Pennsylvania Breeders Battling Budget Perception

Pennsylvania Thoroughbred breeders were eagerly anticipating a booming breeding season this year, expecting to build on 47% growth in mares bred that has occurred since 2016.

Then Gov. Tom Wolf announced his new budget Feb. 4 that proposed raiding $204 million from the Pennsylvania Race Horse Development Fund and redirecting it to college scholarships. The fund, which receives $250 million annually from casino revenue, is the dedicated source of all breeders' awards, stallion awards, and purse supplements for state-bred runners.

The governor's budget proposal not only dragged a needle across the state breeding and racing industries' long-playing melody of prosperity, it is threatening to curtail what promised to be the most successful breeding season since 2014.

"It has absolutely caused chaos going into the breeding season," said Brian Sanfratello, the executive secretary for the Pennsylvania Horse Breeders Association.

What is most frustrating, said Sanfratello and other Thoroughbred industry professionals, is that what the governor is proposing is a clear violation of state law and highly unlikely to happen, but its mere mention might be enough to scare off breeders.

"Before there was a trust, every year someone was trying to take money for something," Sanfratello said. "We sat down with legislators back in 2017 and told them in order for Pennsylvania to grow in breeding and racing, we need something in that Race Horse Development Fund that is going to stop the state from touching the money. That is how the legislation came into being and was signed by Gov. Wolf."

A section of the expanded gaming legislation of 2017 includes a provision called "Protection of Funds." This section states: "Daily assessments collected or received by the Department under Section 1405 (related to the Pennsylvania Race Horse Development Fund) are not funds of the Commonwealth. … The Commonwealth shall not be rightfully entitled to any money described under this section and sections 1405 and 1406."

"When that trust was put into law, then people felt that they could commit to the four or five years they are going to need to see their business plans go into effect and horses are running," Sanfratello said. "From 2017 to 2019, the breeding program in Pennsylvania exploded. We went from 554 mares bred in 2016 to 814. That is a 47% increase, which is unprecedented in almost every other state. In 2020, we would have blown that 814 number away if it were not for the governor's budget."

Among the states reporting 50 or more mares bred in 2019, Pennsylvania is the only state to show double-digit percent growth between 2016-19. The only other state to report growth is Arizona at 9%, according to The Jockey Club's reports of mares bred.

"I've been here awhile, and I can't remember a time when we had stallions breeding over 100 mares," Sanfratello said, noting that Northview PA's Hoppertunity  bred 129 mares last year and WynOaks Farm's Warrior's Reward  bred 115.

Pennsylvania farms have added 15 stallions to the market since 2018. The new sires for 2020 include grade 1 winner Ice Box  to Cabin Creek Farm; grade 1-placed winner Normandy Invasion  to Pin Oak Lane Farm; grade 2 winner Desert Party  to Godstone Farm; and grade 1-placed, grade 2 winner Airoforce  and grade 1-placed, grade 3 winner Uncle Vinny  to Equistar Training and Breeding Center.

The Race Horse Development Fund also supports the state's Standardbred breeding and racing industries, whose members have banded with the Thoroughbred community to deliver two key messages to legislators: The fund is not a subsidy that primarily supports horse owners outside of Pennsylvania, and the fund is not tax dollars to be used at the state government's discretion.

"This money is absolutely being reinvested in Pennsylvania," said Randy Brungard, owner of the 360-acre Brungard Farm near Howard, Pa. "When a horse wins a race, they earn purse money for their owner, which the owner then uses to pay the horse's jockey, trainer, blacksmith, groom, veterinarian, and equine dentist, as well as buy hay and straw from farmers, feed from local feed mills, and supplies and equipment from small businesses. They reinvest that money in new barns and fencing on their farms that are constructed by local carpenters and purchase horse trailers, tractors, and farm equipment that are sold here in Pennsylvania. The economic impact is tremendous and far-reaching." 

Sanfratello said it has been estimated that 90% of the Race Development Fund dollars remain in Pennsylvania, vital to an industry that has a $1.6 billion economic impact, supports more than 20,000 jobs, and preserves more than 100,000 acres of green space.

The attack on the development fund also has drawn opposition from farmers who are providing hay and grain to the horse farms and even mushroom growers who depend on horse manure to grow their crops.

"Yes, college tuition is spiraling out of control and college debt is a major concern," said Pete Peterson, a spokesman for the Pennsylvania Equine Coalition. "But you don't fix one debt problem by creating another debt problem and putting 20,000 people out of work and bankrupting businesses and farms. If this is a priority for the governor, he needs to find another source of funding because his current plan would be a disaster for Pennsylvania agriculture, farms, and small businesses."