New Jersey Horse Racing Subsidy Bill Advances Again, But Is It Home-Free Yet?

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On the surface, this looks like good news for New Jersey’s horse racing community. A $20 million annual purse subsidy bill cleared another hurdle in Trenton on Monday, and that could set the stage for a fully approved bill to head to Gov. Phil Murphy’s desk by the end of the week.

But there were issues worth noting in the unanimous passage of the bill by the state Assembly Appropriations Committee in Trenton.

Where’s the money coming from?

One issue was the bill’s first pushback on its journey, which came from Democratic Assemblyman Gary Schaer.

Schaer laid out the breakdown of the scheduled $20 million for each of the next five years (see below), which includes millions for the Meadowlands Racetrack, part of a district that Schaer has represented since 2006. Then he addressed Assembly Committee Chairman John Burzichelli.

“Mr. Chairman, your sponsorship of this bill makes it doubly more difficult for me to say this,” Schaer said (full audio available here). “But I think that at some point we have got to say that we simply don’t have the money to do all the things that we want to do.

“This is not something I can support on the floor of the Assembly [for a full vote], though I do of course vote to release” the bill for that vote.

That’s not an idle comment from Schaer, who was Budget Committee chairman for more than a decade. He knows very well about competing agendas, and how something always has to give somewhere with a strained budget and with a disastrous state employee pension shortfall.

State legislators tend to be deferential to the votes of lawmakers whose districts would be most impacted by a bill. A more distant legislator might wonder, if even Schaer won’t vote for money for the Meadowlands track, why should they?

A bill-saving compromise?

If legislators are having second thoughts, that’s where one of the amendments, directed by Assembly Speaker Craig Coughlin, may prove more advantageous than horsemen might think at first.

The language change directs that an annual report about the subsidy be filed to the Legislature, the Governor’s office, and the racing commission, and that the Legislature may not elect to approve the full $20 million, or perhaps anything at all, “if receipt of these funds has not substantially improved the racing industry of New Jersey.”

While horsemen likely will feel as if they are “on trial” every year by this directive, the truth is that appropriations such as these have to be reapproved annually anyway.

And now a potentially wavering Assembly member can be told that passage of this bill does not lock state taxpayers into paying $100 mm to the industry over a span of five years. If there’s little to no sign of tangible benefits to the industry each year, the money might just go away. Trial by fire, basically.

“[Coughlin] wanted metrics on, ‘Is it working how we wanted it to work?'” Burzichelli said. “Who knows what happens in Year 2, because there are a lot of outside forces and demands on our state budget. Hopefully the industry performs well.”

Undoing the damage

Burzichelli reminded his fellow committee members that former Gov. Chris Christie, in his first year in office, took the state out of the horse racing business while also calling for an end to what had been a $30 million annual purse subsidy  from the state’s once-thriving Atlantic City casino industry. That deal had included guarantees that racetracks would not be permitted to feature slot machines as is the case in New York, Pennsylvania, and many other states.

“As we struggle to figure out how to make things better,” Burzichelli added, “this industry has been starved over the previous eight years prior to the new [Murphy] administration.

“We are playing catch-up as we watched neighboring states steal a lot of the benefits that this industry brings. When casinos were approved in New York and Pennsylvania, there were automatic revenues devoted to underpinning the horse racing industry. New Jersey missed that opportunity as our casino industry was in its infancy [four decades ago].”

One appeal noted by Burzichelli was farmland preservation, an overwhelmingly popular goal in the nation’s most densely populated state, with survival of the horse racing industry directly connected to that issue.

The fine print

The $20 million annual subsidy would break down this way:

  • $10 mm to Monmouth Park purses
  • $6 mm to Meadowlands purses
  • $1.6 mm to Freehold Raceway purses
  • $1.2 mm to New Jersey Sire Stakes purses
  • $600,000 each for purse subsidies for New Jersey-sired horses and for breeders award purses

The state Senate’s version of the bill passed by a 40-0 vote last month, but Meadowlands track owner Jeff Gural said last week that “we are screwed” unless the bill also passes the Assembly quickly.

There is a full voting session of the Assembly on tap on Thursday afternoon and — good news for the horsemen — as of Monday night, this purse subsidy bill has been added to the list of dozens already on the agenda.

And if the amendments are substantial enough to require another vote in the state Senate, well, the Senate, too, has dozens of bills it will look at on Thursday afternoon, too.

Photo by Mikhail Pogosov / Shutterstock.com

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John Brennan

John Brennan has covered NJ and NY sports business and gaming since 2002 and was a Pulitzer Prize Finalist in 2008, while reporting for The Bergen County Record.

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