Legislature(2005 - 2006)BUTROVICH 205
04/22/2005 03:30 PM RESOURCES
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CSHJR 5(RES)-NO MILK TAX CHAIR WAGONER announced HJR 5 to be up for consideration. REPRESENTATIVE BOB LYNN, sponsor, explained that the milk tax or Dairy Stabilization Act of 1983 was a mandatory dairy promotion assessment established by Congress in 1983 to help increase the sale of surplus milk in the Lower 48 states through generic mass advertising such as the "Got Milk" campaign. This act was maintained by the Farm Security and Rural Investment Act of 2002. Alaska, Hawaii and Puerto Rico were specifically exempted from the milk tax, because they are all milk deficit states. The tax would be a serious detriment to Alaska milk producers and consumers and would benefit Lower 48 states that do have a surplus. The National Milk Federation pushed for this tax so the U.S. Department of Agriculture could start taxing foreign milk importers. Under the World Trade Organization (WTO) rules, foreign imports can't be taxed unless all domestic sources are also taxed. HJR 5 is supported by Senator Lisa Murkowski, Senator Ted Stevens and Congressman Don Young and a number of other members of Congress. REPRESENTATIVE LYNN said: The bottom line is that Alaska does not need to add to the already high price of milk. Milk in bush Alaska is already outrageous - sometimes up to $8 or $10 a gallon - almost to the point that children are drinking soda pop rather than drinking milk because it is less expensive. He said that day care centers would also feel the pinch. Dairy farmers can hardly make ends meet the way it is now without having this additional burden. 4:12:55 PM ILONA RICHEY, Director, Government Relations, Alaska Dairy Coalition, supported HJR 5 and the comments of the sponsor. "We do not need increased costs in Anchorage and other transportation, especially not in the bush...." She said this would mean an average cost of $2,700 annually to dairy farmers and there would absolutely be no benefits to them. There are also concerns about the increased costs to the Native population that lives in rural Alaska. 4:18:04 PM CHAIR WAGONER asked how she got the $2,700 figure for the dairy farmers. MS. RICHEY replied that would be the average tax levied on the milk they produce. It would be about five to twenty cents per gallon. She didn't have exact figures. 4:18:46 PM TERRY ROBERTSON, Robertson Enterprises, said she owns and operates two non-profit daycare centers in Anchorage servicing about 200 low-income subsidized children a day. Her centers use about 3,000 gals of milk per year and a twenty-cent tax would add $600 annually to her operating budget. 4:20:00 PM JIM EICHSTADT, Dairy Trade Coalition, Madison WI, said he has been involved in the dairy industry since the early 1980s when the milk tax was originally implemented and added to Ms. Richey's statement that Alaska has never been a part of the federal dairy policy scheme - and for good reason - because Alaska is a milk deficit state, it doesn't participate in federal milk marketing orders or other regulatory affairs run by the federal government in the Lower 48. The milk tax is probably the worst way that Alaskan can possibly participate in the federal dairy program, because even in the Lower 48, the milk tax is a very controversial program that a lot of farmers down here want to get rid of, because it doesn't benefit them. It's just an added cost that they could do without.... 4:21:37 PM SENATOR SEEKINS moved to report CSHJR 5(RES) out of committee with individual recommendations. There were no objections and it was so ordered.