Horse racing industry attacks plan to shift funds

HARRISBURG - Pennsylvania horse racing leaders say Gov. Corbett's proposal to remove $72 million from a special fund created from slot-machine revenues threatens the state's thriving equine industry.

Seeking to address a budget shortfall, Corbett wants to shift the money from the Race Horse Development Fund into agricultural and veterinary research and funding for county fairs.

Industry leaders, who were granted an unusual formal hearing before the House Appropriations Committee on Wednesday, said the move would cause horse-breeding incentives and winners' purses to plummet.

Gone, too, would be as many as 15,000 jobs in horse racing and related services, such as blacksmiths and feed vendors, they said.

Under Corbett's proposal, "moving the funds will make it possible for one segment of agriculture to assist another to keep industry viable," Samantha Krepps, spokeswoman for the Department of Agriculture, said Wednesday.

The siphoning of $72 million would be a second hit for the fund in as many years. Corbett removed $47 million from the fund last year.

Sal DeBunda, president of the Pennsylvania Thoroughbred Horsemen's Association, told the committee that if the proposal goes through, it will break a promise the state made to the industry in 2004, when the fund was created as part of legislation to legalize slot-machine gambling.

"A compact was made with all the stakeholders," DeBunda testified. "It's not just about the money, it's about the message going out to people who want to invest in the commonwealth."

Todd Mostoller, executive director of the Pennsylvania Horseman's Benevolent Fund, said the racing industry had grown from $1.5 billion in 2001 to $4 billion in 2011, and supports 23,000 jobs. "The majority of the money stays in Pennsylvania," he testified.

"Every horse is a job creator," said DeBunda. "But unlike a factory, you can put him on a van and he can create jobs somewhere else."

Corbett's proposed budget for the next fiscal year would shift $44.7 million to Agriculture Research and Extension; $26.5 million to the University of Pennsylvania for veterinary activities; $236,000 for the Veterinary Center for Infectious Diseases, also at Penn; and $874,000 to Pennsylvania fairs.

Since 2004, the Race Horse Development Fund has generated $1 billion for the industry by setting aside a percentage of slot machine revenues. Last year, $228 million of those revenues went to the fund. Approval of the shift would leave $166 million on hand.

The funding has helped boost winners' purses, supported a breeder's fund that awards sums to owners of winning Pennsylvania-bred horses, and provided health and pension benefits for horsemen.

Carl McEntee, director of bloodstock services for Northview Stallion Station in Lancaster County - home to Kentucky Derby winner Smarty Jones - said owner Richard Golden had invested $15 million in the Pennsylvania economy in the last six years.

McEntee testified, "I am deeply concerned that the state is turning its back on the racing industry and on the commitment it made with the racing industry."