PA Racing Commission Opposes Governor's Budget Plan

[Editor's note: The Pennsylvania Department of Agriculture contacted BloodHorse Feb. 27 to dispute the report from Play Pennsylvania that Secretary Russell Redding was unaware of Gov. Tom Wolf's budget proposal prior to the governor's annual budget address Feb. 4. Emily Demsey, Department of Agriculture communications director, said Redding was aware of the budget proposal for several weeks prior to the governor's address. Play Pennsylvania said it stands by the accuracy of its report.]

Gov. Tom Wolf's visit to Pennsbury High School in Fairless Hills, Pa., located in Bucks County, Feb. 26 to promote his proposed tuition reimbursement program comes on the heels of a major revelation Tuesday evening by a Wolf administration cabinet member.

Speaking Feb. 25 to the news outlet Play Pennsylvania, the state's Secretary of Agriculture Russell Redding revealed that neither the governor nor his staff consulted with the secretary before making a budget proposal to transfer $204 million from the Race Horse Development Trust Fund, an encumbered trust that is funded by casino slot machine revenues. The money in the fund, which is paid for out of casino slot machine revenues and are not taxpayer dollars, serves as the lifeblood of the state's horse breeding and racing industry by funding purses and breeder incentives.

Members of the State Horse Racing Commission, chaired by Redding, passed a unanimous resolution opposing the governor's proposed transfer of funds Tuesday. When asked if the governor or his staff understands what it means that the funds are in an encumbered trust, Redding gave a frank response: "I don't think so."  

The revelations by Redding follow mounting concerns by Pennsylvania's horse breeding and racing industry that the proposed transfer, if approved, would result in the end of horse racing in Pennsylvania.

As Redding has stated in recent years, the racing and breeding industry support more than 20,000 jobs, deliver an economic impact of $1.6 billion, and is responsible for preserving significant amounts of open space. Redding has also noted that the racing and breeding industry are a vital part of the state's larger agriculture sector, due to "the investment in new farms, breeding stock, equipment, veterinary services, and agricultural production, strengthening Pennsylvania's agricultural community."

The governor's proposal would put countless small, family-operated horse breeding farms out of business as they rely on the breeder incentives and purses to maintain their farms and purchase hay and feed for their horses. 

Kate Goldenberg owns and operates Safe Haven Equine Rescue in Perkasie, Pa., a sanctuary for retired and injured horses, as well as a haven for people to find emotional healing through their interactions with horses on her harm. She has over 35 horses on her farm, many of whom she took in after their racing careers ended.

"The breeding incentives fund my ability to rescue and care for these horses," said Goldenberg. "Without the breeder incentives, I can't keep this farm alive."

Bill Hartwell, who operates a 31-acre farm that is home to eight horses in Buckingham, Pa., noted that developers have tried to buy pieces of his farm for many years. If the governor's proposal goes through, he said he would likely have to sell off portions of his farm.

He also noted that the purses he earns from racing his horses at Parx Racing in Bensalem, Pa., help to cover the cost of their care. He said he typically buys more than $100,000 a year in hay, feed, and supplies from a small business in Bucks County. He also pays local veterinarians, blacksmiths, transportation haulers, and others that are based in Bucks County. He typically has three interns from Delaware Valley University in Bucks County work on his farm each semester.

"People have invested their hearts and souls into this industry," said Hartwell. "They spend countless hours and significant money raising these horses and hoping for the best—that they will earn some money by racing to help cover their costs. You can't just break your commitment to these people who have invested all of this time and energy into an industry."

John Servis is a Parx-based trainer who gained national recognition for training Smarty Jones, a Pennsylvania-bred horse that nearly captured the Triple Crown. He echoed the devastating impact this would have on the industry.

"Taking $200 million from PA horse racing would be absolutely devastating for not only the horseman and breeders but the entire agriculture industry," said Servis. "If this passes I will be putting a for sale sign on my house right away."

Pete Peterson, spokesperson for the Pennsylvania Equine Coalition, said it is important to understand that the governor is seeking to divert non-tax dollars from the Race Horse Development Fund. In 2017, the legislature passed—and Wolf signed into law—legislation (Act 47) that specifically states the money in the RHDTF "are not funds of the Commonwealth" and "the Commonwealth is not rightfully entitled" to the funds.

"Before gaming was expanded in the mid-2000s, track operators contributed to racing purses with a percentage of the money that was gambled on horse racing," said Peterson  "When the discussions were occurring about legalizing slot machines, everyone knew that adding a new form of competition for gambling dollars would result in less betting on horse races, so the track operators agreed to continue to supplement the racing purses, but with a portion of the revenue the tracks earned from slot machines. This also provided an added benefit, ensuring that the economic benefits of expanded gaming would not be limited to a 10-miles radius around casinos, but would be spread to rural communities throughout Pennsylvania that rely on our agricultural industry.

"Yes, college tuition is spiraling out of control and college debt is a major concern," said Peterson. "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."