Lawmakers Agree On $5 Million Loan to NYRA
Updated: Monday, March 27, 2006 1:06 PM
Posted: Friday, March 24, 2006 5:39 PM
New York lawmakers are backing a deal to provide a $5 million loan to the New York Racing Association and provide a $2 million infusion of funds to a Thoroughbred breeding and development fund.
The financial agreements were made March 24 between Senate and Assembly negotiators working on a 2006 state budget for New York. The NYRA and breeding fund provisions would be included in a budget lawmakers hope to pass by March 31. It would then need Gov. George Pataki's approval.
The NYRA loan from the state replaces a deal announced previously in which the Port Authority of New York and New Jersey would purchase a piece of land at Aqueduct racetrack from NYRA for $5 million. The Port Authority already gave NYRA a $1 million advance for that project.
The new deal, legislative negotiators said, would see NYRA repay the Port Authority the $1 million, with interest. The state would then loan NYRA $5 million from the administrative account of the state Lottery Division. The loan would be repaid by NYRA at a 4% interest rate by Dec. 31, 2007, the day the NYRA franchise to run Aqueduct, Belmont and Saratoga expires. It was not immediately clear why the Port Authority deal fell through.
NYRA officials last fall said they faced bankruptcy if the state did not help steer a bailout to help defuse a cash flow crisis. The $5 million loan is part of an overall $30 million financial aid package the state said in December it would steer to NYRA.
Besides the NYRA money, the legislative negotiators have agreed to re-direct part of the revenues the state receives from a pari-mutuel tax on bettors to a state fund that provides incentives for Thoroughbred breeding. It will be worth about $2 million this year. The deal also calls for about $1 million to go to the state's off-track betting corporations.
Budget negotiators said the state's breeders had argued the breeding fund needs money because it had been counting on revenues from a video lottery terminal casino at Aqueduct. But delays on the project have pushed its completion until next spring.
Senate Majority Leader Joseph Bruno, himself a Thoroughbred owner over the years, said the money would help the state's breeding industry "to keep viable" with other Thoroughbred states. "It could be helpful and productive," he told colleagues during a budget meeting March 24.
The negotiators also shelved, for now anyway, plans by Pataki to create a single state agency to oversee entities engaged in gambling activities – tracks, casinos and charitable gaming organizations. Pataki wanted to shut down the state Racing and Wagering Board, and merge its operations with the lottery agency and others that regulate or monitor gambling in the state.
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