PA governor again proposes to gut Race Horse Development Fund Trust

By: Tom LaMarra

Posted: Feb. 4, 2021

For the second consecutive year, Gov. Tom Wolf has proposed taking about $200 million—roughly 80% of the 2019 total—from the Pennsylvania Race Horse Development Fund Trust, a move the Pennsylvania Equine Coalition said would result in the end of horse racing in the state.

Racing and breeding, the PEC said Feb. 4 in a statement, is an integral part of the state’s agriculture industry that supports hundreds of small businesses and 20,000 family-sustaining jobs. The group—four horsemen’s associations and two breed organizations in both Thoroughbred and Standardbred racing—noted the proposed budget repeats a recommendation the Wolf Administration put forth last year that failed to gain traction in the legislature.

Wolf last year and now in 2021 wants to take racing’s statutory share of revenue from slot machines at casinos to fund college-related financial relief programs.

“It is hard to fathom why the Wolf Administration would once again put forward a fundamentally flawed proposal that was widely dismissed and failed to gain any meaningful support last year in the legislature,” PEC spokesman Pete Peterson said. “This proposal would result in the end of horse racing, which supports 20,000 jobs, delivers an annual $1.6 billion economic impact, and preserves hundreds of thousands of acres of open space.”

Pennsylvania racing and breeding already has taken a hit given shutdowns—of tracks and casinos because of COVID-19 restrictions—that in 2020 eliminated more than three months of business, both pari-mutuel and gaming. According to Pennsylvania Gaming Control Board statistics, the PRHDFT was down roughly 40% from the $236 million recorded in 2019.

The PRHDFT derives revenue from slots at bricks-and-mortar facilities, not Internet casino gaming systems operated by the state’s casinos. The latter set records in 2020 and that trend continued in January 2021, according to the PGCB.

Peterson said the effects would be felt well beyond Pennsylvanians who work at a racetrack or breed horses. Purse money earned by a horse enables the owner to buy hay and straw from farmers, feed from local feed mills, as well as pay the horse’s jockey, trainer, blacksmith, groom, veterinarian, and equine dentist. In addition, countless small businesses in the manufacturing, retail and construction industries count horsemen and breeders among their major customers for horse trailers and vehicles, feed equipment, riding tack and other supplies, the construction or repair of barns and fencing, and more.

“Given the current economic climate, we should be looking for ways to provide support to struggling working families and small businesses, not threatening their jobs and livelihoods,” Peterson said. “Eliminating horse racing and breeding would have far-reaching negative impacts throughout the agriculture industry, Pennsylvania’s leading economic sector, as well as the broader state economy. Pennsylvanians who work in or rely on the horseracing industry to support their families already face financial challenges due to the COVID-related shutdown of racetracks and casinos last year and this proposal will only add to their stress.

“Everyone recognizes that college debt and rising tuition rates are major problems, but you don’t fix one debt problem by putting an entire sector of the agriculture industry out of business and thousands of people out of work.”

Peterson said the proposal to divert non-tax dollars from the RHDTF for purposes other than what they were intended faces a significant legal hurdled, as it did last year. In 2017, the General Assembly passed—and Wolf signed into law—legislation that specifically states the amounts in the RHDTF “are not funds of the Commonwealth” and that “the Commonwealth shall not be rightfully entitled” to the RHDTF funds.

The protection language was adopted in order to spur new long-term investment in Pennsylvania’s racing and breeding industry by providing increased economic certainty for investors, Peterson said.

“Given the proposal’s far-reaching negative impacts on Pennsylvania’s agricultural industry and the significant legal issues it faces, we are optimistic that the legislature will again reject this proposal,” Peterson said. “These next few months are an extremely important time for horse breeders, as customers are deciding right now whether they want to breed their horses here in Pennsylvania or in other states such as New York, Virginia, Maryland, or Kentucky. Putting this idea out there—even though it has little chance of success—will result in real financial harm to our breeding farms here in Pennsylvania.”