Implementation of Kentucky Breeders' Incentive Program Discussed

What to do with an estimated $12 million in Kentucky Breeders' Incentives money was the topic of discussion during a May 18 meeting of Central Kentucky breeders at Fasig-Tipton Kentucky's Newtown Paddocks near Lexington.

The discussion quickly centered on one issue: should breeders of Kentucky-bred horses racing outside of the state receive any form of incentive money or should the money remain in the state and be restricted to Kentucky-bred horses winning at only in-state tracks.

Catherine Parke, owner of Valkyre Stud near Georgetown, Ky., was in favor of rewarding breeders for horses winning outside Kentucky. Citing a 2003 study by The Jockey Club that was commissioned by the Kentucky Thoroughbred Association showing 17.8% of Kentucky-bred horses break their maidens in the state, Parke said the majority of clients who board mares at her farm live outside of Kentucky and chose to race their horses at racetracks closer to their homes.

Parke suggested awarding breeders of maiden winners, either maiden special weight or maiden claiming, anywhere in the United States or those countries accepted by the international cataloguing committee with an award based on a percentage of the purse.

In addition, Parke's suggestion calls for awarding breeders who breed the winner of any stakes race at a Kentucky racetrack or winning any graded or group race in the nation or world. Those checks could be based on a percentage of the purse or a flat amount.

"To exclude our international breeders who contribute hundreds of millions of dollars in Kentucky to farms and workforce would be a big mistake," Parke said.

Agreeing with Parke was Ric Waldman, advisor for Overbrook Farm near Lexington, which stands Storm Cat, who commands a $500,000 stud fee.

"I want to underscore that it is very important that we do not exclude anyone who pays sales tax on stallion fees when distributing this fund," Waldman said. "Every time someone breeds to Storm Cat the state receives $30,000 in sales tax. Very few people that breed to Kentucky stallions live and race in Kentucky. Let's not give the wrong message to these vital clients that they are not important. We need to cultivate more business and attract more out-of-state mares to board on Kentucky farms."

On the other side of the coin was Tim Thornton, general manager of Airdrie Stud near Midway, Ky. who believes the money should be used to reward the breeders of Kentucky-bred horses winning only at Kentucky racetracks.

"What I want right now is a state program," Thornton said. "You have to walk before you can run. The breeders' rewards program was set up to help the breeders. There are a bunch of small farms that just aren't making it right now. Right now we need to promote Kentucky."

Kentucky Sen. Damon Thayer, who sponsored the legislation that resulted in the incentive fund, said after listening to the discussions, "I see tonight why I didn't attempt to regulate how the funds were dispersed," he said. "I've seen all sorts of proposals. It was my intent that this program has more than a Kentucky feel. Everybody that pays the sales tax should fell a part of this fund."

Thayer said he was proud of the new incentive fund, but added if could do it all over he would add a line saying, "the money could not be restricted to just Kentucky racing."

The breeders' incentive fund will be funded from the existing 6% sales tax on stud fees, generating about $15 million a year. That money currently goes to the state's general fund.

The Kentucky Thoroughbred Breeders' Incentive Fund would get 80%, the Kentucky Standardbred Breeders' Incentive Fund 13%, and the Kentucky Breeders' Incentive Fund 7%. Based on typical tax receipts, the Thoroughbred fund could be worth about $12 million.

Money for the programs would accrue July 1, the start of the fiscal year. Awards would be paid effective Jan. 1, 2006, with the Kentucky Horse Racing Authority charged with implementing the funds.