Milking New Hampshire taxpayers for bailout money
Politicians love nothing more than milking taxpayers to bail out their favored industries. Case in point: A few of our own state lawmakers want to prop up the state’s dairy farmers with $3.6 million in taxpayer money. Not only that, but they’re trying to pass it as soon as possible – and without the rest of us noticing.
Here’s the backstory: A drop in milk prices nationally and this year’s drought have hurt dairy farmers’ ability to turn a profit. But rather than do what other businesses do in down times – change their business model or make themselves a little leaner – some have instead turned to Agricultural Commissioner Lorraine Stuart Merrill for help. In meetings behind closed doors, they have devised a plan to use public money to guarantee their own private profits.
Specifically, lawmakers are using a long-dormant vehicle for the bailout: the little-known Milk Producers Emergency Relief Fund. Created in 2007 after the first bailout in 2006, the fund has a board comprising state lawmakers, agency officials and industry stakeholders hand-picked by the governor. In 2006 and 2007, they doled out over $5 million to dairy farmers under similar circumstances. Now they’re trying to put taxpayers on the hook for even more.
This is the epitome of a special-interest handout – especially when you consider that many of the board members would directly benefit from any bailout.
Among the board members who would reap rewards from a bailout is Commissioner Merrill. She owns a 370-acre dairy enterprise in Stratham. She may even benefit more than most other farmers in the state.
Under her proposed formula, farmers in all but the southern part of the state would receive a subsidy for 10 percent of their feed cost, whereas farmers in southern New Hampshire – where Merrill runs her farm – would receive subsidies for 35 percent of their feed cost. That’s a 250 percent difference.
This reeks of political favoritism. But the more important question is why this bailout is happening at all. Many supporters cite a statistic that 19 of New Hampshire’s 120 dairy farms have already gone out of business in the last year. As it turns out, state reports actually reveal that those 19 farms have simply stopped selling milk – not that they have actually shut down.
In fact, state Sen. Andy Sanborn went to visit a number of farms to evaluate the problem for himself.
As far as he could find, only one farm has gone out of business. The rest have refocused elsewhere – what businesses are supposed to do when the going gets tough.
As he tells it, "Virtually every farm that I am aware of doesn’t just milk cows for a living … Some also grow vegetables, some slaughter pigs and cows, because the farmers have realized over a long period of time, based on government regulating the price of milk, that they had to diversify – and most, if not all, of them have."
Wholesale milk prices are set by the federal government and have dropped by 40 percent since 2014. Now, some state officials want to compensate for harmful federal price controls by bailing out private businesses with taxpayer dollars. More government distortion is not the solution to bad government policy.
What makes it all the more galling is that Commissioner Lorraine Merrill and industry supporters recommended the bailout without any public debate. In fact, the commission refused to take testimony from several individuals who attended the meeting to oppose the bailout plan.
The bailout’s backers have said they plan to hold a hearing this month, but many of those lawmakers will soon be out the door come Nov. 8. It’s essentially a lame-duck hearing to check the box before trying to pass the bailout anyway on Dec. 7, the first day of the new legislative session.
But any bailout that’s passed on the first day – or even in the first few weeks – would also sidestep the normal budgetary process, a necessary way to vet requests and evaluate how this would affect the state’s finances. It’s just one more sign of how special interests don’t mind breaking the rules to benefit themselves.
It’s up to us to stop them. Over the next month, New Hampshire taxpayers need to let their legislators know that they don’t support a dairy bailout – especially one that’s devised behind closed doors and benefits its own drafters. Granite Staters don’t need to be milked.
Greg Moore is the New Hampshire state director of Americans for Prosperity.