With an economic impact pegged at about $3.4 billion, the equine industry has been called the most important in Kentucky. Some legislators would like to keep it healthy--even help it grow--but they've acknowledged they don't have all the answers.On June 18, the Subcommittee on Horse Farming of the Interim Joint Committee on Agriculture and Natural Resources met for the first time to get a sort of state-of-the-state from representatives of the equine industry. The meeting, held in Covington in Northern Kentucky, is the first of several to be held this year in advance of the 2004 legislative session.Representatives from the Thoroughbred, Standardbred, and Quarter Horse industries provided information to legislators, as did the Kentucky Horse Council. In general, they painted a picture of an industry that has lost ground to other states but one with plenty of growth potential. How the legislature will help remains to be seen.David Switzer, executive director of the Kentucky Thoroughbred Association, said the state's breeders' awards program, called the Kentucky Thoroughbred Development Fund, pays about $10 million through purse supplements for Kentucky-breds. He compared the KTDF, funded through a pari-mutuel tax, with the New York breeding program, which pays out about $55 million."(The KTDF) has become stagnant," Switzer said. "We need to try to up the ante on that program."Ken Jackson of Kentuckiana Farm, a Standardbred facility, said Kentucky had 45 stallions in 1982 but now has eight. He cited growth in Delaware, Indiana, and Ontario, Canada, jurisdictions in which racetracks offer alternative forms of gaming. Those jurisdictions have growing mare populations, and Kentuckiana, he said, stands three stallions at a satellite farm in Ontario to benefit from that particular program."Our biggest opportunity is also our biggest challenge: how to deal with competition from other jurisdictions," Jackson said. "We need to make Kentucky attractive so we can keep stallions and mares in Kentucky."Dave Loney, secretary of the Kentucky Quarter Horse Racing Association, said there are 34,000 to 35,000 registered Quarter Horses in Kentucky along with horse shows and riding and educational programs. He said there has been a slight increase in foals the last three years, and that the Quarter Horse business is ripe for more growth."The Quarter Horse is probably the invisible horse," Loney said. "We are all over the place. You see us, but you don't see us."A goal, Loney, said is to have a "limited racing program" with a "good state-bred program" to compliment it. The Kentucky QHRA continues to work with Thoroughbred tracks in the state to hold some live races, perhaps in 2004.Sen. Damon Thayer, co-chair of the new subcommittee, said the meetings wouldn't become forums for discussion on expanded gambling. Hints to that effect, however, were evident during the meeting.It would take tens of millions of dollars to increase purses and breed development programs in the state each year to put them ahead of prize money and breeding programs in other jurisdictions. A proposal to eliminate a 6% tax on stallion fees is in the works for next year, but that plan, though considered a major shot in the arm for breeders, wouldn't generate purse money."How can we expect, with our funding streams and level of population, to compete with (California, Florida, and New York)?" Rep. Charlie Hoffman asked.No one had any answers. Bills to authorize electronic gaming devices at racetracks had no momentum--even in the face of a growing budget deficit--the last two legislative sessions. In 2004, there is expected to be a push for a constitutional amendment to allow voters to decide the issue.In the meantime, Denzil Allen of the Kentucky Horse Council said a new economic impact study is in the works to at least determine the number of horses that live in the state. He also said Kentucky is in a great position to capitalize on trail riding and other recreational uses for horses.The next subcommittee meeting is scheduled for Aug. 21 at the Kentucky State Fair in Louisville.