Pennsylvania governor's budget plan would drastically reduce purse subsidies

Gov. Tom Wolf of Pennsylvania has once again proposed redirecting $200 million in subsidies that are currently flowing to the state’s racing industry to pay for college scholarships as part of his budget plan.

The proposal, which fell flat last year when it was first brought up, is one of a number of controversial elements in the budget plan, which would increase the state tax burden on wealthy individuals and legalize recreational marijuana. The Philadephia Inquirer characterized the budget plan as “dead on arrival” with the state’s Republicans, who control the legislature.

Pennsylvania’s Standardbred and Thoroughbred industries have been receiving subsidies from casinos since slot machines were legalized at racetracks 17 years ago. The subsidies now account for nearly 95 percent of all purse distribution in the state.

In total, the subsidies amounted to $220 million in 2020, according to state records. Wolf’s plan would shift $199 million from that total to provide financial aid to college students. Wolf made the same proposal last year, and it went nowhere in the legislature.

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But the calculus is different this year. The COVID-19 pandemic has significantly increased inequality in states across the U.S., and state leaders are struggling with unanticipated budgetary problems.

Pete Peterson, a spokesman for the Pennsylvania Equine Coalition, which represents Standardbred and Thoroughbred interests in the state, said that the proposal “would result in the end of horse racing” in the state. Peterson noted that the subsidies flow to a vast array of agricultural businesses in the state due to the costs associated with maintaining a horse, either while racing or breeding.

Peterson also pointed out that the state legislature passed a law in 2017 establishing a trust for the Race Horse Development Fund, which administers the purse and breeding subsidies.

“Given the proposal’s far-reaching negative impacts on Pennsylvania’s agricultural industry and the significant legal issues it faces, we are optimistic that the legislature will again reject this proposal,” Peterson said.

Susan Spicka, the executive director of the Education Voters of Pennsylvania, an education lobbying group, told the Inquirer that the financial aid would provide skilled workers for the state, considering that the aid is focused on students in the health-care and education fields and creates requirements for graduates to stay in Pennsylvania.

“The legislature has to make a choice,” she said. “They can either fund college students who will become our nurses and teachers or continue to give $200 million to wealthy horse owners, many of whom live out of state.”