The following is my testimony before the House Resource Comittee against a "Milk Tax " in Alaska. The resolution successfully passed out of the Committee.
Co-Chair Samuels, Co-Chair Ramras, and Honorable Members of the Resource Committee:
Good afternoon and thank you for hearing HJR 5, a resolution that opposes a milk tax in Alaska.
The proposed tax comes from a “Mandatory Dairy Promotion Assessment imposed on milk producers by Congress in 1983, more than 22 years ago, for the purpose of decreasing milk surpluses, by increasing sales of milk through an aggressive marketing program in the Lower 48. You may have seen some of the “Got Milk?” television commercials. The actual congressional legislation was entitled The Dairy Stabilization Act of 1983. That tax was maintained by the subsequent Farm Security and Rural Investment Act of 2002.
The important thing to know, for the purpose of this resolution, is that Alaska, Hawaii, and Puerto Rico were specifically exempted from the Milk Tax, because Alaska, along with Hawaii and Puerto Rico are all “milk deficit jurisdictions.” We certainly don’t have anything close to milk surplus here in Alaska. What we have is a milk deficit. That’s why it doesn’t make sense to tax Alaska milk producers – and indirectly everybody in Alaska, to push the sale of a commodity we have a shortage of. A milk tax would be a serious detriment to Alaska milk producers and consumers, to benefit Lower 48 states in disposing of their milk surplus.
Apparently, part of the push for a milk tax in Alaska comes from the National Milk Federation in the Lower 48, in their effort to have the US Department of Agriculture start taxing foreign milk importers. Under the World Trade Organization rule, WTO rules, foreign milk imports can’t be taxed unless all domestic milk sources are taxed.
This resolution before you has the strong backing of Senator Lisa Murkowski, Senator Ted Stevens, Congressman Don Young, plus a number of other Congresspersons, as evidenced by their jointly signed letter that should be in your packet.
The “bottom line” is: Alaska doesn’t need a tax on top of the already high price of milk. The price of milk in Bush communities is already outrageous, sometimes 8 dollars a gallon. The cost of milk is outrageous to the point that too many children are drinking sugar laden soft drinks rather than milk, because soft drinks are less expensive. Day care centers all over Alaska can hardly afford cost of milk as it is, without imposing additional costs. Dairy farmers in Alaska are having a tough time making ends meet as it is meet now, without the additional burden of a milk tax. A milk tax in Alaska would qualify for a “That’s Incredible Award,” and I urge you to support this resolution.
I believe we have several experts on line ready to testify on the milk tax issue, and I would refer technical questions to them. Your support of HJR 5 is respectfully requested.