,896.73 of the

funds thus allocated was used to replace, in a small part,

the reduction enforced on geneia.l fund appropriations,

becnuse of the deficiency in available funds, as follows:

$108,?00.00 was paid to the Department of He~lth and

Tubercular Sanatorium; $42,720.00 was paid to the Board

of Penal Administro.tion; ~61,200.00 wo.s paid to the Public

Welfare Department; $48,000.00 was paid to the University

system to apply on their appropriation for buildings and

equipment; and $51,276.73 was po.id in small amounts on the

appropriation of several other in the State Auditor's report.

State A ba

agencies lance of

~1 2a0s7,d04e3ta.2i7led

in the stabilization fund remained on hand June 30, 1938.

5,

Included in this cntegory of the allocated funds is

$141,939.88 dc,rived from the oho.in store to.x, and set

aside to the account of the State eleemosynary institutions

to bear in po.rt the cost of the much-needed repairs and

equipment at the various institutions, such as the

Milledgeville State Hospital, the School for the Mental

Defectives at Gracewood, et cetera.

6.

Two other items in this category for the past

fiscal year are $20,000.00 set nsid0 from the contractors'

board fees for the benefit of the Hcrty Foundation for

research in tho field of manufacturing paper from slash

pino, and $200,000.00 set aside from the fuel oil tax

allocated to the State Highway Department for the State

Board of Penal Administration, to be used to purchase,

build or buy the necessary buildings and equipment at the

new Tattnall Prison. The latter item will be entirely

elimi.nated from future allocations. The former item will

be ellminated in the future unless reallocated by this

Assembly for that purpose.

7.

The last small items making up the remainder of

this $2,724,395~59 are: The land title registration fund

in the StatA T~easury of $108.18, and the national forest

fund of $1,859.,58, which is transmitted through the State

by the Federal Government for distribution to the civil

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division in which the national parks are located., These items really should not be carried in our stute s.11.ocated funds because they are Federo.l Funds. But we flnd. them charged that way.

(I have not included in this summary $292,451.80, which clears through the Treasury as a grant made by the federal government for the maintenance and support of the Bi;;_reo.u
of Unemployment Compensation, in the Department of Labor, because the State does not furnish this fund and does not have any jurisdiction over it, other than to see that it reaches the proper agency.)

Summarizing to this point: Remembering that the total allocated funds in the state budget amount to $26,955,456.90; and remembering that of this amount ~~14,960,452.31 goes directly to the subdivisions of the State for local governmental services,
leaving only $11,995,004.59 of the allocated fund in the state
budget that is spent for state governmental services; and remembering of this $11,995,004.59 spent by the State government ~7,755, 650.89 is spent by the Highway Department; and that $2,724,395.59 is accounted for in the foregoing enumerated items; we have thus accounted for $25,440,498.79 of the total allocations of $26,955,456.90; this leaves $1,514,958.11 of the total allocated fund to be accounted for. This balance constitutes the item aforementioned of funds collected by agencies themselves for their own use. It will thus be noted that the total amount of funds in the State budget collected by Boards and Bureaus for their own use is ~~1,514,958.11, or 5% of the total allocated fund in the Stcte budget.

$1,395,315.16 of the $1,514,958.11, or 4.6% of these funds collected by agencies specifically for their own operations, is for the operations of the Agricultural Department, Banking Department,
Fire Me.rsho.11 Division of the Comptroller Genernl' s office, State
Industr'ial Board, Public Safety Dep'lrtment, Public Service Commission, Wildlife Division of the Natu~al Resources Department and the Securities, Building and Loan and Corporations Divisions of the Secretary of State's office; that $45,000.00 is allocated to the Radio Commission for developing Radio Station WGST; leaving only $119,642.95, or less than .4 of 1% of the total allocated funds in the State budget as being set aside for the operations of the 21 various remaining boards and commissions. The $50,000.00 allocated to the Radio Commission came not from any tax source, but from forfeiture of a contractual deposit posted by a would be purch2.s0r of certain lease rights on State property, who failed to finally secure the lease - $5,000.00 of the $50,000.00 thus allocated went into the stabilization fund, and the remaining $45,000.00 remains with the Commission to develop the State's Radio Station WGST. There will be no future allocation of this amount to this Commission. I will give a report on the progress of this Commission in a later
message.

To complete the analysis of the uses of the allocated funds collected by agencies specifically for their own operations, I will discuss first the $1,395,315.16 allocated to the several departments
of State from the funds collected by them:

1.

The main dep3rtment in this category from a monetary

standpoint is the Department of Public Safety, which began

its operations in July, 1937. This department remitted to

the Treasury within the year $590,000.00 collected by it

from drivers licenses. From this $590,000.00 it refunded

the $100,000.00 advance mnde from the general fund, as

directed by the net establishing the Department; from

the $59 general

0,000.00
fund, in

it contribu accordance

ted wi

$
th

1t6h, 9e 230%. 0 0p r otvoi

the sion

State to

~rovide for the overhead cost of government; and from the

~590,000.00 it contributed $26,000.00 to the State

stabilization fund. After reckoning with these deductions,

$447,080.00 was set aside for use in maintnining the State

Highway Patrol and other services of the Depo.rtment of

Public Safety.

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2.

The Department of Agriculture from the fertilizer,

feed, egg and market feus contributed $15,464.37 to the

State g0nernl fund, in accordance with the 3% provision

of the appropI'iat ion bill; and $1,011.02 to the stabilization

fund. After these deductions, the Department had set aside

for its own use $399,254.35.

_3.

The Wildlife Divis ion of the Department of Natural

~esources had allocated to it a total of $176,827.17 during

the year. $23,264.44 was derived from the contractors

board fees, as directed by the gene11 al assembly; and f;l53,562.

73 was from hunting and fishing licenses after contributing

$4,594.53 to the State general fund and $154.85 to the

stabilization fund.

4.

The Public Service Commission had $143,513,90 set

aside for its ra e in performing its duties pertaining to

the regulation of the public utility companies and the motor

carriers. One of the items that make up the $143,513.90

is the $60,367.81 set aside from the assessment on public

utility companies, after contributing $1,867.03 to the

State general fund and after contributing $6,137.27 to the

stabilization fund. The other item set aside for the

Public Service Commission is the $83,146.09 from the motor

carriers fees, after contributing ~~3,768.67 to the State

general fund t:!-nd ~~6,214.43 to the stabilization fund, and

transferring ~SlS,953.31 to the credit of the Highway Depa1'tment.

5.

The State Industrial Board is required, by law,

t'o raise the funds for its operations by assessments on

the industrial insurance companies writing compensation

insurance, and business concerns that are self-insurers.

There was raised from this source $110,969.35, which was

paid into the Treasury and set up as allocated to the

Industrial Board.

6.

$45,236.47 was set up as an allocation for the

Banking Department, the funds being derived from Bank

Examination fees and assessments on banks in liquidation.

This department contributed ~l,086.86 toward the general

government cost under the 3% provision and (~2,135.89 to the

stabilization fund.

7.

The halance of $72,433.92 of the $1,395,315,16

allocated funds set aside to the departments from fees

collected by them is composed of $11,974.41 for the Fire

Marshalls Division of the Comptroller General's office;

$12,850.22 for the Securities Division; C,801,00 for the

Building and Loan Division; and $1,808.29 for the

Corporations Division; all in the office of the Secretary

of State, a.nd the Radio Commission ~~45,00o.oo.

$119,6

This 42,95,

brings us or less

down than

to ,4

oaf c1c%o uonft i nt hge

f

or all but 26,955,456,

90

of the allocated fund in the State budget, This $119,642,95,

expended by 21 Boards and Commissions, in tnbulated detail

is as follows:

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BOARDS AND con,;r S3IONS - (;119, 642. 95 or 4/10 of 1% of the total allocated funds.

NU:111BER

CONTRIBU'I1ION

ASSESS NET

STA'rzs

TO STAT};; GENERAL MEitr FOR FOH

WI'l1 H

AND STABILIZATION JOINT

OVi~RA-

SIMILIAR FUND

SECTY TIONS

COTt'.ISSIONS

01'1 FICE - - - -

Accountant's Board

48

Architect's Board

39

Athletic Commission

35

Barber Board

46

Chiropodist Board

46

Chiropractor Board

42

Dentist's Board

48

Embalmer's Boo.rd

48

Engineer st Bof'.rd

42

Librarian's Boa.rd

21

Medical Board

48

Milk Control Board

24

Naval Stores Inspector

2

Nurse's Board

48

Optometrist Board

48

Osteopathic Board

48

Pharmacist's Board

48

Photographer's Board

5

Re~l Estate Bo~rd

33

Veterinario.ns Board

48

Joint Secretary's Office

$

265.49 (;1 ,008 ~ 50 ~~1,901001

77.23

296.63 571~14

383.47

7,666~13

2,692.71 9,830.38 18,728.91

3.54

29.66

65,80

55.70

22?.40 441,90

167.39

422.68 744_03

472.30 1,483.09 2,786,61

571~95 2,091.15 3,988.40

19.68

21.70 110.62

329.64 1,080.18 2,012,18

1,225.16

39,613.02

75.96

1,153,18

837,70 2,689.33 5 ,02:L 92

104,14

301.56 556.30

10.85

61.79 127.36

409.12 1,263,09 2,345.89

60.21

412.79

842,00

1,275.00 3,430.87 6,204.13

8.67

39.55

79.07

21,693.05

TOTALS

$9,045.91 ~'J 24,693.350"" 119,642. 95

There is one additional Board, the Contractor's Licensing BoQrd tho.tis not included in the above becnus~ of the $43,264.44 fees remitted to the Tro~sury being nllocuted ~p20,000.00 to the H~r!y.Foundo.tion and $23~264,44 being allocated to the Wildlife Division of the No.turnl hesourccs Department, o.s heretofore set out.
This Bo'.1rd W3.S created for tr1e purpose of regulo.ting the practice of general roo.d Qnd street contrncting in Georgia, with provisions for o.pplicettions, examination nnd the issuing of cert~_fi-Jates of license o.nd providing for o. pennlty for violo.tion of the conditions o.tto.ched thereto, The law nuthorizes the Boo.rd to license contractors at $500.00 each, licenses to expire December 31, 1937, and for a renewal license payable $100.00 annually to be collected in the future.
The act creating this agency and the general appropriation act were approved on the same date, March 30, 1937. Neither act provided o.n appropriation for the cost of operating the BoRrd nor hns 2.ny subsequent act mRde such provision, although the act did provide that the appropriation to be mad0 by the General Assembly shal~- be payable from funds eollected under this act. To date this Boo.rd has operated on feus ret~ined from the collections in the total sum of ~15,159.54 for the fiscal years 1937 and 1938, The Board had a balance on hand June 30, 1938, of $7,176.02.
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MILK CONTROL BOARD
This Board was created by an o.ct of the Genc:i:nl Assembly during its regular session in 1937, to regulate the production, distribution and sale of milk. Section 24 of the act provides that it shall a.pply during the "emergency period", referring to the period between the time the act went into effect and August 15, 1941. However, the act operates only after a favorable referendum in each milk shed.
As authorized by the act creating it, the Board has desienated sixteen milk sheds or marketing arens within the State and in these areas the Board has issued licenses of four types, viz: Milk store, producer, distributor, and producer-distributor, Milk store licenses issued by the Boo.rd for an annual pel"'iod, nre fixed at $2.50, while producers, distributors and producer-distributors within the bounds of the milk sheds are nssessed a monthly fee mf two cents per hundred pounds of milk bundled during the month.
SUPERVISING INSPECTOR OF NAVAL STORES
The supervising inspector of no.val stores has general supervision and direction of all inspectors of naval stores appointed by the corporate authority court or other corporation. He has also the duty of supervision of all naval stores, plants, yards and warehouses and to see that no adulteration of naval stores is committed.
The supervising inspector of naval stores receives as his compens~tion one-fourth cent for each barrel of rosin or spirits of turpentine inspected; foe to be paid equnlly by tho buyor and seller of naval stores.

:STATE ATHLETIC COivJJIUSSION

By act of the General Assembly in the regular 1937 session, the establishment of the Stnte Athletic Commission was authorized with general powers, subject to the provisions of the act, to license, supervise and regulate boxing, sparring Qnd wrestling matches and exhibitions and the p8rticipants therein.

License fees and tax:

Promoters

$25.00 per yeo.r each

Referees Contestants

10.00 per yenr each
5.oo per yenr each

To.x - 10% of gross receipts from sale of tickets

or po.sses to the mQtches or exhibitions.

OTBER BOARDS NAMED

All the other Boards named are professional exo.mining boo.rds, similar to the Boo.rd of Bnr Examiners, the cost being po.id by the members of, or the applic~nts, for membership in,
the various professions.

It will be noted that these boards and commissions, including the contractor's board, contributed $52,310.35 to the general fund, the stabilization fund, and specially allocated funds. Both this contribution, and their expense of opcrc..tion, is derived from the groups requesting their creation and maintenance.

This completes the analysis of the uses and purposes of
$26,955,456.90 allocated funds which pass through the State Treasury as special earmarked funds for specinl purposes and are not available to the general fund of the State to apply in payment of the $21,012,800.00 fixed appropriations which provide

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for the maintenance and support of the seven months school progrnm, the university system, the state eleemos:rn::i.ry institutions, the health services, the prison services, the legislntive and judical branches of our government nnd the several other Constitutional and statutory departments of State. In my next message I will analyze in detail this $21,012,soo.oo of the general fund, showing from what sources it comes, to wh:1t sc~rvices it is appropriated, and by whom it is spent.
Finally, in concluding this analysis of the allocated fund in our State Budget, let it be remembered thnt the toto.l gross state budget, when the appropriations are paid in full, is $47,968,256.90 - that the larger p~rt of this amount is allocated. The total allocated fund is $26,955,456.90. That nearly fifteen million dollars of this amount - $14,960,452.31 - is not spent by the State at all, but is simply collected by the State and sent to the county commissioners and county and city boards of education for use by them. Nearly nine million dollars - $8,902,434.45 - of this nearly fifteen million dollars is sent to the County Commissioners, and is used by them in addition to the local tax they co_llect. If we did not collect this approximately nine million dollars by the State and send it to them, they would have to raise it by additional local taxes.
That of the nearly fifteen million dollars allocated funds shown in the state budget, but used by ,the subdivisions, . the local school boards receive $6,058,017.86. If the State did not collect this money and send it to them, the local school officials would have to levy additional local taxes on the local people to raise it.
The enemies of this program hnve been telling the people that Ed Rivers is sitting up here in Atlanta, spendin.:-,i: all this money, when they know that most of the money v,e collect is sent back to the ,County Commissioners and County and City School Boards to spend. They know if we did not collect it and send it back there, that these Commissione1"s and school officia.ls would have to collect it out of local ad valorem taxes. Let me further point out that when we are talking of economy that, since most of the money the state collects is sept back to the counties and local schools to spend, economy investigations and economy measures must extend to the counties and local schools that spend a major portion of the money collected by the State.
Let it also be remembered that while the balance of the allocated fund not sent to the counties and local schools is approximately twelve millioh dollars - $11,995,004.59 - that nearly a million dollars of this balance is sent in lump sums to the Ordinaries to pay Confederate pensions it $30.00 per month each, fixed by law, and that there is no discretion involved in its payment to these local pensioners, either by the Ordinaries or by the State.
Let it also be remembered that of the approximately eleven million dollars of allocated money left to be spent by the State that more than seven and three-fourths millions of it - $7,755, 650 .89 - is spent by the High"m:i.y Department in maintaining and constructing highways in every county in the State. And, if the Highway Dep~rtment did not construct and maintain these highways in the counties, they would have to either go unmaintained and unconstructed, or be maintuined and constructed by ad valorem taxes levied on the local people in each County by the County Commissioners or Ordinaries of the counties. And that of this seven nnd three-fourths million dollars of allocated money spent by the Highway Department, most of it is spent on competitive bidding; the administrative expense being proportionately very small.
Let it be further remembered that in the balance of the allocated funds spent by the State are such fixed items as payment on the public debt and discounted W. & A. rentals, and
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the Highway Patrolmen's salaries, fixed by law, which involves no discretion,.
That the twenty or more boards and commissions usually heralded as evidence of extrnvs.gance, and waste, spend less than one hundred twenty thousand dollars - $119,642.95 - of the $26,955,456.90 - or less than four tenths of one percent of it - and that they get the money they spend from the groups who want them maintained.
That they furthermore contribute into the general 1 the stabilization and specially allocated funds for other purposes $52,310.35, which would have to be raised from other sources if they did not pay it. Thnt, if you abolished all of them, you would lessen the state budget less than one hundred twenty thousand dollars, and that would only come off of these special groups.
Please bear these facts and figures in mind, and carry them forward in your thinking into my next message. At that time we will complete the analysis.
Meanwhile, may God bless you in your efforts for Georgia and Georgians.
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