Pennsylvania lawmakers are proposing a bill that would subsidize the state’s multibillion-dollar horse-racing industry by paying for horse racers’ compliance costs with money from consumers visiting the state’s government-approved casinos.
The bill, Senate Bill 352, would reallocate money from the Pennsylvania Race Horse Development Fund (PHRDF) to the nearly empty State Racing Fund, paying for two state regulatory boards’ operations and racehorse owners’ drug testing fees.
Since 2001, state tax revenue from horse races has declined by 65 percent, and wagering volume has declined by 71 percent over the same period.
Horses and Handouts
Bob Dick, a policy analyst for the Commonwealth Foundation says the bill is a taxpayer-funded bailout.
“Rather than handing out special subsidies to favored industries, lawmakers could cut corporate welfare and use the savings to lower Pennsylvania’s corporate tax rate, which is one of the highest in the industrialized world. The racing fund has been bailed out in the past, and there’s no guarantee another infusion of cash, even on a permanent basis, will keep it solvent in the future.”
Saying ‘Neigh’ to Bailouts
Dick says private businesses should work together to regulate themselves, instead of leaving taxpayers holding the feed bag.
“Having the industry pay for its own regulations is a much better alternative [than] sticking taxpayers with the bill,” Dick said.
Frank Gamrat, a senior research associate at the Allegheny Institute for Public Policy, says using general fund revenues to bail out the declining horse-racing industry is an unacceptable option.
“SB 352 proposes that funding to support the Race Horse Industry Reform Act come from three sources … the State Racing Fund, the PHRDF, and, if those two are not sufficient, the general fund,” Gamrat said. “Thus, the general fund is being used as a backstop for the industry. If the industry is not self-sustaining, it should find ways to cut costs or raise its own revenues.”
Gabrielle Cintorino ([email protected]) writes from Nashville, Tennessee.