Harrisburg, PA — Individuals throughout Pennsylvania’s agriculture industry reacted with alarm today to Governor Tom Wolf’s FY 2020-21 budget proposal, which seeks to raid $204 million from the Race Horse Development Trust Fund.
“If approved by the legislature, this raid would 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,” said Pete Peterson, Executive Director of the Pennsylvania Equine Coalition, an organization representing the six Thoroughbred and Standardbred horsemen and breeder associations in the state. “This scheme would destroy an industry that provides a $1.6 billion economic impact and supports an estimated 16,000 to 23,000 jobs in the agriculture, manufacturing, construction, retail and hospitality industries here in Pennsylvania.
“Race horse owners and breeders whose operations preserve 100,000 acres of open space in Pennsylvania would be put out of business. Hundreds of farmers who preserve tens of thousands of additional acres growing crops such as straw for bedding and alfalfa and other feed products for horsemen — their largest and highest paying customers — would face financial ruin. This anti-agriculture budget could not come at a worse time for many Pennsylvania farmers who are already struggling financially, as evidenced by a 20 percent increase in farm bankruptcies in 2019.”
Peterson noted that purses and breeder incentives enable owners and breeders to pay a range of individuals in a variety of jobs directly tied to racing, such as jockeys and drivers, trainers, farriers/blacksmiths, veterinarians, exercise riders, grooms, equine dentists, equine therapists, jockey agents, hot walkers, nutritionists, bloodstock agents, and more. 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, capital investments to replace barns and fencing, and more.
Beyond the economic ramifications, Peterson noted that the Governor’s proposal is fundamentally flawed as it seeks to raid a trust fund the legislature established in 2017 to blocking such transfers. Money in the Race Horse Development Trust Fund (RHDTF) comes from an assessment paid by casinos on their gross terminal revenues from slot machine gaming. The legislature noted in the 2017 Race Horse Industry Reform Act that the money in the RHDTF “are not funds of the Commonwealth” and that the “Commonwealth shall not be rightfully entitled to any money” in the RHDTF.
The goal of the trust fund language was to spur new long-term investment in Pennsylvania’s racing and breeding industry by providing increased economic certainty for investors. The trust fund language has been working as intended, spurring millions of dollars in new investment in the state economy by horse owners, breeders, and other businesses in the past two years. In addition, Peterson noted that because the raid is not legal, it leaves a primary initiative of the Governor without a viable funding source.