Indiana Budget Woes May Impact Racing

by James Platz

Faced with a slumping local economy and notification from state officials that Indiana's growing budget deficit could leave it without money by mid-2003, Gov. Frank O'Bannon on Thursday night outlined a plan to keep the state from going broke.

In a 15-minute televised speech, O'Bannon called for, among other things, an increase in the riverboat casino admissions tax, as well as a reduction in the subsidy given to the horse racing industry in an effort to manage the state's $20.7-billion budget.

"We will make ongoing use of the tobacco settlement funds and gaming revenues, including the Build Indiana Fund, for health and general operating expenses," O'Bannon stated in his speech. "Our plan also calls for the cigarette tax to be increased by 50 cents a pack. And it calls for the gaming admissions tax to be increased two dollars. This is a workable, responsible and equitable plan that will balance the state budget heading into the next biennium."

Under O'Bannon's plan, the increase in riverboat admissions tax, from $3 to $5, would generate $84 million. The governor also calls for a $10-million reduction in the $26 million currently allotted to the horse racing industry. A proposal that called for an increase in casino taxes in exchange for allowing dockside gambling was rejected earlier this year.

If lawmakers pass O'Bannon's proposals, it could once again shake up Indiana's horse racing industry. Hoosier Park, already facing the prospect of a second track in Shelbyville next year, requested 120 racing days, 73 days less than 2001. The Anderson facility currently receives $6.8 million in admissions tax revenue each year.

Beginning in 2002, Hoosier Park is scheduled to split 40% of the revenue, either based proportionally on purses generated or on a 50-50 schedule, with new permit-holder Indianapolis Downs.