MONTGOMERY, Ala., Jan. 10 - Following is the prepared text of Gov. Bob Riley's (R) 2006 state of the state address:

Lieutenant Governor Baxley, Speaker Hammett, Senator Barron, Representative Newton, Members of the Legislature and my fellow Alabamians:

When I came before you three years ago, I promised that if we worked together, if we put the people of Alabama first, we could reform government, revive our economy and direct more money into our classrooms. Tonight, I'm honored to report to you that's exactly what we've accomplished. And I want to thank you and the people of Alabama for making the State of our State the strongest it has ever been.

When I first stood in this chamber, Alabama faced a crisis of historic proportions. There was little accountability in state government. In the three years before we took office - 47,000 Alabama jobs had vanished. We inherited a record budget deficit of $675 million and our schools and colleges were suffering painful funding cuts. Taxpayers were outraged at the level of pork barrel spending - and rightfully so.

Now, just three years later, I'm proud to report that Alabama is not just better off - it is better.

We've brought fundamental change to Montgomery, applied our conservative principles and our traditional values, and have given the people a new kind of government. Tonight, our state government is the most efficient, the most open and the most accountable it has ever been.

We created the state's first Ethics Code for the Cabinet and the Governor's staff.

We reduced the number of state employees, the number of state vehicles and the total salary cost of state government.

We put in measures to fight methamphetamines - Alabama's number one illegal drug threat. Law enforcement officers now tell us that there's been a dramatic reduction in meth labs because of our new anti-meth law.

And to sexual predators, we've served notice: We will not let you prey on our children. With our landmark child protection law, I'm proud to say Alabama has one of the toughest laws in America against sexual predators. Thank you for standing up for our children.

We increased funding to help Alabama seniors get free prescription drugs. More citizens than ever can get help buying the medicine they need. Now they won't have to choose between eating and taking their prescriptions.

We opened the books on state spending with SMART Governing. Now Alabamians can go to the Internet and see where every agency, every department, every board and commission is spending their tax dollars.

One place where tax dollars aren't being spent is on pass-through pork - because we eliminated it - and saved taxpayers 40 million dollars.

We worked together to cut out a half-billion dollars in line-item spending from the budget. And we also passed the first-ever reforms to health insurance programs, reforms that will save taxpayers in Alabama 300 million dollars.

These spending cuts weren't easy, but they were necessary at the time to overcome the record deficit we inherited. Well, tonight, that record deficit from three years ago stands at an all-time record surplus.

This record surplus exists because we fought for fiscal discipline and because our workers, our industries and our economic growth strategy have succeeded in putting Alabama's economy on the right track.

One newspaper actually called Alabama's economic turn-around a "near-miracle."

Our unemployment rate is the lowest in recorded history.

During the past three years, the number of Alabamians with jobs has grown by more than 100,000 and more Alabamians than ever before have jobs. We've successfully recruited 1,200 new and expanding industries which are creating 50,000 new jobs. All 67 counties have a lower unemployment rate, and in our rural counties unemployment rates have been cut almost in half.

Our economic recovery is so strong that no part of Alabama is being left behind.

We've widened the reach of economic growth beyond our Interstates, and we've broadened our economic base.

Today there's more than automobiles driving Alabama's economy. Our state is rated as having the most industrial diversity of any state in the nation. We are number one in the country. From medical research, to aircraft manufacturers, to biotech - we've broken new ground and given Alabama a firm foundation in the high-tech economy of the 21st century. The horizon of our economic future is broader and brighter than it has ever been.

And ladies and gentlemen, this is only the beginning. We're not done yet. Between 5,000 to 10,000 new and highly skilled jobs are already on their way to Alabama. They're coming because we fought for Alabama's military bases when it came time for another round of base closings. We succeeded in reversing recommendations that would've sent more than 3,000 jobs out of our state. With no base closures - and with significant job gains, Alabama fared better than practically every other state in the country. And I want to thank our community leaders and our congressional delegation for working to keep our bases open for business.

Ladies and gentlemen, there's no doubt about it: Alabama is working. Tonight we have the most dynamic, the most competitive job-creating economy in the history of this state.

But, as I've said before, the most important economic development issue in this state is and always will be education. That's why improving education must remain our number one mission.

Today we are investing more in education than ever before. And we're putting the money where it belongs - in our classrooms. We've invested in new textbooks, in teacher training, in technology and programs that get results like the Alabama Reading Initiative.

We know now that students at schools with the Reading Initiative have higher reading scores and fewer discipline problems. In fact, the U.S. Secretary of Education came to Alabama and called our Reading Initiative one of the best education reforms in America.

And this year we will fulfill a commitment I made from this podium two years ago. For the first time, every child in every public classroom in kindergarten, first, second and third grades will have the best reading program in America.

We've also put record funding into Alabama's Math, Science and Technology Initiative. Like our reading program, AMSTI has proven its success in dramatically improving math and science scores.

After far too long, parents can now have the confidence of knowing that our education system is headed in the right direction because we made their children - not the special interests - the top priority.

You know, there's no greater legacy we can build than having an education system, a government, an economy and a state that is in better shape than how we found it. And during the past three years that is exactly what we have done.

But we must also remember: we didn't get here by accident. Alabama's success was not a matter of chance. It was a matter of choice.

Now, at the start of a new session and a new year, we must make the right choices and keep moving Alabama forward.

So let's begin by continuing to pass reforms that give our citizens greater confidence in their government. Tonight, I will ask you once again to pass reforms that will reduce the power of special interests.

Under our current system, lobbyists can spend up to $250 a day entertaining public officials and never have to report any of it. In a year's time, that adds up to more than $91,000. Now, when you consider lobbyists outnumber lawmakers four-to-one, you realize just how outrageous the current system is. The proposal I'm sending to you requires full disclosure of how much lobbyists spend. There is no justifiable way to defend the status quo - so join me in changing it.

No reform will do more to restore our citizens' faith in government than term limits. When I served in Congress, I promised the people I would serve no more than three terms and I kept that promise. Elected public service should be temporary, not a career that creates lifetime politicians. So as I've done before, I'm sending to you again a Constitutional Amendment for legislative term limits. By enacting term limits, we will return the power of government back to the people - which is exactly where it belongs.

Last year, after a misguided ruling from the United States Supreme Court, we made Alabama the first state in the nation to enact stronger property protections. But we can and we should do more. So I call upon you and the people of Alabama to enshrine these protections in our Alabama Constitution.

While we must seize this moment to continue reforming government, we must also use this time of unprecedented growth to increase our commitment to education.

With the budget I'm proposing, we will increase spending on education by $1 billion. That is the largest investment ever made in our children's future.

We will fully fund all the learning needs requested by our K through 12 system, our community colleges and our four-year institutions of higher learning. This budget represents a historic advance in school funding. It means record investments going directly into our classrooms - bringing new hope to our children, to their parents, the taxpayers and our teachers.

None of the progress we've made in education would be possible without our teachers. But they deserve more than our gratitude and our respect. They deserve a pay raise. So I'm proposing a pay raise of up to five percent for our teachers.

With my education budget, we will also add five additional days to our school calendar. Alabama is one of only three states that does not have a school calendar of at least 180 days. Yet our students and our teachers are held to the same standards as those in other states. To expect them to accomplish the same amount of work in fewer days just doesn't make sense and it's not fair to our students and our teachers.

But if our students are forced to go to schools that are literally falling apart, it won't matter how many days they spend there. Very rare is the day I don't receive a letter from a school superintendent, a teacher or a parent describing needed repairs at their schools. I've traveled all across the state and seen with my own eyes the crumbling conditions of some of our schools and the need to build new ones to meet rising enrollment. Damage that our schools suffered from the recent hurricanes only added to the problem. So I'm proposing we use $500 million of our surplus to meet our building needs. But, we must do it in a fiscally responsible way - in a way that will not hurt education in the future.

During past periods of revenue growth, our state government often made the mistake of committing one-time education revenue to reoccurring expenses. Then later, when revenue growth slowed, the money ran out but the expenses remained. When that happens we're forced into proration and our children suffer.

We must not repeat the mistakes of the past. By focusing this investment on one-time expenses rather than on-going costs we'll continue the progress we're making in education and we can do it without risking proration. I want to ask each of you to join me in this financially sound effort to make sure our students attend safe and modern schools where every student can reach their full potential.

The education budget I've just outlined for you is remarkable in its scope. Never before have we had a stronger education budget - a budget that better prepares our students for the future.

This historic investment in education is only possible because our resurgent economy has sparked extraordinary growth in revenues. Revenue grew almost 12 percent in the Education Trust Fund. That means we have the ability today to meet all education requests, also spend $500 million on school construction repairs, fully repay all money owed to the Rainy Day Fund and still have a surplus left over. That will provide us with an opportunity to help all Alabamians keep more of the money they earn. So, tonight, I'm proposing a historic tax reduction package for the people of Alabama. I want everybody who pays income taxes in this state to get a tax cut.

Under the plan I'm proposing, every taxpayer will receive a tax cut every year. Over the next five years, taxpayers will keep more than $200 million to meet the needs of their families. It's what our economy needs and, ladies and gentlemen, it is what our families deserve.

There are those who are eager to attack this plan. They'll say, "More money should be spent on education."

You know what? We are spending more on education than ever before. $1 billion more with record amounts going into our classrooms.

They'll say, "We should use it to fund other needs like Medicaid and state troopers.” But as all of you know, under our Constitution that is not possible. The education surplus can't be used for General Fund programs.

Others will claim the tax cuts won't go to the right people.

Let me say it again: under my plan every taxpayer in Alabama will get a tax cut.

If you approve my plan, we'll increase the tax deduction for dependents for the first time since 1935. We'll increase the personal tax exemption so all taxpayers will see meaningful tax relief year after year - including those on fixed incomes.

We'll also finally make our tax code fairer by increasing the threshold where income is taxed. When fully implemented, a family of four will pay no taxes on the first $15,000 of their income.

And there's one other part of my tax cut plan. As parents and grandparents buy school supplies, let's ease their tax burden. I ask you to approve a state sales tax holiday to help families with back-to-school expenses.

My enthusiasm for a fairer tax code is nothing new. It's something that I've said we needed to do for years - and it's something I fought very hard for. But this year, in this session - with my budget - we can and we should make it a reality.

If we don't do it now - when we have a record surplus - then when will we ever offer tax relief? You know, and I know, and the people know: if we don't cut their taxes, government will find a way to spend the money. Don't let that happen. Cut their taxes.

My budget also calls for a pay raise for our hard-working state employees and increased funding to meet some of the most pressing and long-neglected needs.

Our crime labs have a backlog that delays justice and helps criminals escape punishment. To reduce that backlog, the budget I'm sending to you increases funding for our Department of Forensic Sciences by 19 percent. Our Department of Public Safety is also budgeted for a 19 percent increase - enough to fulfill our commitment to fund 200 more State Troopers over two years.

Our State Troopers are dedicated public servants. Each and every day, they put their lives on the line for us, for our families and for our state. But what you may not know is that many State Troopers have also volunteered for additional duty. They're enforcing federal immigration law. Alabama is one of only three states that have specially trained State Troopers who can arrest illegal aliens. When our nation's borders are not secure, terrorists, drug dealers and other criminals find it easier to come to America - and to Alabama. But standing in their way are men and women like Corporal Susanna Capps and Trooper Anthony Birmingham, who are seated with my wife Patsy. Officers, thank you for your service. The people of Alabama are proud of you.

But no matter how much we invest in public safety, we will continue facing threats to our security as long as we ignore the challenges in our corrections system. These problems have built up for decades.

I will send to you proposals developed and supported by judges, prosecutors and victims advocates, and I ask you to join together in a bipartisan effort to make these common sense reforms a top priority of this session.

With your approval of these reforms, we'll alleviate our prison and jail crowding problems, we'll keep violent criminals locked up, and we'll make Alabama a safer place to live.

And I'm also asking you to work with me to stop the spread of gambling in our state. We need to redefine what sweepstakes and bingo are - because if it looks like a slot machine, sounds like a slot machine and acts like a slot machine, ladies and gentlemen, it's a slot machine. And we should close the loophole that allows it to be called a sweepstakes game or bingo. The people of Alabama have spoken again and again on this issue. They oppose the expansion of gambling in our state. So do I and so should you.

All crimes are an assault on our society, but crimes against children are an attack on the very soul of our society.

Among the worst of these crimes is child pornography. So I'm asking you to support legislation that cracks down on child pornographers. Attorney General Troy King will introduce proposals that make computer-generated child pornography illegal and ensure that each item of child pornography in someone's possession is treated as a separate criminal offense. If you're caught with 500 computer images, I want you to get punished for committing 500 crimes against children - not just one. When I served in Congress, I introduced a bill that was passed by Congress and signed into law by the President to outlaw the possession of any item of child pornography. It set a zero tolerance policy at the federal level. When it comes to child pornography, we must have nothing less a zero tolerance policy in Alabama.

There's another change you can make to protect children.

All human life deserves to have equal protection from crime. And those who commit violent acts against any child - born and unborn - should be punished severely. 32 states have laws recognizing that the murder or assault of an unborn child is a crime, but Alabama does not. I ask you - once and for all - pass a law that acknowledges the simple truth that crimes of violence against a pregnant woman have not one, but two victims.

Three years ago, I promised we would take Alabama in a new direction. Tonight, I think it's clear that we have. We saw neighbors without work, and we created new jobs. We saw children who could not read, and we put the Reading Initiative in every kindergarten, first, second and third grades. We saw corruption in government, and we brought it to an end.

Alabama is moving in a new direction, and the credit belongs to the people of Alabama.

We're moving forward, stronger, prouder and better than ever. And this is no time to turn back.

In my first act as Governor, I asked for the people of Alabama to pray for me, for our elected leaders and for our state.

Tonight, as we embark on this new session, I ask for your prayers once again. And I will pray for each one of you. Let's pray that God continually reminds us that power has only one true and noble purpose - and that is to serve the people.

Thank you. God Bless America and the great state of Alabama.