NYRA Privatization Stalls During NY Budget Wrangling

Budget negotiators in New York remain split over a number of racing industry proposals as the clock ticks down toward a March 31 deadline to conclude the state's new fiscal plan.

The major racing industry fight, once again, centers on the New York Racing Association. Originally due to emerge in 2015 from a three-year state oversight program in which the NYRA board has been controlled by appointees loyal to Gov. Andrew Cuomo, NYRA is now operating on its second one-year extension of a law giving the governor de facto control of its board.

The NYRA privatization issue is stalled at the state Captiol to the point that lawmakers say it could be stripped out of talks over a new state budget and dealt with during the end of session in June. In New York, both fiscal and non-fiscal matters are often jammed into a budget as part of Albany's leverage-seeking ways to get support for measures that would not otherwise stand on their own as single pieces of legislation.

Cuomo in January dropped a 2017 plan in which he sought to keep considerable control over the NYRA board appointments and, even more controversial, to allow the state to claw back video lottery terminal revenues from Aquduct Racetrack's casino, a portion of which goes to NYRA, purses, and breeders.

Cuomo's 2017 plan would allow him to appoint six members of the NYRA board, two of whom would be tapped by the leaders of the Assembly and Senate. Cuomo would also get to name the board chair, and the NYRA president would get a seat on the board. The remaining eight members would be selected by the current executive committee of the board, a number of whom are current Cuomo appointees.

The governor's plan also calls for sweeping new powers of the Franchise Oversight Board, a panel created in 2008 to monitor NYRA's finances. The panel would be permitted to take "corrective" actions against NYRA, including encumbering VLT revenues for any host of reasons it, on its own, deems necessary.

Both legislative houses, in recent one-house budget proposals of their own, rejected Cuomo's call for additional legal powers to the panel to move in on NYRA. Additionally, both houses OKed giving one seat each on the NYRA board to a representative of the New York Breeders and the New York Thoroughbred Horsemen's Association.

As a compromise, lawmakers this week have talked of giving the two industry groups a total of one seat, meaning the organizations would have to both agree who would sit on the NYRA board to represent their interests.

"We don't think that's right,'' Assemblyman Gary Pretlow, chairman of the Assembly racing and wagering committee who is involved in the negotiations. If the oversight panel is given broad new powers "they'll always have that threat over the NYRA board to do the governor's bidding" and then "they become the real NYRA board.''

On the possibility that the NYRA issue is punted to later in the legislative session and is not a part of the upcoming state budget the sides are trying to put together this week, Pretlow said: "Anything is possible.''

Another Cuomo proposal meeting resistance in the Legislature is his effort to end state funding associated with equine drug testing in the horse racing industry. The state projects this cut would save $4.5 million—an amount that should, instead, be paid by those who "actually participate in horse racing,'' according to the state budget plan Cuomo laid out in January.

"The state assumed those costs as an accommodation to the tracks,'' the Cuomo budget plan states of the 1986 assumption of those expenses by the state. "The tracks now benefit from video lottery gaming subsidies, which the tracks and the horsepersons can use to resume their historical responsibility for drug testing costs."

The Cuomo plan would also end the exclusive testing rights at the state university college at Morrisville, placing out a bid to instead give the business to a possibly private entity.

In their one house budget bills passed earlier in March, both the Senate and Assembly rejected the Morrisville testing idea and Cuomo's call for the racing industry to pay for the total tab for equine drug tests. Pretlow said the facility at Morrisville has already been equipped after moving from a testing lab at Cornell and that it's too soon to consider again moving the lab.