Ray Paulick<br>Editor-in-Chief

Ray Paulick

The $12-Million Question

One of the early successes of the Kentucky Equine Education Project was legislation to divert a state tax on stud fees into an incentive program for Kentucky horse breeders. The new law, signed by Gov. Ernie Fletcher in March, puts an estimated $12 million annually into the fund for Thoroughbred breeders, which is scheduled to begin distribution in 2006. Another $4 million will go into incentive programs for other breeds.

It is up to leaders within Kentucky's Thoroughbred industry to devise a program to distribute money for its incentive program, and an industry-imposed deadline of July 1 to finish the job is fast approaching.

Two public meetings have been held to shed light on the subject. The first, a town hall-style gathering organized by KEEP, gave breeders an opportunity to voice their opinions on how they think the funds should be distributed. A second meeting, conducted by the Kentucky Thoroughbred Farm Managers' Club, provided some elementary information on what the incentive program could mean to the individual breeder of one of Kentucky's approximately 9,000 annual foals.

But now the rubber hits the road. The issue is in the hands of a committee representing the Kentucky Thoroughbred Association/ Kentucky Thoroughbred Owners and Breeders, the farm managers' club, and KEEP. The KTA/KTOB will be represented by Ric Waldman, Craig Bandoroff, and John Greely IV; the farm managers by Ken Wilkins, Steve Johnson, and Edward Roggekamp IV; and KEEP by Brereton Jones, David Blee, and Dan Kenny. The first meeting was to take place June 23.

A primary point of contention has been the question of whether breeder awards should be distributed for racing performances in Kentucky only or in jurisdictions throughout the United States and the world.

The KTA/KTOB position has been that the awards should be distributed as widely as possible and not be limited to the breeders of Kentucky-breds racing only in the Bluegrass State. Advocates of this position point out breeders from around the world help build the fund through the sales taxes they pay on stud fees and therefore should be eligible for awards.

The farm managers' club, which traditionally steers clear of political issues, polled its members and found only 12% supported a program restricting breeder awards to Kentucky races. Just over one-third, 37%, supported breeder awards for all North American racing, while 51% want the awards to be distributed for worldwide racing.

Ken Wilkins, president of the KTFMC, said the poll results will shape his organization's position.

KEEP has yet to take an official position on the incentive program, but its chairman, former Gov. Brereton Jones, a Democrat, has expressed a personal belief that the awards should be restricted to Kentucky racing. Supporters of this program have warned that Kentucky legislators who approved incentive fund may not want to see money crossing the state line or, even worse, international borders.

But that isn't a concern to the bill's sponsor, Republican Sen. Damon Thayer, who also serves as an executive at the Breeders' Cup. If he could do it over, Thayer said, he would have added a line to the bill saying "the money could not be restricted to just Kentucky racing."

This issue is a potentially divisive one for a Kentucky horse industry that, thanks to Jones and the late John Gaines, has gotten its act together politically only in the last year through the formation of KEEP. The organization's mission, and its ability to unite and mobilize an industry that had been politically adrift, is far more important than figuring out how to distribute $12 million. Bigger issues lie ahead and unity will be needed.