Did Budget Concerns or Politics Kill KHRA Funding?

Kentucky lawmakers differ on the reasons legislation that would have provided stable funding for the Kentucky Horse Racing Authority died at the end of this year’s General Assembly session, and it remains to be seen whether the issue will be addressed again in 2007.

The bill, which had bipartisan support, would have transferred about $5 million a year from the state’s general fund to the KHRA and spared racetracks the cost of equine drug testing. The money would have come from the state’s excise tax on pari-mutuel wagering after statutory deductions for the Kentucky Thoroughbred Development Fund, Kentucky Equine Drug Research Council, and the University of Louisville equine business program.

The bill also would have provided $500,000 to fund purses at The Red Mile, a Lexington harness track, and given Ellis Park, Turfway Park, and The Red Mile a one-day “tax holiday.”

A General Assembly-authorized auditor’s report released earlier this year noted staffing, procedural, and financial deficiencies at the KHRA, and showed it’s well behind other major racing states in regulatory funding for pari-mutuel racing. Now, racetrack license assessments suspended for one year probably will return in July to help support the KHRA.

“The disappointing aspect of this is that the House of Representatives had the opportunity to provide important and significant financial relief for racetracks while answering the auditor’s report,” said Republican Sen. Damon Thayer, who pushed the legislation. “The proposal was essentially killed by Rep. Larry Clark.”

In reponse to Thayer's contention, Clark, a Louisville-area Democrat who regularly sponsors racing-related legislation, said Thayer “never once” spoke to him about legislation related to the Thoroughbred industry during the session that ended March 27. He also noted there were budgetary concerns among legislators.

Clark suggested Thayer, also a regular sponsor of racing-related bills, is under some pressure because he works in the Thoroughbred industry. Thayer is vice president of Breeders’ Cup event management.

“House members felt it would be difficult to fund the racetracks with general fund money when we can’t fund education and human services,” Clark said. “If Sen. Thayer is really interested in helping the Thoroughbred industry, maybe during the next regular session he can work with me on passing casino gambling (legislation).

“He has told me time and time again he cannot support it. I’d appreciate it if you would ask his position on that.”

Racetrack casino gambling, by virtue of a projected hundreds of millions of dollars in annual revenue, is seen as a funding source for the KHRA and other industry programs. Legislation to authorize casino gambling at racetracks wasn’t addressed this year because of the “short session,” officials have said, but it was introduced in 2006. That bill died in the House.

“Rep. Clark is just trying to change the subject,” Thayer said in response to Clark’s question. “There was no support for casino gambling during this year’s session.”

When asked if legislators would work together on expanded gambling legislation in 2008, Thayer said: “A lot can change between now and the next session of the General Assembly.”

Thayer in the past said he isn’t a proponent of expanded gambling but wouldn’t oppose a public vote on a constitutional amendment on the subject. Republican Gov. Ernie Fletcher, up for re-election this fall, has taken the same position.

The 2006 bill offered by the Kentucky Equine Education Project called for casinos only at tracks; it was later amended to include non-track locations. The legislation is said to have had the full support of the racing industry, though there was talk that wasn’t necessarily the case.

The House Licensing and Occupations Committee last year ultimately approved a constitutional amendment on casino gambling that made no mention of racetracks.

In 2004, Clark and retired Democratic Rep. Denver Butler, who also has sponsored racing-related legislation, painted a picture of a racing industry that was self-absorbed and greedy because it wouldn’t support non-track casinos. Legislation to authorize expanded gambling at the tracks died that year as well.

As for the KHRA funding bill, Thayer said he and other legislators would ask Fletcher to consider it during a special session he has proposed for sometime this year to address legislation the House and Senate failed to pass.

“I respectfully ask Rep. Clark to get behind this proposal at the next regular session or special session if the governor puts it on the call,” Thayer said. “Everyone knew what we were working on. This was a missed opportunity.”

The KHRA would get about $1.2 million from the racetrack license assessments should they be reinstated. Thoroughbred tracks pay $3,500 and harness tracks $1,750 each day they offer live racing.

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