Driving Us Crazy
by Ray Paulick
Date Posted: 4/9/2002 9:20:46 AM

Ray Paulick
Editor-in-Chief

Just as the automobile replaced the horse and buggy a century ago, the manufacture of automobiles has supplanted in importance the breeding and racing of Thoroughbreds in Kentucky, based on the recent actions of Gov. Paul Patton and state legislators.

Politicians in the state have been falling all over themselves to put together an incentive package in an effort to entice the South Korean automotive manufacturer Hyundai to build a plant in Glendale, a small town an hour's drive south of Louisville. Hyundai, which looked throughout the United States for the best place to build an American plant, had narrowed its search down to two states: Kentucky and Alabama.

As they did 15 years earlier when Toyota conducted a similar search and wound up settling in Georgetown, just north of Lexington, legislators developed a financial incentive package for Hyundai. Its centerpiece was $123 million in bonds the state would sell, with $50 million going to Hyundai as a grant to build the plant, $20 million to buy the land, and $32 million to construct a new interchange off I-65. Other perks were expected, including corporate income
tax credits.

The prize, in addition to helping out a foreign corporation, was to be as many as 2,000 jobs. Quick math says the state was willing to spend $61,500 for each of those jobs.

Alas, Hyundai officials decided to go with Alabama.

It would be nice if those same Kentucky politicians cared as much about the 52,000 jobs--enough to keep 26 auto plants humming--that are directly attributable to the state's horse industry. If they had to find employment for those 52,000 people at a cost of $61,500 each, the legislators would burn through $3.2 billion.

The way things are headed in Kentucky, the number of horse industry jobs is almost certain to be reduced unless the legislature takes action on a bill that would give racetracks an opportunity to install slot machines.

Encroachment by slots and casino wagering in bordering Illinois, Indiana, and West Virginia is draining both money and horses from the Bluegrass State. Though all tracks are feeling the effects, the one hurt the most is Turfway Park, which has more racing dates throughout the year than Churchill Downs, Keeneland, or Ellis Park.

Legislation permitting slot machines at Kentucky's racetracks was introduced but never got to the floor of the House or Senate for a vote. The principal reason for the dead end was the Senate's Republican leadership that opposed the slots bill. The general assembly's regular session has just one day remaining--April 15--when it must pass a budget. There is little to no chance of passing the slots bill on that day, and only a slighter better chance that Patton will call for a special session.

Horse industry proponents have been careful to describe the slots bill as a revenue enhancer for a state that has a $500-million budget deficit. Apparently, an industry that is responsible for a mere 52,000 jobs and has more than a $3.4-billion impact on the state's economy doesn't feel it has enough clout to even ask for help from a government that has benefited immensely from the horse industry's existence in Kentucky.

That's too bad. It is difficult to believe legislators who understand the horse industry and its importance to the state would say no to this bill. But the bigger problem may be that not enough legislators fully understand just how many jobs the horse industry generates and how big a role it plays in the state's economy. (Although most legislators seem to know enough about it to get ahold of Kentucky Derby tickets each year.)

The rush for Kentucky's legislature to embrace a foreign automotive company while showing indifference toward horse owners, breeders, and racetracks with long ties to the state is an insult that should serve as a call to action.

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