Blinkers On: Wolf Administration & Horse Racing Industry Not Seeing Eye To Eye

Posted on March 9, 2020 - Last Updated on March 10, 2020

Gov. Tom Wolf‘s administration and the Pennsylvania equine industry seem to be running an oval track in opposite directions when discussing a new scholarship proposal.

The administration’s plan to aid 25,000 students in state universities through a trust fund designated by law for the horse business has been met with a wide range of response, from complete support to stanch criticism.

Wolf is beating the drum for audiences of students and parents talking about college affordability. The pony people are meanwhile marshaling those in the industry and their political allies and citing economic impact and open space.

Neither side is doing much to address each other directly, it would seem.

Wolf talks about ‘repurposing’ horse money

The governor’s proposal, announced Feb. 4, would remove $204 million annually from the state’s Race Horse Development Trust Fund, a trust he signed into law in 2017.

And while it is a trust, it can be broken by the legislature, according to a legal scholar. The political viability of building enough bi-partisan support to overturn the law is a whole other issue, though. And likely dampening legislative support, there is a payback clause in the law which could mean the state would need to ante up about $380 million in funds diverted from the fund before Wolf signed off on making it a trust.

Protracted legal wrangling seems inevitable if  legislation overturning the trust ever gets that far.

The pony money allocation originally came in 2004 as part of legislation for casinos in the Keystone State. The money gave the horse industry about a 10% cut of slot machine revenue to compensate tracks for gambling money they expected to lose as a result of new competition from gambling halls.

The new Nellie Bly Scholarship program for in-state students

Wolf has said as many as 25,000 scholarships annually would go to students attending 14 Pennsylvania universities. The schools are Bloomsburg, California, Cheyney, Clarion, East Stroudsburg, Edinboro, Indiana, Kutztown, Lock Haven, Mansfield, Millersville, Shippensburg, Slippery Rock, and West Chester. Collectively they are known as PASHEE, the PA State System of Higher Education.

The governor is making the rounds of those institutions and also high schools, touting his proposed Nellie Bly Scholarship Program.

Oddly, a Nellie Bly Scholarship already exists at Indiana University of Pennsylvania, which is the successor to the school which Bly, a feminist journalist, attended before dropping out due to family finances. Ironically, she became world-famous and accomplished without ever finishing college.

Officials at Indiana and PASHEE were unable last week to answer whether they were consulted by the Wolf administration about appropriating the name of an existing scholarship program.

Time to bet on students?

One of the key stipulations of the scholarship money would be for recipients to remain in PA following graduation for as many years as they received financial support.

Wolf has repeatedly stressed the plan should reduce college debt in his visits. He has generally avoided discussion of the funding for his program during those appearances.

But supporting press releases make the case that with a history of $3 billion in support for the horse business, it is time to bet on students and not horses.

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Ag Secretary Redding is the public face for raiding the trust fund

Publicly, the administration’s de facto lance carrier is Agriculture Secretary Russell Redding, who also holds the title of chairman of the State Horse Racing Commission.

The Ag Department and the commission together oversee horse racing – and the trust fund. With Redding not voting, the rest of the commission last month solidly opposed the administration’s plan. Redding did not express personal sentiments during that commission meeting.

However, Redding told a reporter for PlayPennsylania after that commission meeting that he had never directly been consulted regarded the plan to repurpose the horse funds.

Since then, the secretary has had several op-eds under his name published in newspapers near Wolfe’s tour sites in support of the governor’s plan to redirect the funds.

Redding’s claim about a purse doesn’t add up

A recent one in the Pocono Record followed the theme that racing is a rich man’s game, and it is time for the industry to wean itself from state-sanctioned welfare support.

However, the top of the Redding op-ed erroneously states: “The size of a purse won by a single jockey last year at Parx in Bensalem: $5 million.”

Redding’s assertion about the size of the purse is mistaken. The statement also exhibits a misunderstanding of how pieces of a race purse are allocated.

While Redding’s assertion cites no source, the top purse annually at Parx, which consists of both a casino and a thoroughbred track outside Philadelphia, is $1 million for the Pennsylvania Derby.

The event is a nationally televised race and serves as a feeder to the prestigious Breeder’s Cup.

How much do horse jockeys actually make?

On a winning $1 million purse, a jockey and his agent would get $60,000 in winnings, a far cry from the $5 million “purse won by a single jockey,” as stated in the editorial bearing Redding’s name.

Typically, the owner of the winning horse gets 60% of the total purse for the race, and the jockey gets 10% of that. Beyond that, jockeys pay out their agents at least 10%, which means somewhere in the ballpark of $54,000 for the jockey.

But the jockey’s take is even less than that. Riders must pay their valet and also make a mandatory payment to an aftercare program for retired horses. That means the jockey’s take-home on the top race in Pennsylvania was around $43,500. Riders typically make just $40,000 annually.

Redding has also had to recently address questions from legislators during budget hearings for his department. Several times he admitted that details remain incomplete when asked about how the plan could impact the industry.

Lots of questions, some answers from the administration

PlayPennsylvania posed ten questions to the Wolf administration. Rather than explicitly answering many of the questions, his spokeswoman provided a statement:

“Necessary legislation will be worked on throughout the budget process. The plan was developed in consultation with higher education officials, and the Department of Agriculture and discussions with the industry have taken place.

“In addition to the $204 million for the Nellie Bly Scholarship Program, the governor’s budget includes more money than has ever been proposed for the PASSHE schools with $12.9 million to support PASSHE’s system redesign and a $60 million increase for the Pennsylvania State Grant Program…

“The governor has proposed and continues to supporting giving money to the industry for advertising, about $2.3 million annually. Considering that the PA Tourism fund, the fund that was created to promote the entire state has $3.6 million, this level of support is unprecedented.

“The horse racing industry has, and will continue to benefit from other programs such as the Clean and Green preferential tax treatment program, the Pennsylvania Agricultural Conservation Easement Purchase Program, and benefits from the investments made in the University of Pennsylvania School of Veterinary Medicine and race venues across the Commonwealth.”

Effect on equine economic impact left unanswered

Some questions that were left unanswered include:

  • if any legislator had stepped forward to sponsor legislation
  • whether any Republicans have voiced support for the funding proposal, which would need bipartisan support to pass
  • if the appropriation of the Bly name came before the announcement

Also unanswered was a question about a report signed by Redding in 2018 applauding the equine industry as the second most crucial factor in the health of the state’s agricultural economy along with a question regarding how this proposal might affect that standing.

The report spotlighted racing in glowing terms on page 27, under “The Equine Sector and Horse Racing in Pennsylvania:”

The equine sector is the second largest animal agricultural industry in Pennsylvania. The sector supports more than 20,000 jobs across the state.

A 2017 study by Delaware Valley University found that the equine industry has a $670 million economic impact on the 10-county Southeastern Pennsylvania region. The region’s equine industry generates more than $58 million in tax revenues for the Commonwealth. The sector also has experienced significant growth in recent years.

Survival of horse racing industry depends on equine sector

There are currently more than 50,000 equines in the region, an increase of 9.3 percent over the past 5 years. Further, the 10-county region represented just 36 percent of Pennsylvania’s equine population and 32 percent of equine farms, indicating that the impact of the equine industry statewide is significantly greater.

The equine sector is the foundation of the horse racing industry, another major economic driver in the state. Pennsylvania’s equine sector supports horse racing through the production and care of racehorses.

In addition to the production, care, and transportation of thoroughbreds and standardbreds, racetrack operations support more than 1,300 employees statewide, with total annual earnings of $38.8 million.

Previously, a spokesman for Wolf responded to questions from PlayPennsylvania about the trust fund and the payback provision by saying the State Legislature will need to address those issues.

Pony people circle the wagons

The horse folks have circled the wagons by issuing press releases through their various organization like the Pennsylvania Horse Racing Association. They are also making use of social media websites to get their message out.

They additionally are rounding up politicians opposed to the plan, which are many. In addition to a host of Republicans, some are Democrats in an area with many horse farms such as Christine Sappey, a state Representative from Chester County.

Pete Peterson, who leads the Equine Coalition, told PlayPennsylvania members of the horse community invited Wolf to tour farms. So far, he says, they have had no takers from the administration.

He also said he is unaware of any direct conversations taking place between the industry and the administration.

Kevin Shelly Avatar
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Kevin Shelly

Kevin C. Shelly is an award-winning career journalist who has spent most of his career in South Jersey. He's the former assistant city editor of The Press of Atlantic City, where he covered the casino industry and Atlantic City government as a reporter. He was also an investigative, narrative enterprise, and features reporter for Gannett’s Courier-Post.

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