Kentucky Racing Authority's Operating Budget Cut

The 2007-08 operating budget for the Kentucky Horse Racing Authority will be a little lighter after 40% of its funding was removed by the state General Assembly.

Speaking during an April 17 KHRA meeting, La Juana Wilcher, Environmental and Public Protection Secretary, which oversees the authority, said the loss of funds would leave the authority scrambling on how to pay for its programs, such as staffing the new breeders' incentive fund and tighter medication policies.

The loss of funding comes after the legislature opted to withdraw a daily operating assessment paid by racetracks to the KHRA based on the number of live race days. Under the current structure, Thoroughbred tracks pay $3,500 per live racing day, and Standardbred and Quarter Horse tracks $1,750. The KHRA will collect about $1.2 million in fee assessments from state racetracks in the 2006 fiscal year, which ends June 30. The fees will not be collected beginning July 1.

For instance, Turfway Park, which just concluded a 69-day meet, would have retained $241,000 if the assessments were not in place. The Red Mile, a Lexington harness track, would retain more than $70,000 during a typical meet.

According to Sen. Damon Thayer (R-Georgetown), the racetrack assessment was withdrawn after state auditor Crit Luallen found the KHRA has dubious statutory authority to levy assessments against racetracks.

The authority's operating budget currently is about $3 million drawn from three sources. In addition to the $1.2 million in fees paid by racetracks, the KHRA also receives about $1.3 million from licensing and other fees, and $500,000 from the state General Fund.

The 2006-08 state budget prohibits the authority from levying assessment fees to tracks. That money will be replaced with an additional $1.2 million from the General Fund.

The second year of the budget doesn't have that $1.2 million for the authority, leaving it with only $500,000 from the General Fund.

In addition, the General Assembly agreed to fund an audit of the KHRA to determine how its funds are spent. The audit is due to be complete by the end of the year.

Thayer said the General Assembly is due to return for a 30-day session in January and could reconsider additional funding for the KHRA.

"I can tell you that the legislature does not intend to leave the racing authority without the proper funding," Thayer said. "We are not going to let that second year of the budget go under funded."