by Paul Post
A proposed 2.75% tax on New York racing’s purse structure has been eliminated from the state budget that lawmakers are expected to approve on Wednesday night.
Gov. Andrew Cuomo called for the tax to close a $2-million shortfall in the New York State Racing and Wagering Board’s operating budget.
Horsemen objected, saying the tax would have driven owners, breeders and quality horses from New York and undermined gains anticipated from the opening of Aqueduct’s new gaming facility this summer.
“It would have impacted our horse racing industry,” said state Senator Roy J. McDonald (R-Saratoga), a member of the Senate racing committee.
The budget is broken down into 16 separate categories. The full Senate approved three of these on Tuesday night, but not before taking out the proposed tax.
“That was one of the points of the budget agreement,” McDonald said.
Cuomo, Senate Majority Leader Dean Skelos (R-Rockville Center), and Assembly Speaker Sheldon Silver (D-Manhattan), announced on Sunday night that they had reached conceptual agreement on the budget.
The racing board can make up its shortfall with money from the state’s General Fund or by cutting costs the same as other state agencies, McDonald said. The board has a roughly $14.8 million annual budget.
"We’re very appreciative that the governor’s office and legislature realized that this was not good business for New York state," said Rick Violette, New York Thoroughbred Horsemen’s Association president. "We’ve been in crisis mode for a number of years, because of the franchise uncertainty and not getting slots."
He is also a NYRA board member. NYRA was owed $20-million by NYC OTB before it went into bankruptcy. Sixty percent or $12-million of this was for purses. All of it was lost for good when OTB closed, another big hit to the purse structure.
"This will encourage more people to come back to New York state," Violette said.
Cuomo argued that taxpayers should not have to shoulder racing board costs and that the racing industry itself should bear such expense. The surcharge was one of many proposals he made to close a $10-billion state deficit.
But horsemen said the racing board already gets a half-percent fee assessed to the New York Racing Association for live pari-mutuel handle, and a statewide $10-per-horse start fee. In addition, the state gets a separate pari-mutuel tax from the racing industry.
NYRA purses fell 20% from about $125-million in 2009 to roughly $100-million last year. Imposing a tax would have reduced purses even more, horsemen said. NYRA President Charles Hayward declined comment.