New York Lawmakers Reject Purse Surcharge

The decision came in a last-minute round of state budget talks.

A proposed 2.75% state surcharge on purses on New York races was rejected by lawmakers in a last-minute round of state budget talks at the Capitol in Albany.

The Senate and Assembly could not agree on any elements of a broader racing industry plan. With the clock ticking March 29 on a final state budget adoption possibly in the next 24 hours or so, lawmakers said they rejected the surcharge plan proposed by Gov. Andrew M. Cuomo as part of his 2011 budget.

The purse hike's proceeds – valued at between $6 million to $7.6 million in the coming year – were to have gone to help fund operations at the state Racing and Wagering Board. It is still uncertain how the lost revenues would be made up, though one plan kicking around is to partially make up the difference by cutting $2.5 million from the racing board's budget.

The Assembly wanted to kill the surcharge and replace it with a surcharge on racino operators. Senate negotiators proposed a broader fee on all racetracks.

But the Senate also wanted to eliminate some statutory fees paid by OTB operators and to let a private entity bid on the remnants of the now-closed New York City Off-Track Betting Corp. The Senate also wanted to give some assistance to the Suffolk County Regional OTB, which recently filed for Chapter 9 bankruptcy protection.

Assemblyman Gary Pretlow, a Democrat who chairs the Assembly racing committee, noted the Suffolk push by the Senate came just a few months after a Chapter 9 reorganization bill to keep NYCOTB alive died in the Senate chamber.

“The Senate was totally responsible for the destruction of New York City OTB, and now they want to help their own OTB,’’ Pretlow said of the Suffolk provisions sought by the Senate.

Pretlow said officials told him the evening of March 29 that the 2.75% purse surcharge idea was dead.

"I think the governor shouldn’t have proposed the fee in the first place because it caused a lot of turmoil in the industry. If the intent was to shift monies for the Racing and Wagering Board, it should have been more broad-based in the industry,’’ he added.

Senate racing committee chairman John Bonacic said he never had discussions with the Assembly about any sort of Suffolk OTB provisions, but he did try to get a bidding process started for the shuttered NYCOTB. "We looked at this as an opportunity to make structural changes. I keep getting resistence from the Assembly, so I assume they want the status quo,'' he said.

The senator said the state racing board will have to see operating cuts to make up for part of the elimination of the purse surcharge plan. "We said no new taxes. We meant it,'' Bonacic said of the purse hike defeat.