ALBANY – “I say no new taxes, period,” Gov. Andrew M. Cuomo declared on the day of his inauguration last month, echoing a top promise from his campaign. And after leafing through his first executive budget on Tuesday, lawmakers and others at the Capitol seemed to agree that Mr. Cuomo had indeed kept his pledge.
At horse-racing tracks around the state, however, some people begged to differ.
In his budget, Mr. Cuomo proposes to close the state’s $10 billion budget gap almost entirely through cost-cutting. But he did propose one new fee: a 2.75 percent surcharge on purses at horse races around the state, which would raise $7.6 million for the state next year.
“Talk about blindsided,” said Rick Violette, a trainer who is the president of the New York Thoroughbred Horsemen’s Association. “It really did come from out of left field.”
To Mr. Violette, horse racing should be looked at as an industry just like any other. The New York Racing Association, which operates the Aqueduct, Saratoga and Belmont race tracks (and has teetered on insolvency), says it contributes more than $2 billion annually in the state’s economy. Horse racing is estimated to account for some 35,000 jobs across New York State.
“It just seemed like the mantra going in was that raising taxes and creating new taxes was not good for businesses in New York State,” Mr. Violette, who is a board member for the racing association, said of Mr. Cuomo’s budget. “Yet here a troubled industry right away is really going to pay.”
He was not the only one. “If it looks like a duck, walks like a duck and quacks like a duck, in New York State, it’s a tax,” said Assemblyman James N. Tedisco, a Republican whose district includes Saratoga Springs.
Mr. Tedisco said he hoped Mr. Cuomo would reconsider the surcharge.
“Most of the breeders are not millionaires; they’re small-business people,” he said. “This governor said, ‘If we’re going to keep more people in New York State, we’re going to have to create jobs.’ And this won’t help that.”
The Cuomo administration has a different view. The money generated by the surcharge will go toward the New York State Racing and Wagering Board, which, among other things, provides oversight for horse racing in the state.
The Racing and Wagering Board’s racing division currently operates at a deficit, requiring loans from the state’s general fund. Cuomo officials present the fee on purses as a matter of fairness. The briefing book that lays out the governor’s proposed budget explains that the surcharge will “ensure that the cost for the board’s regulatory activities are fully borne by the racing industry rather than by taxpayers.”
The budget also holds some good news for race tracks that are supported in large part by the casinos they also house. Mr. Cuomo proposed allowing free game credits at video lottery terminals in an effort to induce frequent players to gamble more. That may be little consolation to the people who go to race tracks for the actual horse racing, but the money on the line is significant: the increased video betting is projected to generate $38 million for the state.
Meanwhile, for those keeping score at home, the budget office believes that Mr. Cuomo did, in fact, keep his promise of not creating any new taxes. They consider the horse-racing surcharge to be a fee, not a tax, because it affects such a narrow constituency.
— THOMAS KAPLAN
