Pennsylvania Governor Proposes Racing Industry Cuts

Posted on February 28, 2020

Governor Tom Wolf of Pennsylvania must make tough decisions. Each year, he must make budget proposals that lessen funding for one sector to help another sector.

This year, one of those decisions is getting under the hooves of many in Pennsylvania’s horse racing industry. Wolf recently proposed taking $204 million from the Pennsylvania Race Horse Development Trust Fund to pay for the new Nellie Bly Tuition Program.

Budget Plan: Equines for Education

When Wolf and his administration revealed their overall plan, it showed that the funds previously earmarked for the racing industry were to be redirected. The new goal for hundreds of millions of dollars in funds was to encourage students to pursue higher education in Pennsylvania via scholarships.

The Nellie Bly Scholarship Program is named after journalist Elly Cochrane, who wrote under the pen name of Nellie Bly. She attended a local university but could not complete her studies, dropping out in the early 1870s due to the high cost of education.

The Pittsburgh-born writer became known for her pioneering investigative journalism for the Pittsburgh Dispatch, making strides in reporting and for women in the field. However, she never finished her studies at the local university due to cost.

Wolf revealed the new program with his budget proposals. The goal is to help more students complete their education at universities in the Pennsylvania State System of Higher Education (PASSHE) after their Pell Grant and other state loans have been exhausted.

Ultimately, Wolf hopes students can graduate with less debt and stay in Pennsylvania to begin their careers. He hopes to help approximately 25,000 students.

However, the scholarship program comes at the cost of $204 million previously allocated for the Race Horse Development Fund.

The 2004 Pennsylvania Race Horse Development and Gaming Act established the fund to offset any declines in racing wagers as a result of new and proliferating slot machine gaming.

In 2017, the state converted it into a trust fund.

Licensed casinos in Pennsylvania pay an assessment of gross terminal revenue from slots, typically capped at 10% or 12%, which go into the fund. The monies are then distributed as follows:

  • 80% for race purses
  • 16% for breeding, half for Sire Stakes Fund and half for Standardbred Breeders Development Trust Fund
  • 4% for health and pension benefits for members of organizations representing owners, trainers, and track employees
  • $250,000 of last 4% pays organizations for jockeys and drivers for health and life insurance

In 2018, the total amount of tax generated by slot machines for this fund totalled $242 million.

Racing Industry Angry and Worried

One of the first organizations to express concern over Wolf’s proposal was the Pennsylvania Equine Coalition. Executive Director. Pete Peterson did not mince words, saying the change in funding will

“result in the end of horse racing in Pennsylvania by eviscerating the primary funding source for the purses and breeder incentives that serve as the lifeblood of the industry.”

Pat Chapman, owner of 2004 Kentucky Derby winner Smarty Jones, expressed disbelief.

“I cannot believe that our governor would turn his back on the horse breeding and racing industry. This would be absolutely devastating to so many of us in the horse business.”

Others with immediate concerns included the Pennsylvania Horse Breeders Association, Pennsylvania Horsemen’s Benevolent and Protective Association, and Pennsylvania Thoroughbred Horsemen’s Association. Individuals from all corners of the industry, from breeders to suppliers, have expressed their opposition as well.

Wolf and Lawmakers Defend

Some lawmakers expressed concern about funding the scholarship program at the expense of a valued industry in the state. Many Republicans, like Senate Majority Leader Jake Corman, are hesitant to support the Democratic governor’s proposal but have not traditionally supported the Race Horse Development Trust Fund. Across the aisle, Democrats in the legislature seem inclined to support Wolf.

However, conservative groups like the Commonwealth Foundation have long called for the elimination of the horse racing fund. The two sides of the issue are not drawn down party lines.

Wolf defended his proposal with a simple response. “Let’s bet on our kids instead of bankrolling race horse owners and ensure the viability of the Pennsylvania State System of Higher Education.”

Budget hearings are scheduled to run through March 5.

The new fiscal year will begin on July 1, 2020.

 

Jennifer Newell Avatar
Written by
Jennifer Newell

Jennifer Newell is a freelance writer living in her hometown of St. Louis after stints in Los Angeles and Las Vegas. She has written about poker for more than 15 years but added other forms of gambling and horse racing to her repertoire in the last few years. She grew up with a love for horse racing from her now-late father, who loved to play the ponies. Jennifer can be found on Twitter at @writerjen.

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