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TRANSCRIPT
HOUSE APPROPRIATIONS COMMITIEE HEARING Wednesday, March 7, 2012
Testimony of James Simpson, President & CEO, Hanover Shoe Farms
Thank you Chairman Adolph and Chairman Markosek for allowing us to provide testimony today
regarding the proposed cuts to the Race Horse Development Fund as outlined in the Governor's budget.
My name is Jim Simpson and I am the president and CEO of Hanover Shoe Farms. I also serve as the
Treasurer for the Standardbred Breeders Association of Pennsylva nia (SBAP) . As many of you may
know, Hanover Shoe Farms proudly holds the title as the world's largest Standardbred breeding farm in
the world. Each year we produce some 400 plus yearlings that are taken to auction at the Horse Sale at
the Farm Show.
Hanover Shoe Farms provides 90 people and their families with meaningful work, farm-owned homes,
health care, and 401k plans. We take care of 1057 world-class racehorses. The cost to maintain the
farm, the land, and the horses has been estimated at approximately $21,000 per day or $7 million per
year. In addition, Hanover's purchases from local vendors have doubled since 2005.
Probably the most frequent quote in the media from legislato rs is that Pennsylvania horse farms
preserve green space. Hanover Shoe Farms maintains 3000 acres of prime Pennsylvania farm land.
Farms like ours are one of the Commonwealth's last assets holding back the suburban sprawl of strip
malls.
Like other PA breeding farms, Hanover has made big investments in Pennsylvania based upon the
promises of slots legislation. What will happen to those investments if Pennsylvania's promises are not
honored? How willi justify additional investments in Pennsylvania agriculture?
Afte r Pennsylvania passed slots legislation, many new farms were established by out-of-state investors.
Existing Pennsylvania farms expanded some by 50%. Why? Because investors trusted Pennsylvania's
comm itment through slots legislation to support a competitive horse racing and breeding industry.
For horsemen, the issues are promises and trust in a partnership with government that makes long-term
private investment in Pennsylvania possible. Like other businessmen, investors in the horse racing
industry need to know t hat today's agreement is tomorrow's commitment. Breeding, raising, se lling,
training, and racing equine athletes require large capital investments. I've attached a document entit led
"Hanover Farm Facts" that outlines our local economic commitment.
The PA Race Horse Development Fund is already in the later stages of a four year reduction in funding
from the previous administration. Now, the Department of Agriculture and the Corbett administration
propose to divert another $72,000,000 from the Race Horse Development Fund in 2012 to support other
agricultural initiatives. Outside the racetrack, everything IS agriculture.
Through gaming legislation, Pennsylvania announced to the horse racing world that our state was open
for new business, and was committed to sustaining a viable equine racing and breeding industry. The
horse racing industry responded, raising the bar by investing in quality horses, quality racing, new
breeding farms, and new training facilities. It is an expensive game, but the rewards for Pennsylvania
are real and sustainable.
So, is it really just about the money? Well, yes - but it's much more complicated than that.
Horseracing is about the prize. For us, healthy purses at the track provide an incentive for people to buy
our horses, which we see as a Pennsylvania product.
We also benefit from a Breeders Award program established under Act 71. While the award program is vital to the operation of the farm, it does by no means pay our bills. In fact, since 2007 Hanover has had bigger declines in revenue from the sale of yearlings than Breeders Awards can compensate.
In Harrisburg, the current debate is about who gets what, who survives, and how government agencies
pay their bills. In difficult times, promises are often set aside, and the focus is only on short-term
survival.
Our request to you today is to take a look at the long-term consequences and take into consideration
the livelihoods of the people who will be impacted by a healthy horseracing industry.
Again, we thank you for your time today and we would be happy to answer any of your questions.
2310 Hanover Pike • Hanover, PA 17331 • (717) 637-8931 • hanoverpa.com
FARM FACTS 2,700 Acres
280+ miles of fence
167 Buildings:
4.6 Tenant houses, all used by employees
121 Barns, sheds and various OUler storage and out buildings
26,000 gallons of heating oil annually
7.5 employees
35 trucks: foreman usc, horse transportation, etc.
17 tractors
9,500 gallons of diesel, on and off road
30,000 gallons of gas
6-15' Batwing mowers Lhat run 8-1 0 hours per day (May-September)
1,500 tons of straw bought in 2009
• 950 tons or about 47,000 small bales • 550 tons or 2,700 3'x6' large bales
1,350 tons of hal' bought in 2009
• 825 tons or about 27,000 small bales • 525 tons or 1,750 3'x6' large bales
1,650 tons of pelletized feed
235 tractor trailer loads of manure
• Shipped to Laurel Valley Farms, mushroom growers
./ 418 Mares scheduled to foal in 2010
./ 437 Mares booked to be bred in 2010
./ 333 Yearlings for 2010 sales (Foals of 2009)
./ 106 Retired Mares
./ I I Stallions in Pennsylvania, 2 in New Jerse)'
2310 Hanover Pike • Hanover, PA 17331 • (717) 637-8931 • hanoverpa.com
• Pa. Hal1less Jlorsemen's Association · Pa. Thoroughbred Horsemen's Association . Standnrdbred Breeders Associntion orPa .• Pa. Horse Breeders Associat ion
f',·feadows Stnndardbred Owners Associat ion· Horsemen's Benevolent & Protect ive Association
Thank you, Chairman Adolph and members of the committee, for providing members of the equine industry with this opportunity. My name is Salvatore DeBunda and [ am a thoroughbred owner and Breeder in Pennsylvania. I am also President of the Pe1ll1sylvania Thoroughbred Horseman's Association, which represents trainers and owners at Parx Racing in Bensalem and a member of the Pennsylvania Equine Coalition which represents more than 10,000 owners, breeders, and trainers in the Conunonwealth.
Before I get into the impact of these proposed cuts, I want to address two major misconceptions that I have heard repeated over and over again. First is the claim by the Secretary of Agriculture and others that the Race Horse Development Fund is seeing some sort of windfall, that the roughly $5 million currently going into the Fund per week far outpaces what was envisioned by the legislature when it adopted Act 71, the Race Horse Development and Gaming Act.
I calUlot emphasize enough that is not true. In fact, models developed at the time projected the Race Horse Development Fund would have receipts per week of between $4.4 million at its low point and $6.2 million at its peak. During the last nine weeks, contributions to the Fund have averaged $4.5 Mi llion per week, down from an average of $5 Million per week that the Secretary of Agriculture referred to. This is at the very bottom of the estimated receipts and hardly the windfall some have claimed.
To put this into further perspective, consider that the Governor's proposed $72 million cut to the fund next fiscal year, combined with the platUled diversion of an additional $49 million to the general fund , would leave weekly receipts to the nmd for the purposes of the equine industry at just $3 .2 million per week. That is nearly half of what the nll1d was projected to reach at its peak and more than 30 percent below what the nll1d was projected to reach at its low point.
I would like to make two final comments on the size of the Fund. First, the current $4.5 million average of weekly contributions to the Fund would equal about $234 million annually for the 6 racetracks in the Commonwealth plus its s ignificant breeding programs, an average of less than $40 Mi llion per racetrack an nua ll y. Both West Virginia and Delaware cont ribute about $50 million per year to each of their two racetracks and neither of those states have a significant breeding program or a health and pension plan ---- most of the nll1d goes to owners, not breeders 01' for health care or pensions for backstretch employees.
Secondly, the repol1ed increase in gaming revenues in recent years does not mean that the Race Horse Development Fund necessarily increases. In fact, while overall slots revenue could increase, the RHDF could decrease! As mentioned earlier, the Horsemen's share of slots revenues is based on slot revenues ONL Y at their home track, not slot revenues at all the gaming facilities throughout the State. Contributions to the Fund can be negatively impacted from internal competition froln other ganling options like table games or poker within its own racetrack facility and from nearby gaming facilities. We believe that is a likely scenario when the Valley Forge Casino opens, when the second casino in Philadelphia opens, and when Cleveland opens their casino. Tins is why the Governor's projection of increasing contributions to the Fund is not realistic.
I have also heard many people claim that this is public tnoney. In my view, that is also inaccurate. Rather, the Race Horse Development Fund is a "compact" that was made among all of the stakeholders at the thne of the passage of Act 71, namely, the Governor's office, the State Legislature, the race track operatol's, the horselnen, the breeders and the jockeys. An agreement was reached for a sharing of funds from the slots revenues and also for cOlnmitments by the operators to support racing and upgrade its facilities. Purse Inonies derived froln slot revenues were never intended as 'public monies.' The state received 34% of gross terminal revenue as part of this "cotnpact." Taking these additional funds would result in an increased tax on the proceeds.
The revenue sharing arrangement - and the placement of these funds into the Race Horse Developl11ent Fund for distribution to breeders and purses - was negotiated and agreed upon by track operators, horsemen, breeders and jockeys and legislated only as a fonn of assurance fol' both parties to protect the sanctity of the fund and assure track operators of their maximum commitnlent.
In my view, raiding this fund now for other purposes represents a special tax action of catastrophic proportions that is totally contrary to the original legislative intent and the compact between the legislature, executive branch, track operators, horsemen, breeders, and jockeys.
Prior to Act 71, Pennsylvania saw an exodus of owners, breeders, trainers, and others involved in the industry to other states. At the time, other states - such as Delaware and West Virginia -provided a much better return on investlnent. Act 71 changed that, and we received a double benefit, bringing people back to Pennsylvania who had left and encouraging a new wave of investment in the equine industry in Pennsylvania.
Act 71 was working. It was revitalizing the racing and breeding industry, spul1'ing new investment in Peoosylvania, creating jobs, and providing an econonlic boost to other segments of the agriculture industry in the state that provide goods and selvices to the racing and breeding industry.
In a 2010 presentation, Agriculture Secretary Russell Redding identified some of these successes, including the creation of 27,000 new jobs in the equine industry through 2008. Thanks to Act 71, the Pennsylvania equine industry -including both racing and breeding -- now account for more than 40,000 jobs in the state with a total economic impact of$490 tnillion. And every $1 in direct spending in the racing industry equates to $2.13 in the larger Pennsylvania economy.
2
Thanks to the breeding incentives, we have seen nlillions of dollars invested in new or refurbished breeding farms. The foal crop has increased lnOl'e than 20 percent in Pennsylvania since the introduction of slots. And the Pemlsylvania's horse breeding industry preserves 500,000 acres of pasture and agricultural land
The proposed $72 nlillion transfer is not "Ag helping Ag." It is ca1U1ibalizing one seglnent of the agriculture budget to fund other agriculture programs that were previously funded out of the general fund.
For a budget proposal that was in large Ineasure about creating jobs, this proposal will do the opposite within the agricultural cOlrununity. If racing is 110 longer profitable in P A, those jobs and hundreds of millions of dollars in investlnent will simply flow out of P A and into neighboring states, whose racing funds are intact 01' increasing, robbing PA of the benefits. Each hOl'se that is bred, lives or races in the Conunonwealth is a jobs creator but these jobs creators, unlike factories, can be put on a van and becollle a job creator in another jul'isdiction within less than 24 hours. The Commonwealth needs to become a destination for these jobs creators! Indeed, the Equine Coalition projects these cuts will result in the loss of between 10,000 and 15,000 jobs in Pennsylvania.
The trickle-down effect will be huge. Owners, trainers, breeders and the tracks themselves purchase propelty and equiplnent in PA and create local jobs. The people they purchase from and employ do the sanle, and so on, and so on.
In closing, owners, trainers and breeders have invested millions of dollars in PelUlSylvania with the legislative pronlise that horse racing would provide sOlne return on their investJnent. Significant cuts will kill the growth of this still emerging industry that helps fund the economic itnpact of agriculture, the number one industry in the COlrunonwealth.
Now is not the thne to do long-term and ill'eparable harm to a vital industry for the sake of shOl'tterm benefits. The devastating inlpact on Pennsylvania's econOlny and jobs simply do not justify the executive branch or legislature violating their compact with businesses that t11ake up and rely upon the Commonwealth's equine industry.
3
Testimony of
Todd Mostoller
Executive Director PA HBPA
March 7, 2012
House Appropriations
Executive Summary - Act 71 impact on Equine Industry in the Commonwealth > Act 71 created a viable business model resulting in millions being invested in the equine
i nfrastructu re.
o Farms Purchased
o Stallions and mares purchased
o Race horses purchased
o Farmers changed crop production
~ Pennsylvania Race Horse Development Fund(PRHDF)
o Fund created by Act 71
o 2012-13 Executive Budget misconceptions
• Additional casino's will add to the PRHDF
• Growth of fund
};> The Equine industry has grown from a $1.5 billion economic impact in 2001 to $4 billion
currently.
o 28,000 jobs added after passage of Act 71
o Potential loss of 15,000 jobs if $72 million is transferred
o Economic impact is where the horse is located
o Majority of money stays in the Commonwealth
~ Pennsylvania Department of Ag Audit
o Fiscal Year End balances
Potential Broken Business Model
Parx Penn National Presgue Isle Downs Projected Purses $ 35,000,000 $ 26,000,000 $ 9,000,000 Training Expense S (3S,587,500) $6'S/dJot.1SOO HOB4I;, 365 day: S (30,112,500) SS5/~v.1SOO~. 365 d..1.~ S (11AOO,OOO) $SO/dJv.1OOOhor-..e:.190cby;
Jockey Expense S (3,500,000) 10"" Oho Q I Pu ... .e~ S (2,600,000) 10% oftoQI Purw:. S (900,000) 10% of toQl Pu.-sr.
Blacksmith S (2,250,000) SUS/month S (2,070,000) SUS/month S (690,000) SU S/month
Vet Expense S (7,200,000) S4OO/monw $ (5,400,000) S300/month S (1,800,000) $300/mon.tn
yearly loss * $ (13,537,500) $ (14,182,500) $ (5,790,000)
Return on Invest m ent -27.89% -35.30% -39.15%
• Yearly loss does not indude t he substantial capital required to be invested to purchase or breed horses, the revenue prOducing asset.
Conclusions 1. Ovmers will not partidpatc in a business with a substantial negative ROI 2. Owners w ill migr<lte to states with a supporting business model forfeiting mill ions already invested
3. 15,000 Jobs lost 4. Acres of open space previously utilized by horses will disappear
S. Racine: at Presque Isle Downs will disappear as no owners will ship to a migratory track
1
Purse Comparison By State 2010
# Races New Jersey 877 Kentucky 2020 ON, Canada 2228 New York 3740 Arkansas 504 California 4403 Pennsylvania 4519 Delaware 1041 Iowa 603 Indiana 1128 Florida 3233 Louisiana 3251 Virginia 426 Illinois 2104 Oklahoma 1116 Maryland 1365
Gross Purses $ 50,024,825 $ 89,311,408
$ 93,441,541
$ 119,800,835
$ 15,619,800 $ 132,541,382 $ 116,275,253 $ 26,714,799 $ 15,262,699
$ 27,208,855 $ 76,909,950 $ 76,089,389 $ 9,669,800 $ 46,285,006 $ 22,832,885
$ 27,342,500
Average Purse
$ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $
Per Race 57,041 44,214 41,940 32,032 30,992 30,103 25,730 25,663 25,311 24,121 23,789 23,405 22,699 21,999 20,460 20,031
I ' ' ,I • • ' • ' . .. '. • I [' '.,
New Mexico 1718 $ 30,737,667 $ 17,892 Minnesota 476 $ 7,533,455 $ 15,827 West Virginia 4065 $ 63,613,425 $ 15,649 Texas 1192 $ 15,787,070 $ 13,244 Colorado 234 $ 2,435,736 $ 10,409 Michigan 416 $ 3,903,040 $ 9,382 Massachusetts 893 $ 8,291,526 $ 9,285 Washington 880 $ 8,023,275 $ 9,117 Arizona 1694 $ 12,556,992 $ 7,413 Nebraska 816 $ 5,695,784 $ 6,980 Ohio 2636 $ 15,458,300 $ 5,864 Oregon 789 $ 3,470,697 $ 4,399
Source: Jockey Club
States with Slot Hevenue to purses
~
Pennsylvania Race Horse Development Fund 2012 .. 13 Executille Budget
The 2012-13 budget proposes to shift funding for several programs to the Pennsylvania Race Horse Development Fund. These programs are AgrIculture Research, Agriculture Extension, UnIversIty of Pennsylvania Veterinary Activities and Center for Infectious Diseases and Payments to PA Fairs.
This shift will have the greatest Impact on other programs supported by the fund In 2012·13. However, because gaming revenues are projected to Increase and the General Fund transfer from the Pennsylvania Race Horse Development Fund expires In 2012-13, funding for the race horse Industry Is projected to return to near .. 2011-12 levels by 2013 .. 14.
PennsylvanIa Race Horse Development Fund Dollar Amounts In Millions
2011-12 2012-19
PRHDF Assessed Rate (Capped @ 12%) 11.4" 11.2%
PRHDF Assessment $ 276.48 $ 287.80
Genera' Fund Transfer $ 47.00 $ 48.93
Transfer to Asrle CoUege Land ScrIp Fund 44.74
UnJv. of Penn. • Veterinary Activities 26.50
Unlv. of Pcnn •• Center for InfecUous Diseases 0.24
Payments to Pa Fairs 0.87
Subtota'·Remalnlng Revenue $ 229.40 $ 166.52
Horseman's Hearth/PensIon Benefit 11.44 11.44
Purses 181.84 129.34
Dreedlng Fund 36.20 25.74
Subtotal·Remalnfng Revenue $ $
Totol Distributions $ 276.48 $ 287.80
2013·14
11.2%
$ 295.02 $
$ $
44.74
26.50
0.24
0.87
$ 222.67 $
8.91
178.14
35.62
$ $
$ 295.02 $
~
11.0"
302.40
44.74
26.50
0.24
0.87
230.05
9.20
l84.04
36.81
302.40
FY 2010/11 Revenue Distribution t.Jeen~ ~mln!J G.1mlng En'~ -... -- 12013'% 1~~ EmlT'-:: NZ011 G!R N2011GT'R: 1'Y2011 eIR om .!!!B
C;)tegory One Motlec~nSun s:!:!S.sso.U1.00 , 225.55O.l':1 225,5SO.141 S 27,Dfi6.017 , 40.S9!).02S Phlbde!ahb P.1fk 5..\<II;(l,l :w,m.oo S 33O.13(.S7S 380.134 • .815 S 45.611i.lSS S 68.~24.278 HoIlr.lh's S2!IO..1'1.\3O..\.OO S 2.8O,393.s03 =.=.= S 33.647,220 S 50.':70.$31 PrI:"'Aut' I~ Doooo= 51(.9.13-:,11 1.00 S 169,7S-C.IU S 169.75-(.111 S 20,370.493 S ~,5S5.740 Mt';I~ 5230.-'97,7t.O..OO S 250."97,760 S 250,497,760 S 30,05!1.711 S 45.039,597 HCI'N ~~9,11 3.767.oo S 249,113,767 S 2'~9,l13,767 S 29.!93,652 S 4<:.$40.478 St:lndlR!bred S S S S , 1,ssS,444.lS7 S 1,ss5,444.1S7 S 186,653.299 S 279,97~""8
18% $bwtOf'f oblip:ion to IiotWfncn S 279,979,948
C:ltcgory Two ,,'It, AIry Sl45,~.un.oo , 1.¢S,994,022 , 17,519,2S3 S 281.597,024 PIIll.:Idt:lpbi:l S S Plruburch ~.oo S 2(;2,580.027 S 3l.509.603 Allt:ntown S~~~.oo S 26<.06S,657 S 31.6S8.23!1 Pblb(1oo:tphb , S Sut;.lr House 118.555,002.00 S 118,555.002 1.1;.226,600
S791.197.70!..OO , 791,197.70S 94,943.725
St.1lewid(' GTR 791.197,70s'OO 2.346,G-'1.865
eo.....,.""" Yt:al1y G::Imlng GTR I Y=ly Ynr1y%Of No: COntriblt.ion CAT' C:ilrgof)' 2 TObI [)ooIbr- c.nt:r.LI Fund ........ Hur:h& lil:ozl:fJ.!.Pen GlR%10 TII'!:I I y .. :>o1 :z:GTR: ~ "'" ~ D;stribtmon:f ContrnMlflon
w __
~ H_ Pcn::lon4,* S,1 AM1IQor ~ ~tcgoryOno Moh~n5\1n 9.61% S 26,910.,SS9.37 11.93% S 26,910,5.0"9.87 14.50:' , 13.6S8..(35 S 40,S99,OlS S 6.901,3]4 S 33,697,191 l,347.a88 S 1,653.079 S 3l,1)4.I:.112 14.!KOO% "'-Pblblklphb P~"" 1'-'0". S 45,354,233.31 JUU·':' S 4S,350:,233.31 24.",," , 23.o70.G-U S "-".,,,. S 1l.G32.127 S S6.792.1SO S 2.271,6S6 S 2.:n6.OQ:S S 54.CIOG.l OS 1".9«)0% 1&_
It:rr.ltI'~ lL95% S 33,4SC,ooo.G4 1; .93"% S 33.4~,OOO.6t- 13.03% , 17.0HI.830 S 50,470,831 S 8,580.041 S 4U90.m S 1.67S.G~2 S 2,o5S,031 S 39,!3S.7St 14.9-:00% 18..(0)0
~1:Je1)owm. 7.23" , 20.253.515.43 ll.93% S 20.253,515.49 10.!n" , 10.3Q2.22S , ]O.5SS.7cO S 5,1911,476 S "".",.. S 1.01 ... .¢S1 S U.llr.,l44 S 24,117,1.."""0 1'-""" lB."",
Me3dow~ 10.67% S 29,887,112.70 11,93% S 29,S.a7.l12.70 1&'10% , 15.202.4&4 S 4S,OS9,5!l7 S 7.665,231 , 37,424,36S S 1.49G,'J7S , l ,C35,922 S 35.583.4 .. 3 14.9400% ,."'" HCPN 10.62% S 29,721.<)$7.25 lL9J'JO S 29,721,937.25 16.0]!' , 15.118.491 S 44,v..o.478 S 7.622,Ml S 37.211.597 S l.'=8!,104 S l,825,77!l S 3$.391)1.13 14.9400"-' ,.."'" ~ncbltlbrt:<l 0.""" trQIv/O: , 0.00"-' , , S S S , _/01
$ 185's!1 • .t39.~ 1:5,581,439.20 loo.oo:c 94.393,.509 , 279,979,')48 S .',59G.S91 S Z32.38J,3S7 S 9.295,"334 S 11,400,000 221),983,357
C3tcgory Two Me Al~ ."" 11,418,617.87 11.91% 17,413,611,&7 Phit:ldefphl3 0.00% S IIOIV/O! S
""""''''' 11.19% S :a.32!,6Se.!3 11.9):""; S 31.328.658.83 AllentOWTl 11.25% S 31.5OG,2G!.61 U .9r..; , !ll.S06-..26:t.Gl
PhH~clpfll3 0.00" S . IJIY/OI S ~CIIrl-loo.nt 5.05" , 14.1«.903..75 11.93'" , 14.144.903.75
~~ry Two :lOJfK cont.\but;on S !I4.3!18.S09.06 $ 94.39e.s09.ot
l.!% SUM.,..., r undir>c $ 279.'17!).!Mt..2(.
FY 2010/11 Revenue Distribution
Yurt)' RcY&nue Dolb~ 1&.6S%to ~ToHor-............. 83~ 10 Pt.ne~ 1it,,1Ih $ E!!:!J:kWI 1&.66~fO~~ ~
Mo~n5un S 32,044,112.36 S 26,703,426.1:6 S 1.653.078.70 5,340.G85..lS S 33.6g],190.14
Ph'l.:Idclphl!l 10,,,11'. , 54,006,105.21 S 4S,005.031.51 S 2.7U.045.10 S 9,OOl,017.l:l S S6,.792,149.7! H~lr.Ih·~ S 39,.&35.7SS.37 S 33.196,-«>S.11 S 2,05S.03O.9$ , 6,539.292.80 S 4l,!9O.7S&.95 Pne:-que ~ Down$ S 24.117.119.% S 20,097,599.88 S 1.244.144.23 S 4.019.519.83 S 25,361,263.94
M,""" S 3S,SSS,443.14 S 29,657.03.5.83 S 1,835,922.20 S 5.931.406.9S S 37,424,3154.99
", .. S 35,~I,..::l&.OO S 29."93,181,5S S l.82S,na.79 S S,.!I.98,636.l0 S 37,217,5%.44
SUncbltlbred S , s S 220,98.3,3.57.06 5 18>1.152.7%.81 , 11,400.000.00 18,919,173.11 SI7,91l,3t(.93 $ 23.2,3!.3,.lSU.S
FY 2013 simulation for Deposits and Revenue Distribution - PRHDF Ueen~~mitlg ~ming EntIty Fb<:ing Entity ,,"" 111.00"1. Entil;.r.-. FYW:tGTR FY201lGro FY2013GTB !ill! E!!l
C:ltegory Onl!' Mohcr:;:an Sun S2::S,SSO,H l.oo , US,sSO,141 225.550,141 , 27,066,017 , 40,599,025 Jlhil;xl~tphl:t P:trk S3S0,l 34,siS.OO , gso,134.B7S lSO,134,B7S , 45,61.6,1SS , 63,424,278 ~,"",h'~ ~'\9J.5Ol.00 , 280..393,.503 , 280,393,.so3 S 33,647,220 , SO,470,S31 P~que I~ Down: 5169,134,111.00 S 169,754,111 S 169,7S4,l U S 2O,3iO,493 S 3O.ss5,7~ Meadow.; S250.497,76O.oo S 250,497,760 S 250,497,760 S ~,059,731 S 45,089,S17 HCPN S:49,n~,7G7.oo S ~9,ll3,767 S 249,113,767 , 29,893,652 S 4<:,S40,m Stllndudbrcd S S S S
S l.SS5,444,157 S 1,.SSS,444,157 S lu,5S3,m S Z79,979,9fk'l
1S% ~t;Uutory obliCOltion to Hor::;cmcn S 279,979,948
C:ltcgory Two Mt.A1ry S14S,m,o!2.00 lft5,99-t,022 , 17,519,283 : $ ~ "!fl,024 ,.,..,.., S 220,000.000.00 S 220,000,000 S 2fi,400,OOO PI_
5:62.550,017.00 S 2G2..SS0.017 S 3l.S09,603 Alk:n~own S264,06S.6S7 .00 S 264,068,657 S 31,638,239 NemleoUn 90,000,000.00 S 90,000,000 S 10.soo,ooo Sut;tr Kot:'"~ , llS,sS5,OO2.00 S I1B.S55,OO2 S 14,226,600
51.101,197,703.00 S 1.101.197,708 S l32,.143.725
Statewide GTR 1,101.197,703..00 S 2,GSG,641,s&S
~togoryOne
Yc:trly Golming GTR I '""" Yurly%Of Net~butioo CAT' C;itopOty2 TobIOoIl:t~ Gctner.ll FtJnd _. ... _.
Ho:IIth 3. Poe ... $10 Pur$e:I
Tot.:oIV .. ..:ortz:GTR A":fI"sment !ill! ToRHOf Oi·.tTIbution .,.. COntribut)on toHon.e~ 1V'b .... """""'" Pen-.ion ~% S1' .. UI1\oor .7nd~
~tegoryOnc M~:tnSI1f' 8.49% 5 23,770,4Z3.99 10S4~ S 23,770,423.99 1':.50% S 16.«1:'..596 S 40,599,025 S .... ,""' S 33,697.1')1 S 1~7,!83 S 1.653))79 S 32,044,lll Phlbdl!lp~ Plork 1':.31% S 40,061,903.24 10.S4~; S 40,061.903.24 24.44% S 28.262..369 S 6S,4~.l78 S 11.632,.U7 S 56,792,1SO S 2.27l.6S6 S 2,786,045 S 54,006,105 Hlrr.lIh':: 10.55% S 2S,s5O,297.ss 10.54" S 29,550,297.88 18.03% S 20,9'20.5:1.3 S SO,470,$31 S S,sSO,041 S 41,390,139 S 1.675,632 S 2,055.031 S 39,83S,7S2 P'f'C-..... uel:;k:OOWn:: 6.39% S 17,a90,lS9.69 10.54" S 17..s90,159.69 10.91" S 1::!,S65.S!O S 30,555,740 S S.l94,476 S 25,.351,264 S 1.014,451 S 1.2'4.1<4 S 24,117,120 M~:tdc7w$ 9A3% S 26,399,625.33 10.54'~ S 26,399,625.33 16.10% S 1e,$e9.971 S 4$,089,597 S 7,665,231 S -n,424,36S S 1/.96.975 , l,S3S,922 S 3S,S8S,4¢3 HCPN 9.3S".4 S 26.2S3,768.16 10S 4" S 26,253,763.16 16.02% S 1t1.se6,710 S 44,3.t:0.47S S 7,622,.S81 S ?:l;217~7 S 1ASE,i04 S =.779 S 3S.m,lIlS
SQnc!ilrdbred 0.00% S =Ol..,/OJ S 0.00% S , S s s S s S 1Cl.!l2G.13t1.30 S 16J.92G,lSS.3Q 100.00% S 1.15.053,7'00 S 27!>.m .... S 41,596,591 S 232.3833$1 S 9.29S,334 S 11.400,000 S 22D,9S3.3S7
C:ltcgory Two Mt.Airv S.SO% S 15,336,115.56 10.S4~ S 15,386,115.56 ,""-,,, S.28% S 23.1llS,$07.02 10.5-"" $ 23.lSS,so7.02 PitUhureh
''''''' S 27,672.'59.36 10.$4" $ 27,672,959.36
-,~ 9.9-:% S Z7,S29,!:44.10 10.54% S 27):29,844.10 Nemiec1;n 3.39% S 9,4S4,9S0.15 10.s.:~ S 9,454,9&1.15 Sut~rHoua 4.46% S 12490; 353.78 10.s.:" S '2.(94~78
~ttt;ofY Two purse tontribubon S 11' .053,7".96 , 11&.053,7!\9.96
1S% Sta:U'COfY Fundins s m,97!1,$(8.:!tj;
FY 2012113 Revenue Distribution
YelIrty~00"lIr:: 16.66% to Q2lt.,. .. , To ~ ...... n !£,33~to~ He~l:h'. p,.n::;on 1~CS·~to~~ 5i..,. St!lm'"
Mohepn Sun 32,044,112.36 S 26,703,'l26.36 S 1,6S3,OnI.70 , S,340,6SS.18 S 33,597,190.74 Phil3dclphlll hrk S<\,OO5.lOS.:U S 45,005,037.51 S 2,7!6,0¢5.1O S 9,001.017.1$ , S6,;92,lC9.78 Ii:ttr.lh': S ~,.83S,7SS.37 S ",196,465.17 S 2,0:55,030.93 S 6,639,292.!0 S 4l.S9O,7SS.9S ~I:;IeDowm S 24,117,119,96 , 20,097.599.38 S 1.244,144.23 S 4,019,'519.83 S 2S,36l,.2(i3.94 Mt:tdows S 3S,58S,~3.14 S 29,657,015.83 S 1,.335$22.20 S 5,931,406.5'5 S 37,424,364.99 HCPN 3S,391,S18.00 S 29A93,1S1.S5 S 1,S25,m.79 S 5,898,636.10 S 37,217,596.44 5DndlIf'dbro:d S , s S
220,9tl,3S7.OC S 134,152,796.01 S 11.':00.000.00 S 18,919,173.11 S 17,911,384.93 S 232.3S3.3S4.C5
-
GTR at the Category 1 license - PGCB
FYE 2009 FYE 2010 FYE2011 FY2011-12 FY2012-13 FY2013-14 FY2014-15 Mohergan Sun $ 216,041,734 $ 222,586,870 $ 225,550,141 Parx $ 356,255,718 $ 381,651,762 $ 380,134,875 Harrah's Chester Downs 5 319,601,304 $ 306,764,863 $ 280,393,503 Presque Isle Downs S 167,849,999 S 164,699,164 $ 169,754,111 The Meadows S 264,489,169 S 261,072,067 $ 250,497,760 Hollywood Casino $ 219,229,940 $ 246,992,498 $ 249,113,767
$ 1,543,467,864 S 1,583,767,224 S 1,555,444,157 $ 1,536,000,000 $ 1,598,888,889 S 1,639,000,000 S 1,680,000,000
Increase/Decrease 2,61% -1.79% -1.25% 4.09% 2.51% 250%
PRHDF Cap Amount $ 279,979,948 L1 276;:WP,@ $_ 2moO:OOO :s: 295',020,000 $ .. . S02,40];goQ
= 2012-13 Executive Budget Projections
= GTR Required at category One Licensee's to produce Projected Revenues to the PRHDF
/'
Midwest Thoroughbreds financials for Pennsylvania operations" 2010
Race Record Penn National Presque Isre Downs Parx Race Track
Income
Purses at Penn National Purses at Presque Isle Downs Parx Purses C'almed Horses (PID) Claimed Horses (Pane) Tota' Income
Expenses
Training (PID) Training (PENN) Feed (PID) Feed (PENN) Vet (PID) Vet (PENN) Blacksmith (PID) Blacksmith (PENN) Employees (PID) Employees (PENN) Jockeys (PID) Jockeys (PENN) Track Photos (PID) Track Photos (PENN) Hay Horse Claims Stud Fees
Net Income/loss
~ 162 215 21
398
$ 552,650 $ 1,023,022 $ 88,720 $ 35,000 $ 20,000
$ 247,500 $ 210,000 $ 350,000 $ 280,000 $ 120,000 $ 90,000 $ 15,000 $ 15,000 $ 250,750
$ 243,200 $ 90,985 $ 50,521 $ 2,871 $ 1,764 $ 225,000 $ 167,000
S 14.000
An Zml ~ ~ ~ fi
Owner_Export..qfY
Tommytown Thoroughbreds llC 2010 PA Business Summary
H2ru II:MIS Rm flnlm Jiiml.nal tlgGkg!l!l!MI mrum 11& ami 1m Shelly Kay PEN 11812010 1 $12,000 $ ,,200 1
Mlntsterswlldride PEN 11912010 6 $200 $ 76 1
Now and Zen PEN 1/912010 3 $2,970 $ 149 1
Ex~ssJvelyp8Uenl PEN 112012010 2 $3,400 $ 170 1
Island Wild Cat PEN 112012010 6 $200 $ 75 1
ShellyKa1 PEN 112212010 6 $200 $ 75 1
MlnIsterawltdride PEN 112312010 3 $1,980 $ 99 1
Now and Zen PEN 1123/2010 6 $1,080 $ 75 1
Mlnlsterswlldrlde PEN 212012010 9 $200 $ 76 1
Boollhe Boss PEN 31612010 1 $21,600 $ 2,160 1
Boot the Boss PEN 3131/2010 7 $200 $ 75 1
Star Redeemer PEN 4/1412010 4 $2,280 $ 75 1
Yes No Whatever PEN 4/1412010 6 $200 $ 75 1
Boot the Boss PEN 4/21/2010 3 $4,180 $ 209 1
Star Redeemer PEN 412812010 2 $6,600 $ 340 1
Fund the MinIster PEN 51712010 1 $12,000 $ 1,200 1
BooIlh8 Boss PEN 511912010 1 $20,400 $ 2,040 1
Now and Zen PEN 612512010 1 $19,200 $ 1,920 1
Star Redeemel PEN 512712010 6 $1.020 $ 75 1
Boot the Boss PEN 61112010 5 $840 $ 76 1
MinIsters All8l'boy PEN 61412010 3 $3,520 $ 176 1
Now and Zen PEN 6/1612010 1 $20,400 $ 2,040 1
MlssDofce PEN 611812010 1 $20.400 $ 2,040 1
Henry the MInister PEN 71612010 7 $200 $ 75 1
MinIsters Atlarboy PEN 7n12010 4 $1,920 $ 76 1
Shesgolnghollywood PEN 71812010 5 $980 $ 75 1
Boot the Boss PEN 7/1412010 1 $20.400 $ 2,040 1
Linnea PEN 7114/2010 1 $21,600 $ 2.160 1
Fund the MInister PEN 7/1612010 7 $200 $ 75 1
HeIV)' the Mlntsler PEN 711712010 4 $1,860 $ 75 1
LInnea PEN 713012010 4 $8,000 $ 75 1
BooI the Boss PEN 811212010 1 $21,600 $ 2,160 t Fund Ute MinIster PEN 8/2012010 5 $360 $ 76 1
Ministers Altarboy PEN 612112010 5 $450 $ 75 1 MinIsters Altarboy PEN 91212010 3 $1,430 $ 72 1 Fund the MInister PEN 91312010 1 $7,200 $ 720 1 Henry the MinIster PEN 919/2010 8 $200 $ 75 1 Mlnlsters Alt81boy PEN 9/1112010 8 $200 $ 76 1 ShesgOinghollywood PEN 101812010 1 $7,800 $ 780 1 Banlcer Bailout PEN 1012212010 3 $2,530 $ 75 1 ShesgolnghOllywood PEN 1012712010 2 $2,400 $ 120 1 Shesgolnghollywood PEN 11/1312010 6 $200 $ 76 1 Banker BailoUt PEN 11/1812010 4 $1,380 $ 76 1 Banker Ballou1 PEN 121812010 1 $10.200 $ 1,020 1 Now and Zen PHA 312212010 1 $16.200 $ 1,620 1 Fund the MInister PHA 512812010 4 $1,380 $ 76 1 Fund the Minister PHA 6114/2010 6 $150 $ 76 1 Linnea PHA 612112010 1 $19,200 $ 1,920 1 Boot the Boss PHA 612812010 4 $2,640 $ 75 1 Silent Stalk PHA 7127/2010 2 $8,400 $ 320 1 Fund the Mims'er PHA 911312010 11 $200 $ 76 1 He Welches Ovel Me PHA 1012512010 6 ~ I Z§ 1
$ 310,730 $ 28.774 52 15 4 6
Tommy town Monthly TraInIng Bills 2010 Win % 28.85% ITM% 48.08%
January $ 27,196 February $ 15,450 March $ 19,647 April $ 20,717 May $ 31.177 June $ 35.644 July $ 31.055 Aug $ 30.827 Sept $ 24,980 Oct $ 15,200 Nov $ 10,138 Dec i j26~
$ 274,444
Jockey Fees $ 28,774
Vet Bills $ 33.621.70
Tolal Expenses to Race In PA i3361840 Net Loss ($ imported fnlo PA Ag economy) $ (26,110)
Pags1
f.
Preque Isle Downs Slot Purse account summary - 2009-10
10/6/2009 $ 415,267.90 $ 636,171.89
10/13/2009 $ 421,272.05 $ 1,057,449.94
10/15/2009 $ 402,037.25 $ 1,459,487.19
10/26/2009 $ 377,417.23 $ 1,836,904.42
Interest $ 417.51 $ 1,837,321.93
11/2/2009 $ 357,544.41 $ 2,194,866.34
11/9/2009 $ 361,976.40 $ 2,556,842.74
11/16/2009 $ 397,406.64 $ 2,954,249.38
11/23/2009 $ 424,126.43 $ 3,318,315.81
Interest $ 927.60 $ 3,319,303.41
12/1/2009 $ 383,675.88 $ 3,762,979.29
12/8/2009 $ 372,726.23 $ 4,135,705.52
12/15/2009 $ 383,784.15 $ 4,519,489.61
12/22/2009 $ 289,938.62 $ 4,809,428.29
12/29/2009 $ 280,329.03 $ 5,089,757.32
12/30/2009 $ 4,700,000.00 Transfer HI Account $ 389,757.32
Interest $ 1,397.36 $ 391,154.68
1/S/2010 $ 280,228.34 $ 671,383.02
1/11/2010 $ 426,104.48 $ 1,097,487.50
1/22/2010 $ 160,373.14 $ 1,257,860.64
Interest $ 123.94 $ 1,257,984.58
2/1/2010 $ 185,451.34 $ 1,443,435.92
2/2/2010 $ 188,413.13 $ 1,631,849.05
2/4/2010 $ 10,995.37 $ 1,642,844.42
2/8/2010 $ 225,019.70 $ 1,867,864.12
2/16/2010 $ 281,888.38 $ 2,149,752.50
2/22/2010 $ 207,156.80 $ 2,356,909.30
Interest $ 354.72 $ 2,357,264.02
3/1/2010 $ 284,675.28 $ 2,641,939.30
3/8/2010 $ 274,470.58 $ 2,916,409.88
3/15/2010 $ 244,447.47 $ 3,160,851.35
3/22/2010 $ 322,622.82 $ 3,483,480.17
3/29/2010 $ 282,618.58 $ 3,766,098.75
Interest $ 679.46 $ 3,766,778.21
4/5/2010 $ 284,361.51 $ 4,051,139.72
4/12/2010 $ 300,878.65 $ 4,352,018.37
4/19/2010 $ 307,562.42 $ 4,659,580.79
4/26/2010 $ 298,203.08 $ 4,957,783.87
4/29/2010 $ 4,710,241.48 Maturity HI account $ 9,668,025.35
Interest $ 951.27 $ 9,668,976.62
5/3/2010 $ 299,351.54 $ 9,968,328.16
S/10/2010 $ 312,655.08 $ 404,351.00 $ 9,876,632.24
5/17/2010 $ 306,631.69 $ 10,183,263.93
5/24/2010 $ 292,277.40 $ 721,723.00 $ 9,753,818.33
Interest $ 1,876.33 $ 60.00 Bank service charge $ 9,755,634.66
6/1/2010 $ 266,073.97 $ 615,523.00 $ 9,406,185.63
6/1/2010 $ 277,164.58 $ 857,680.00 $ 8,825,670.21
6/14/2010 $ 318,840.83 $ 769,699.00 $ 8,374,812.04
6/21/2010 $ 276,888.94 $ 998,137.00 $ 7,653,563.98
6/28/2010 $ 295,953.67 $ 80.00 Bank service charge $ 7,949,437.65
Interest $ 1,757.48 $ 1,800,000.00 $ 6,151,195.13 Balance 6/30/2010
7/6/2010 $ 303,216.38 $ 661,123.00 $ 5,793,348.51
7/12/2010 $ 249,530.82 $ 698,837.00 $ 5,344,042.33
7/19/2010 $ 490,042.76 $ 60.00 Bank service charge $ 5,834,025.09
7/27/2010 $ 420,045.13 $ 1,681,173.00 $ 4,572,897.22
Interest $ 1,176.87 $ 4,574,074.09
8/2/2010 $ 406,190.03 $ 885,127.00 $ 4,095,137.12
8/9/2010 $ 395,188.53 $ 4,490,325.65 8/16/2010 $ 443,774.48 $ 1,552,150.00 $ 3,381,950.13 8/23/2010 $ 429,277.50 $ 1,024,279.00 $ 2,786,948.63 8/30/2010 $ 412,998.17 $ 1,171,421.00 $ 2,028,525.80 9/7/2010 $ 401,561.69 $ 2,430,087.49
9/13/2010 $ 399,615.80 $ 2,072,601.00 $ 757,102.29 9/20/2010 $ 463,404.29 $ 1,220,506.58 9127/2010 $ 357,084.16 $ 1,577,590.74
Interest $ 1,025.57 $ 1,224,160.00 $ 353,856.31 Endofmeel
$ 17,1386784.00 Total Purses Paid 5/14/10 to 9/30/10
(
Carl McEntee - Director of Sales
Northview Sta1lion Station - PA
March 7,2012
I aln Carl r"IcEnlee - Ule Director of Sales for Norlhvicw Stalliolll~u"ln in I.ancaster County.
I anl representing tllC principal owner of the fann - Richard Golden. IVIr. Golden sent a letler to Govcrnor Corbell, Senator Snnlcker and Represcntative Culler on rvlarch 1st and I (Un here to rciterate his conlll1ents and answer any questions about NortllView's Pennsylvania operations.
I anl here wilh Brian Sanfratello, President of the PennsylVaIlia Horse Brecders Association.
'Thank you lor tIlls opportunity to address the Conunittee.
N orthview has been in the thoroughbred brecding business since lhe latc 1980s.
The first Northvicw fann was established in ~/IalTland and the business cxpanded into PenllsylvcUlia due to passage of Act 71 with the purchase of 180 acres in Lancaster.
Norlhview's Pcnnsylvania operation opcncd for business in 2009 just three years after slot Inachincs CaIne (0 the slalc's thoroughbred mlCl stcu1(lard racctracks.
In a VCI)' short period of tjnle, Northvicw established itself as the leading stallion fann in Pennsylvania and is also recognizcd as onc of the l()relllost breeding operations in the IVIid-Atlmltic region.
Of notc, Slllmty.J ones, the Pennsylvania-Bred winner of (hc 200,t Kentucky Dcrby and Preakness, is now based at Northvicw·PA along with luan)' other lcading stallions.
Northview cmne to Pennsylvania due to the funding sccnario for the Racing Fund as outlined in Act 71 mId as the stalc secnlcd conunitted to growing the racing indushy.
Let lllC shm"e wilh you (hc dircct and indirect invesuncnts Jllade by the [ann's owners - which as I have staled cmne as tJIC rcsult of Act 71.
The purchase of thc fOrIner dairy l~uln in I.I('Ulcaster preserved 180 acres as l~uln lmld and opcn space,
6 state of the cu"l barns have been built at a cost o[ over $3 lllillion,
12 luilcs of fcncing and other landscaping hnproVcluents have becn Blade at a cost of over $165,000,
FCU111 vehicles culClluachiner}' have becn purchased for ovcr SI75,000,
Thcre are 11 full ulnc cnlployees at fann with CUI annual payroll of $500,000,
rrhc fann purchases over $600,000 annually for hay, feed, culCl othcr supplics - thc lllajolity of which conICS frolll Pennsylvania vendors,
The [ann costs over $250,000 annually to Inailltain,
Finally, luillions has been invesled to purchase lop stallions and broochuares, which have been brought (0 PCl1nsylvmlia.
All told, thc invesllnent since the passage of Act 71 exceeds $15111illion.
Due to the Governor's proposed transfer of $72 luillion out of lhe Racing Fund, on top of the $50 Illillion Generall1'und transfer, we are deeply concerncd that ollr business nlodcl is now ill jeopardy cuul equally cOllcernecllhat the state is turning its back on the racing indust11' and the cOllllnitInent nlade under Act 71.
If adopted, the Governor's budget will inhibit further inveshnent by Northvicw in Pennsylvania cUl<1 will hartn all the breeding fanns across (he statc.
The GOVC1110r's budget has badly shaken confidence in the stale's COJlUuitlllel1t to racing and the 30% drop to the Racing Fund will Silllply drive people to other slates and crase the progress since thc passage of Acl 71.
All of the cluployees at. Northview cuul aU of our lllcUIY vendors (Uul supplicrs are looking to the LcgislatlU"C to prolectthe Racing Fund mlCJ honor tile conllllillnent luade to I-Iorselllen in Act 71.
I understand the budget COllIes down lo lllullbers, yel, the "#1", a snlcul Illullber, is the nlost inlportant. "One" thue is all it lakes for an entire industry to lose its credibility. ,~rilh the annOlUICClllenl of the proposed cut frolll the Racing Fund, growth has a1rcad)' been stifled; if il passes it will destroy our repuultion. Not only in the equine indUS1l1', but the reputation of our state is at stake, we nlust send a lllessage that Pennsylvania believes in indusu1' and job creation. Pennsylvculia cannot presenlthe itnage, of encouraging invcs1111cnt and tllCll renege on Ule COlllluil1ncnt luade. TIns conuuit111cnt transcends the equine industry, il's a Inattcr of state credibility.
Please protect the progress llladc sincc the passage of Act 71. Please scnd a signal to Horselllen in the state cuul across the COUI1111' Ulat Pennsylvmlia is conuuiued to racing. SUlmty Joncs is back hOllle -let's kcep hinl here!
Thmlk. you for this opportunity.
Pennsylvania Equine Coalition Talking Points
• Not Tax Payers money - The creation of the gaming industry in the Commonwealth was a partnership between the state, racetrack operators and the horsemen.
• In order to gain enough votes to enact gaming in Pennsylvania, the agriculture community across the state supported the legislation in return for money directed to the equine industry.
Peno3yh'aIli3Ia .... · m~dat&S th3 faU'J 'I:''\ng apiitd feVa:nU3 fram e~h dJllar g3n:tratod by slat m=-chin~ 9amin;l:
ljr..:ense= Ra1a!noo EarningEi - 4~~,;,
• Gaming Fund PlOpertyTa< Redu"~"n - 3~% Ll R.c. Horse DeveiJpm.nl Fund - 12%
66% 'Purs"" 4'10 - HeaHh Insurance & P~IEian Bsn.fit>
7'fo -PA Bre~r~ Fun"
~ - PASiie SlakS3 Fund . . ' .. $ -PASlaIJdardbred Breeders Oeveloprr'-'nI Fund
17'!b -General Fund Lo~~ Gf:N£lrnm9n1 Sh.:are- ,1%
Eo:mJmic ["YoJ ebpcTrSnt & Touri3m Fund - 5%
Source: Casino/Racetrack Benchmark Report 2006-10
Pennsylvania Gaming Control Board
• The Legis lative Intent was to promote and protect the equine industry within the Commonwealth of Pennsylvania
o # 2 objective of Act 71
o Revenues to the industry ($227 - 330 million) was projected
• Mill ions of dollars have been invested in the equine industry
o Business Plans 10-15 years in duration
o Farms and land preservation benefited
o Horse f lesh
• Higher purses attract better horses
• PA Bred program
• Stall ions
Potential Broken Business Model
Parx Penn National Presgue Isle Downs Projected Purses $ 35,000,000 $ 26,000,000 $ 9,000,000 Training Expense S (35,587,SOO) $65/Iby,lSOO Hot<~. 365 day$ $ (30,112,sOO) $SS/d~. 1500 Hor'"~, 365 dav~ S (11,400,000) S5()ld~.l000 h~e~,lSO~
Jockey Expense $ (3,SOO,000) 10% oflOt:l! Pu r~~ S (2,600,000) l~: crf lObi Pur:;e~ $ (900,OOO) 10%of tobi f'ur.;e:;
Blacksmith S (2,250,000) SUS/rnonth $ (2,070,OOO) SUS/month $ (690,000) Sits/month
Vet Expense $ (7,200,OOO) $400/month $ (5,400,000) $300/month $ (l,SOO,OOO) $3.00/nU'lntil
yearly loss * $ (13,537,500) $ (14,182,500) $ (5,790,000)
Return on Investment -27.89% -35.30% -39.15%
• Yearly loss does not include the substantial capital required to be invested to purchase or breed horses, the revenue producing asset.
Conclusions 1. Owners will11at participate in a business with a substantial negative ROI 2. Owners will migrate to states with a supporting business model forfeiting millions already invested
3. Thousands of j obs will be lost
4. Acres of open space previously utitized by horses w ill disappear S. Radng at Presque Isle Downs will diS<1ppear as no owners will ship to a migratory track
9:11 PM
02129112 Accrual Basis
Dun Roamin Farml Wire To Wire Profit & Loss by Class
All TransactIons
Whlsperdownthelane
Ordinary Income/Expense Income
Breeders Awards (PA) 8,160.00 Purses Earned 20,400.00
Total Income 28,560.00
Expense Bank Charges 10.00 Barn Stakes 300.00 Blacksmith 963.00 Commissions (Trainer) 2,856.00 Dentist 60.00 ElIgibJlfty Fees 500.00 Gate Fee 20.00 Jockey Fees 2,856.00 Licensing 245.00 PhotoslTapes 53.00 Pony-to·Post 25.00 Stallion Fee 7,500.00 Supplies 25.00 TraIning - Farm 18,655.00 Training - Track 5,928.00 VannlnglTransportation 2.422.25
TOTAL
8,160.00 20,400.00
28,560.00
10.00 300.00 983.00
2,856.00 60.00
500.00 20.00
2,856.00 245.00
53.00 25.00
7,500.00 25.00
18,555.00 5,928.00 2.422.26
Veterinary 1.1.00.25 .... ____ ~00.25 ---_._--.--Total Expense _. ___ ... _ 43.418.~ 43,418.60 -----
Net Ordinary Income -14,656.50 -14,858.50
Net Income -14,658.60 -14,858.60
Page 1
Midwest Thoroughbreds financials for Pennsylvania operations - 2010
Race Record Penn National Presque Isle Downs Pane Race Track
Income
Purses at Penn National Purses at Presque Isle Downs Pane Purses Claimed Horses (PIO) Claimed Horses (Pane) Total Income
Expenses
Training (PIO) Training (PENN) Feed (PIO) Feed (PENN) Vet (PIO) Vet (PENN) Blacksmith (PIO) Blacksmith (PENN) Employees (prO) Employees (PENN) Jockeys (prO) Jockeys (PENN) Track Photos (PIO) Track Photos (PENN) Hay Horse Claims Stud Fees
Net Income/Loss
Starts
162 215 21
398
$ 552,650 $ 1,023,022 $ 88,720 $ 35,000 $ 20,000
$ 247,500 $ 210,000 $ 350,000 $ 280,000 $ 120,000 $ 90,000 $ 15,000 $ 15,000 $ 250,750 $ 243,200 $ 90,985 $ 50,521 $ 2,871 $ 1,764 $ 225,000 $ 167,000
~ 141000
1st 2nd 3rd Win % In$% Purse EarnJngs
31 27 16 19% 46% $ 552,650 65 45 32 30% 66% $ 1,023,022
~ ~ 6 19% 43% $ 88£720 100 15 50 25% 57% $1,664,392
$ 1,719,392
$ (2,373,591)
$ (654,199)
Owner_ExporLqry
Tommy town Thoroughbreds LLC 2010 PA Business Summary
li2r§! lmIs R!!2 E!n!!h ~ "'OCM~P'I'T Starts l!l ~ 3rd
Shelly Kay PEN 1/812010 1 $12,000 $ 1,200 1
Mlnlsterswildrlde PEN 11912010 6 $200 $ 75 1
Now and Zen PEN 11912010 3 $2.970 $ 149 1 Excesslvelypatlent PEN 1/2012010 2 $3,400 $ 170 1 Island Wild Cat PEN 1/2012010 8 $200 $ 75 1 Shelly Kay PEN 1/2212010 6 $200 $ 75 1
Mlnlstersvl1ldrlde PEN 1/23/2010 3 $1.980 $ 99 1
NowanelZen PEN 1123/2010 5 $1,080 $ 75 1
Mlnlsterswlldride PEN 212012010 9 $200 $ 75 1
Boot the Boss PEN 3/612010 1 $21,600 $ 2,160 1
Boot the Boss PEN 3/31/2010 7 $200 $ 75 1 Star Redeemer PEN 4/14/2010 4 $2,280 S 75 1
Yes No Whatever PEN 4/1412010 6 $200 $ 75 1
Boot the Boss PEN 412112010 3 $4,180 $ 209 1 Star Redeemer PEN 4128/2010 2 $6,800 $ 340 1
Fund the Minister PEN 517/2010 1 $12,000 $ 1,200 1
Boot the Boss PEN 5/19/2010 1 $20,400 $ 2,040 1
Now and Zen PEN 5125/2010 1 $19,200 $ 1,920 1
Star Redeemer PEN 512712010 5 S1,020 S 75 1
Boot the Boss PEN 81112010 5 $840 $ 75 1 MinIsters Altarboy PEN 614/2010 3 $3,520 $ 176 1
NowsndZen PEN 611812010 1 $20,400 $ 2,040 1
Miss Dolce PEN 6/18/2010 1 $20,400 $ 2,040 1
Henry the Minister PEN 7/612010 7 $200 $ 75 1
Ministers Allarboy PEN 7n12010 4 $1,920 $ 75 1
Shesgoinghollywood PEN 718/2010 5 $960 S 75 1 Boot (he Boss PEN 711412010 1 $20,400 $ 2,040 1 Unnea PEN 7114/2010 1 $21,600 $ 2,160 1 Fund the Minister PEN 711612010 7 $200 $ 75 1 Henry the MInister PEN 7117/2010 4 S1,860 $ 75 1 Unnea PEN 7/30/2010 4 $6,000 $ 75 1 Boot the Boss PEN 8/1212010 1 $21,600 $ 2,160 1 Fund the MinIster PEN 8/2012010 5 $360 $ 75 1 Ministers Allarboy PEN 8/21/2010 6 $450 $ 75 1 MinIsters Allarboy PEN 9/212010 3 $1,430 $ 72 t Fund the Minister PEN 913/2010 1 $7,200 $ 720 1 Henry the Minister PEN 91912010 8 $200 $ 75 1 Ministers Altarboy PEN 911112010 8 $200 $ 75 1 Shesgolnghoflywood PEN 10/8/2010 1 $7,800 $ 780 1 Banker Bal/out PEN 10/2212010 3 52,530 $ 75 1 Shesgolnghollywood PEN 10/2712010 2 $2,400 $ 120 1 Shesgolnghollywood PEN 1111312010 6 $200 $ 75 1 Banker Bal/out PEN 11/1812010 4 $1,380 $ 75 1 Banker Bailout PEN 1218/2010 1 $10,200 $ 1,020 1 Now and Zen PHA 312212010 1 $16,200 $ 1,620 1 Fund the Minister PHA 5128/2010 4 $1,380 $ 75 1 Fund the MInIster PHA 6114/2010 6 $150 $ 75 1 Linnea PHA 6/21/2010 1 $19,200 $ 1,920 1 Boot the Boss PHA 612812010 4 $2,640 $ 75 1 Silent Stalk PHA 7/27/2010 2 $6,400 $ 320 1 Fund the Minlsler PHA 9/1312010 11 $200 $ 75 1 He Walches Over Me PHA 10/2512010 6 ~ ~ 75 !
$ 310,730 $ 28,774 52 15 4 6
Tommytown Monthly TraIning Bills 2010 Win % 28.85% ITM% 48.08%
January S 27,196 February $ 15,450 March S 19,547 April $ 20,717 May S 31,177
. June S 35.644 July S 31,055 Aug $ 30,827 Sepl S 24,960 Oct $ 15,200 Nov $ 10,138 Dec ~ 12533
$ 274,444
Jockey Fees $ 28,774
VelBl/Is S 33.621.70
Total Expenses to Race In PA $ 336,840
Net Loss ($ Impotted Inlo PA Ag economy) $ (26,110)
Page 1
410+.885+ 593.~ 09:57:48 a.m. 03-01-2012 2/3
. .~'. . . .' ... ',." . .. . ~ . ~ . . . '," "" "''' ... ·.'I.l • • f '':.,
P.O. BOX 95 • PEACH BOTTOM, PA 17563
March 1,2012
Han. Tom Corbett Office of the Governor 225 Main Capitol Building Harrisburg, PA 17120
Han. Lloyd K. Smucker 185 Main Capitol Senate Box 203013 Harrisburg, PA 17120-3013
Han. Bryan Cutler 147 A East Wing PO Box 202100 Harrisburg, PA 17120-2100
Dear Sirs,
TEL 717.548.3401 FAX 717.548.3429
ill f, )@nort1wie\vsta1lions,com \\ ww. north \~ewstflIIiOI1 S, cO III
I am the principal owner of North view Stallion Station in Peach Bottom, Lancaster County. I have been involved in the thoroughbred racing business for 30 years and am proud of the fact that Northview PA is the leading thoroughbred stallion farm in Pennsylvania. Of note, Smarty Jones, the Pennsylvania-Bred winner of the 2004 Kentucky Derby, is now based at Northview PA along with four other leading Pennsylvania stallions. The stallions at Northview PA arc not only leaders in Pennsylvania but are prominent sires on the national stage.
I am writing to express my profound concern regarding the Governor's plan to deprive the Race Horse Development Fund of$72 million going forward. This will be a devastating blow to the horse racing industry; it will have a major impact on my business and all of the related businesses that support our farm.
I bought what is now Northview PA in 2007 and have spent over $5,800,000 million thus far, to establish it as the premier stallion farm in the state. We have built six state of the art barns at a cost of: $3,000,000, we have put in 12 miles of fencing at a cost of: $165,000 and have purchased $175,000 in equipment to manage the property. The total amount of investment to date including property, improvements and stallions has been: $8,900,000.
In addition, there are II employees at the farm with an annual payroll of$426,500. Northview PA also rents five local homes for these employees. We spend $600,000 per year on hay, feed and other supplies which are predominately purchased from Pennsylvania farmers and vendors. Our repairs and maintenance
410,1-885+ S~S 09:58:07 a.m. 03-01-2012
are $200 .. $300,000 per year and we create hundreds of thousands of dollars of income for the . veterinarians that invoice our clients.
The decision to invest in Pennsylvania was due to the passage of ACT 71 in 2004. Pennsylvania seemed to be committed to revitalizing the racing and breeding industries and I made a long-tenn commitment to invest in the state and help grow the racing industry. Governor Corbett's 2010 campaign statements, supporting a strong thoroughbred racing industry in Pennsylvania, provided me with the confidence to make further investments in 2011 whioh resulted in the purchase of several more top stallions.
If the Governor's proposed budget is adopted the 30% decline in the Racing Fund will cause a significant drop in the number of mares sent to my fann and many other farms in the state. Top quality mares and stallions will move to neighboring states suoh as Maryland and New York and many fanns will go out of business. In addition, horsemen around the country will lose confidence in Pennsylvania's commitment to the racing industry further eroding the business environment and leading to the Jong-tenn decline of racing and breeding in the state.
A stable and secure Racing Fund is critical for all participants in the industry. Many fann operators such as I made investments based on the beJiefthat the Governors office and Legislature would honor Act 71. Now that this is threatened, the entire industry is vulnerable along with thousands of jobs at farms and the race tracks across the state. .
ACT 71 successfully strengthened horse racing in Pennsylvania. Please do not destroy everything we have achieved over the past six years, while at the same time our neighbors in New York and Maryland, are moving forward. .
Thank you for your attention to this matter and I would welcome the opportunity to discuss these issues in further detail.
~~E Richard Golden President
co:
Hon. George Greig, D~partment of Ag~jculture
..
3/3
'horoughbred Horsemen's Association Standardbred Breeders Associat ion ofPa .• Pa. Horse Breeders Association
Meadows Standardbred Owners Associat ion· Horsemen's Benevolent & Protective Associat i011
March 5, 2012 Contact: Pete Peterson (215) 893-4297 (215) 990-8928
Pa. Equine Coalition Responds to Inaccurate Claims by Governor Corbett, Agriculture Secretary Greig on Pa. Horse Racing
Project job losses of J 0, 000 10 15, 000 due 10 $72 million raid of Race Horse Development Fund
HARRISBURG, PA - The Pennsylvania Equine Coalition, a statewide group representing more than 10,000 trainers, owners and breeders of the 110rseracing industry in PelUlsylvania, today called on Governor Tom Corbett and Agriculture Secretary George Greig to stick to the facts when discussing the Governor's proposed raid of the Race Horse Development Fund of $72 million alUlllally.
In an interview Thursday with PCN, Secretary Greig, who admitted in May 2011 that "I don't know much about the horse and harness racing part of agriculture," made a number of inaccurate claims about the Race Horse Development Fund that demonstrated an alarming lack of understanding of the program. Greig incorrectly stated that the funds being transferred from the Race Horse Development Fund to other programs are "just surplus funds that are in an account" and that the program was "generating an excess of funding" that "exceeded the realm of what they thought it was going to produce." In an interview Tuesday with DelUlY Logan of WINK 104 in Harrisburg, Governor Corbett made similar claims, saying there would be an "abundant" amount of money left over for purses, prompting the radio host to tell him that was a "mischaracterization of reality."
"Either Secretary Greig and Governor Corbett are being disingenuous with Pe!U1sylvanians or they trul y do not understand how the Race Horse Development Fund or the horse racing and breeding industries in the state operate," said Salvatore M. DeBunda, President of the Pennsylvania Thoroughbred Horsemen's Association. "Estimates prepared at the time of the passage of Act 71 in 2004 -- which established the Race Horse Development Fund to create a robust horse racing and breeding industry in Pennsylvania -- projected weekly receipts to the fund of between $4.4 million at the low point and $6.2 million at the peak. We are currently at about $4.5 million per week over the course of the past 9 weeks. This is in no way, shape or form a surplus or excess funding and is actuall y in the very low range of projections."
Based upon Govelnor Corbetfs own budget figures, funds available to the horse racing and breeding industry for the 2012-2013 fiscal year will drop to $3.2 nlillion pel' week after the diversion of an already planned $49 IlliIlion to the general fund and Govelnor Corbett's proposal to transfer an additional $72 lnilli011 to fund other progranls. This would leave funding 30 percent below what was projected to be available to the industry at the Race Horse Development Fund's lowest point.
The Equine Coalition also took issue vvith what they said are overly optinlistic projected receipts for the Race Horse Development Fund, noting that receipts to the fund do not increase just because statewide slots revenues increase. In reality, the receipts to the Race Horse Development Fund are calculated based upon the slot revenues at the 1I0si l'acell'(lck which can be negatively impacted by competition within those facilities, such as table games, from competition fronl other casinos in Pennsylvania, and fi'om casinos in neighboring states.
Gove1110r Corbetfs claitn that the horse racing and breeding industries "win be able to survive" also delnonstrates a profound lack of conceln about the tremendous job losses that will occur in the industry should his cuts be approved by the legislature.
"For a budget address that was in large part focused onjobs and the economy, Governor Corbett seenlS to have little concern about the 10,000 to 15,000 Pennsylvania jobs that could be lost as a result of these cuts," said Kim Hankins, Executive Director of the Meadows Standardbred Owners Association. "Horse owners, trainers, breeders and others canle to Pennsylvania and started businesses here with the expectation that breeders awards and purses would be at a level where they could Inake a return on their investtnent. These cuts would mean Pe1ll1sylvania will no longer be competitive and we will see an exodus of jobs to neighboring states, which are actually taking steps to increase funds available to the industry. At the sanle tilne, all of the ancillary and support businesses that service the racing and breeding industries in Pennsylvania will take a hit, including farmers who supply feed, veterinarians who care for the horses, drivers, equipment suppliers, and horse farms who stable the horses. The ripple effect tlu-oughout the agriculture industry will be devastating."
The Pelll1sylvania Equine Coalition is a statewide group representing lnore than 10,000 owners, trainers, and breeders of the horseracing industry in Pennsylvania. Mell1bers of the coalition include the Pennsylvania Halness I-Iorselnen's Association, the PelU1sylvania Thoroughbred Horselnen's Association, the Standardbred Breeders Association of Pennsylvania, the Pennsylvania Horse Breeders Association, the Meadows Standardbred Owners Association, and the Pennsylvania I-Iorselnen's Benevolent & Protective Association.
February 7,2012 Contact: Pete Peterson (215) 893-4297 (215) 990-8928
Corbett Budget: Promises Made, Promises Broken $72 million annual raid on Race Horse Development Fund will devastate horse racing
and breeding and cost jobs in an industl), that Corbett made a campaign pledge to support
HARRISBURG, PA - The Pennsylvania Equine Coalition, a statewide group representing more than 10,000 trainers, owners and breeders of the horseracing industry in PelUlsylvania, said today that Governor Tom Corbett's scheme to raid the Race Horse Development Fund by $72 million for each of the next three years will be a devastating blow to the horse racing and breeding industty that candidate Corbett pledged to support on the campaign trail. With the racing and equine industry employing more than 23,000 Pennsylvanians, these cuts will result in significant job losses across the state.
Leaders of the Pennsylvania racing industry said the move represents a major reversal from Governor Corbett's campaign promise to support the legislative goals of the PelUlsylvania Race Horse Development Act, which included enhancing live horse racing and breeding programs in the Comlllonwealth. Corbett's also pledged to "ensure support for the Pennsylvania Horse and Harness racing programs" and said his Administration would "work closely with the racing industlY organizations to prolllote conUllOnwealth racing as an integral part ofPelIDsylvania agriculture, tourism and cultural heritage."
"This budget is not supp011ing the hOJ'se racing industJ), in PelUlsylvania - it's gutting it," said Todd Mostoller, Executive Director of the PelUlsylvania Horsemen's Benevolent and Protective Association. "In one fell swoop, the Governor' s budget cut will decimate the progress made by the industry in a!1racting new businesses and preserving open space, creating jobs, and providing health care benefits fOJ' Pennsylvanians. Raiding the fund demonstrates a clear lack of suppoli for a major economic driver within the agricultural economy of the state."
"Coming on top of an already planned $47 million transfer from the Race Horse Development Fund to the state's General Fund, we are now looking at a roughly $120 million loss in the 20J2-2013 fisca l year," said Ron Batoni, Executive Director ofthe Pelmsylvania Hal1less Horsemen's Association. "That means a significant decrease in purses, which are used to pay everyone from blacksmiths to veterinarians to stable hands. Trainers and owners who brought thei r horses and businesses to PelUlsylvania with the expectation of competing for a ce11ainlevel of purses are
going to pull up stakes and make their investments elsewhere. Sadly, they won't be backbecause they are not going to have any faith or tlust in our elected officials."
"In his budget address, Governor Corbett said a top priority was job creation, but this budget gimmick will costs thousands ofPelUlsylvanians in the agriculture and service industries their jobs," said Salvatore M. DeBunda, Esquire, President of the PelUlsylvania Thoroughbred Horseman's Association, who noted the job loss projection were based on an economic impact study prepared by The Innovation Group in 2011. "These cuts will discourage continued investment in our state, resulting in the loss of precious open space now being used by horse fanns."
"The timing couldn't be worse as the New York breeding program is attracting horselnen from across the country due to the introduction of slots in October of2011. lfthe proposed budget is adopted, it will result in horsemen leaving the state and a subsequent loss in jobs," said Jeb Hannum, Executive Secretary of the Pennsylvania Horse Breeders Association. "Racing and breeding are significant economic drivers in the state which support over 20,000 jobs. TIus is a $1 billion industry which supports luraI cOlnnlunities and the state's agricultural economy. The Govelnor runs the lisk of driving good jobs to Maryland and New York and hanning PelUlsylvania's agricultural fabric as a result."
"These cuts will only hurt efforts to jtunpstart the Pe1ll1sylvania economy," said David Pruslmok, President of the Standardbred Breeders Association of Pennsylvania. "Families across the Commonwealth will see a significant loss in the anlount afmoney they earn each year, including farmers producing feed, blacksmiths, veterinarians, trainers, groomers, and countless other Pennsylvanians who provide services to the racing and breeding industry."
"Owners, trainers and breeders have invested millions of dollars ill Pe1U1sylvania with the legislative promise that horse racing would provide a good retuln on their investtnent," said Kim Hankins, Executive Director of the Meadows Standarbred Owners Association. "It is unfathOll1able that the Govell1or now wants to stifle the growth of tlus still enlerging industry that helps fund the economic impact of agriculture, the number one industry in the Commonwealth. Given the competition of West Virginia gaming and Ohio gaming on the horizon, these cuts in the Race Horse Development Fund ,,,ill be disastrous to racing at the Meadows."
"When the legislature legalized gaming in PelUlsylvania, their prinlary stated goals were to save the horse racing and breeding industry, boost the state's agricultural sector, and provide for the health and pension benefits oftl'ainers and other elnployed by the industry," said DeBullda, ,vhose organization -- the Pennsylvania Thoroughbred Horseman's Association -- represents the owners and trainers at Parx Racetrack. "At Parx Racing alone, we estimate an $80,000 decrease in the purses awarded per day, a substantial reduction in breeder awards for Pennsylvania-breds, and a significant reduction in health and pension benefits for our Inembers, all of which will negatively impact the Pelll1sylvania economy. These cuts will discourage owners, trainers, and jockeys from continuing to participate in the Pennsylvania horse racing industry and could jeopardize the continuation of the PeIll1sylvania Derby and the Cotillion Stakes, which was recently named Pennsylvania's first and only Grade I Stakes race."
A study prepal'ed by The Innovation Group found that every $1 in direct spending within the racing industry equates to $2.13 in total spending \vithin the Pennsylvania economy, resulting in an atmual state economic impact of $490 million.
The Pennsylvania Equine Coalition is a statewide group representing more than 10,000 owners and trainers of the horseracing industry in Pennsylvania. Members of the coalition include the Pennsylvania Harness Horsemen's Association, the Pennsylvania Thoroughbred Horsemen's Association, the Standardbred Breeders Association of Pennsylvania, the PelU1sylvania Horse Breeders Association, the Meadows Standardbred Owners Association, and the Pennsylvania Horsemen's Benevolent & Protective Association.
State budget brings questions at Hanover Shoe Farms
News that Gov. CO"bett wal1ts to divert s lot s ,'eve l1l1e has lef t loca l f a l'lns ,'eelillg . By TIM PRUDENTE The Eyenlng Sun Posted : 02/1 8/2012 09 :28 :33 PM EST
_ _ _ __ _ ......... ,. ~~, tw
veterinari cm Courtney Pi n l ~ , Ic ft, and assistant Amanda Curto injec t antibodies to prevent pneu llloni(l in (I
nedy born racehorse . The Hanover breeder is considering cu tting back oper<ltio llS in response to the governor 5 plan to shift fl lnding away from the sta te 5 horse raci ng industry. (THE EVENING SUN CLARE BECI(ER)
Decades of breeding and training racehorses show In Jim Simpson's hands . Both are heavy and weathered. He plunges one Into a bucket of feed , breaking between his fingers the pellets of alfalfa, grain and soy - all of it rich and dark and earthy.
All of it was grown by Pennsylvania farmers and bought by Hanover Shoe Farms. Inside the farm's stables, the straw Is scattered about the floor In clumps. More than 1,000 tons are bought locally each year.
Ninety employees work there, some third -generation horse grooms. The farm has a payroll of $2.2 mIllion and no one has ever been laid off. Never,
Simpson says this with pride,
But the governor's budget plans threaten that reputation .
Simpson
Horse groom Armando Lopez stands next to a horse BECI(ER)
oe\','oorn filly at Hanover Shoe Fnrllls. (THE EVENING SUN CLARE
says the Standardbred breeding farm would have to shrink back operations if plans go through to divert $72 million in slots revenue away from the state's horse racing Industry. Analysts predict the move wou ld cut prize winnings ca iled purses by 30 percent.
"Purses are the lifeblood of the industry, If purse dollars are cut there's less demand for horses," Simpson said. "I don't see anyway around it. We'd have to get smaller, But If you cut something that much, J don't see what Industry can stand that."
Breeders are outraged over the budget plans proposed by Gov. Tom Corbett . Some say It accounts to "raiding" slots revenues designated for horse racing.
Slots legislation passed seven years ago with the promise tha t 11 percent of revenues would be used to bolster the racing industry. But under Corbett's proposal, prize winnings are expected to decrease by more than $50 million in the fi rst year,
Simpson shakes his head and says the cuts would be devastating for rural communities, Some breeders buy more than $100,000 of hay locally each year. Hanover Shoe Farms buys grain from lIttlesto'r'lIl. Its trucks are repaIred at Earle Black's Garage In Hanover, Millions of dollars are pumped into local businesses.
"We thought
A sample of feed used at Hanover Shoe Farms. The business spends millions of dollars each year to huy grc1 in (Inc! hHY from local farmers, Q\'mer Jim Simpson said. (THE EVENING SUN CLARE BECKER)
what we could depend on what was legislated," Simpson said. "We don't know why we're beIng singled out now."
The proposal
Gov. Corbett wants to shIft millions of dollars Into agricultural research, the University of Pennsylvania's veterinary school and state faIrs. News of the plan came earlJer th is month when the governor unvei led a $27. 1 billion state budget blueprint.
The proposal comes after Gov. Ed Rendell's administration required three years ago that nearly $50 million be transferred annually Into the state General Fund through June 2013 to help ease budget pressures. Corbett's proposal would result in nearly $120 million being diverted from the racing fund In the year that starts July 1.
This would mean a cut of about $52.5 million to purses.
Still, Corbett's office predicts the boom of the Pennsylvania gaming industry wil l restore the purses In about three years.
Slots revenues increased by $131 million last year, a 5.8 percent increase from 2010. Similarly, Pennsylvania 's 11th casino will open next month adding 600 slot machines near King of Prussia.
Even If the plan goes through, purses will be ahead $2.2 million in fiscal year 2014·15, according to predictions from Corbett's office.
But such predictions haven't conv inced the cadre of breeders and lobbyists who are calling tile plan an "attack" on the industry.
The first year of the funding shift/ the average purse at the Parx Casino In Bensalem is expected to decrease from about $27/000 to $17,000. The average purse at Penn National Race Course north of Harrisburg is expected to fall from $20,000 to $14,400. And the average purse at Presque Isle Downs and Casino south of Erie would decrease from $23, 750 to $14,750.
"Purses fuel the Industry. If the demand Is cut back, it will decrease our need to produce horses," said Simpson.
Fewer horses mean the Hanover farm is buying less grain from Littlestown and spending less among other local businesses, Simpson added.
Statewide, the horse racing Industry is responsib le for 23 ,000 jobs. I t Injects millions of dollars into the Pennsylvania economy each year, according to the Pennsylvania Equine Coalition.
Ron Battoni, executive director of the
Farms President Jim Simpson ciiscusses the governor s plan to redirect slots revenues av,ay from the horse racing industry. The move is expecled to decrease dema nd for the racehorses lhat Simpson breeds. (THE EVENING SUN CLARE BECKER)
Pennsylvania Harness Horsemen's Association, says the plan would discourage breeders from moving to the state.
"Trainers and owners who brought their horses and bUSinesses to Pennsylvania with the expectation of competing for a certain level of purses are going to pull up stakes and make their Investments elsewhere," he said.
Stalled plans
At Hanover Shoe Farms, the wooden frame of a barn stands unfinished In a muddy paddock. Construction was under way and hopes were high before the budget plan crashed down.
The farm's satellite operation in New Jersey was being relocated to Pennsylvania . And the new barn is being constructed for two
promising stallions, Cam's Card Shark and Western Ideal, who were moved to the 3,OOO-acre property. Simpson says the barn will be completed, though the governor's announcement has caused him to delay further action. Similar hesitations are seen rippling through the state. Plans to relocate Diamond Creek Farm In Kentucky to the commonwealth have also stalled.
Adam Bowden learned the breeding business as an Intern at Hanover Shoe Farms. Three months ago he purchased a 191-acre breeding farm outside Dillsburg to be the new home for Diamond Creek Farm. The plan was to move his entire operation over the next few years.
lilt's quite an Investment to start up a new farm, and to be rocked by this news really makes me rethink a full move, II he said.
Just a few months ago, Pennsylvania appeared attractive to breeders. Unlike many neighboring states, gaming legislation promised racing purses would be bolstered by slots revenues. New casinos are springing up and gaming revenues were soaring so the possibilities appeared limitless.
"If we knew this could all change, we would have sat on our hands". Bowden said. "The uncertainty of It all makes me hesitant."
Lobbyists claim Corbett is breaking campaign promises to support the Industry. But Corbett's spokesman, Kevin Harley, disagrees. He says that Corbett pledged only to promote the industry through educational venues such as agricultural fairs.
"He never made a commitment of financial support," Harley said, citing the state's ongOing budget problems.
Still, breeders like Bowden and Simpson remain uneasy.
In Hanover, now, it's raining and Simpson looks long at the barn half-built in the mud. The prized stallions are nowhere in sight.
So he turns away to slosh back through the mud, saying he hopes to new barn won't be left standing empty.
Kace Mrse owners feel let down I The Times Leader, Wilkes-Barre, Scranton PA - News Page I of6
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~ Q.,AAH SALES
~'lolldayl March 5, 2012 f I... S!arch
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ID. H~~ Fea turos Poople Opinion Video About Us Cl8$sificu Ads
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Race h or se ownel'S feel let down Industry feels Go,'. Tom Co rbett's actions to d i\'el' t money for pUl'ses in budget plnn AI'C IU\I"lll ful. 5y Sf",. tlC'(;~f$ly 'mx .. r.:'~~'me'! '~ .. du"WT1
LUleme Cc:.m!y Rtf-Mer I rlSlfl"e ' /t;.Cltr:J.)·c , Fp',L-:~J,. I I 'I!' TLS!~, .. !, ~x.t: (y ' I) T,\;!:f-I
LEH~,1AN TV\'P, - Afler inve$!;ng nearly a hajf,ml~lon dcllaTS in his hOf~e farm. stab~e
a .... ner Stsve S:e~erno feels belraysd by GOI', Tom Corbell I:nd a de c ; ~lon he be:ie~'e s v,ill
hurt horn' ratir'll L1 Pennsylvania
"\\'e made n pretty big lm-05lmenl hera and thoughl I'd have
more Umo 10 pay llofflhan five or six yeau;: Salemo sa!dof
1M ; 1,zCfe horso farm In Lehman TO'J.ll5h'p h£- boui/hl ~jx
years ago
The gO'IIHnor'& 2012·1 3 budgot proposst. re:!!<lsed Tuesday.
Includes the c!Lvel$!tln of $72 mJI(on from the Horse Ra~
Deve:oprn!!nl Fund Ie hc!lp balance the budget
ThaI's on top of ebout ~I\ 1 miuion a:rea>:sy ba:ng diverted from
Ihe (und annuelly for thO ~ame purpose. a pr<l{~ee that begen
during GO·I . Ed ReMen cdmlnislIalion In 2009 and Is sel lo
continuo through June 2013.
The fund was crealed In the Recehorso Oeva!opmenl end
g am'va Act of 2004. \',hlch authorizEd 1M p!acement of ~Iol machines al horse racetrr.cks and then yel,\o,be-bu;!t ca!:nos
The e~t mer-daled thai !!ol rovenue \'.oo!d be llSed for several
6,tfe,enl purposes, tuch as property la)( l e:iel, lo ,·.hlth 3<1 percenl 01 Iha tax Is ded.taled
The horse racing Industry. wh'ch was oxpocleu 10 1050
gamb'ing rs\'enue ",i!h!he sdd"iUon of s!ols. was to receive 12 percent of !hll gross tax re·/enw:!.
Of the S2.35 b:flioc in gross s!Oj re'/enuo generated in 20 10,1 1, tho R.;ce Horse Deve:apmen\ Fund was 10 receive about S275
mlklon I,~ost of that m:mEI- 80 percenl- \"las 10 be used 10 re lsa purses tht:! horse 0"1."1'1;3(5. tra'n;r, end JOCk'!ys w:n
10 tlIJ$e his stab:n il Pann~y\Yania·. hOISt ratinalmJu1!1y sufft A b~UlUft' cA wtl Go'/ Tom CoJb.t t ls ~",op"s:n"
FETE G \'.'1LCOY./THE Tf.'.~ES LEADER
Irs Ihose larger purses, Sa'erno 5a:d. Ihlil allracled mOle
" oa.'!' o,~ners 10 race Mra. aswCi!l es 10 buy, breed <lnd tr21n
!heir horses in tha slal& And \·.h~ e the induslry has been drying up In some sia!es. 6I.Jch
as Nsw Jersey. irs teen gro·.·.fng In Pennsj'iven1a, he ~a~d
Calmine Fusco srm thaI t.:oh&gan Sun ot POCOliO Do.-.TIS In Pla:ns Towmh1p was one of
the top recetrecks In the Cl)un~ and 11"181 lop breeders and cr:melS Wllr6 floc.:.ong 10 the slal&
He gol a group 0/ Investors to~ethl!r a coup:o of years ago and is sel to open t,~s $5
m:Uon Cambria Farm eqU:n!llrein'ng c-'!ntcr In V.IM Gap - less tha.1 60 mi:es from both
Pocono OO·.·."ns end H2lTah's Chesler Cas:n~ and RaCfilrack - on 1,larch 1,
"This infi~x of (S!ol) moo9j' was prom'sed and granled You drsw the 101' O",':ners here. Ihe
top bred horse s ! o~d last rear were Pennsj'lvania,bred: Fusco n~d "Fa; 11"19 90','ernor to turn around and do this ... irs a'mosl liile falso ad'le[1Jserr.enl 'Come to PA, 1'.",,·r6 offering
this .. .' DtI ~'ers. c':.nelS, bleeders. you pu'l Ih~m s'l in and. cnC3 th ey gel here. you pull the carpel out '
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http://www.timesleader.com/news/Race JlOrse_ owners _feel_let _ clOWIl_ 02-1 2-20 12.hlllll 3/5/2012
1\.'''''' Hurse owners reel let down I The Times Leader, Wilkes-Barre, Scranton PA - News Page 2 of 6
Sa!emo $5~d 11'6 nol on:y O'/,TI6fS of sleb!es and equine Iteining cenlers \'.h~ will be hurt If racers slart !hying away from PennsylvanIa beC6u~e oll!ma'ier \',1noo,s' purs-ss. · l~1 blacl\smllhs, loca! velerinaliafl5, feed mi~ s, Hi,., nfDs. mechan!cs -lhey\'a all made b;g in'{oslmenls here,' he sa!d
0' pul a 101 of money Into the erea. But if tho plug gels pulled, r won', be ab!e to con~nua and II! have 10 fllld some",vhera else to £0. I Ii);" it hetB. Bul Without the re':;ng al!.h9 lavel irs baM 8t, r I'.'on" be eb!a 10 slay. If the purses go e:."Isy, !hal ' ... ill dry up e Jol of my business: says Salerno, \',ho no'.'l boards horses from Cenada, Flotfda, New Jersey and elsil .... ilore.
Ron Sattonl, executive (f re<lor of lila Penmylvenla Harness Horseman's Association, sa:.! cuts 10 the Horse Race Dov~lopmer.t Fun~ v,in meen a s!grlificanl de~fease In pur!es thaI 016 used ' to pay uVBryone 110m blal;ksmit/1s 10 velerlmHlens to Glob!e hands,
' Trs~nels &n~ o-,-,ners who broughl lh!!( hOlses and bU5 :n~SSGs 10 PaMsyivcn'a with Lh~ ex~ectatiofi 01 competinp for a certain IEv;!1 01 pUlses ole go!ng lo pUll up stakes and make their Investments elw .... hero. Sed:y, they \',on', be b"ck, beCaUH! thoy aro not going to ha':e any faith or INstln au: e!ected offidals: Sallon] sa!d.
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http://www.timesleacier.com/nelvs/Race JlOrse_owners_feel_let_ down_ 02- 12-20 12.html 3/512012
WvvU,," VUJCvt tV ralumg or I'a. Illllet - Plttsbt1l'gh Tribune-Review Page 1 of2
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Home I flows I SportG A & E UfOltyjDS BusIness OpInion Things. 10 do Your To'.'m Photos (;lall!f'\Ks Auto! Rul E'l:Il~ Jot.s Tl lbSICHt
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Breeders object to raiding of Pa. fund By BrBd Bumsle.d, TRIBUNE·REVIEW Thursday, Februery a, 2012
About the writer
~ Brad Bums/cd is
(. the Tribune-" , RCI'i81-tS stale
Capitol rcporler and can be reached at 717-787-1405. via c·mail oron TlI·iCier.
Ways to get us
ID Be-. F~ t~!)<)¢kfln ~ FolloWUI o n T..,Utr
~ E.fT\III I t;~....,I~It"rs i 10n )'ourmobll,
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HARRISBURG - Tom McClay docsn't have much use for pO!iUdans_
McClay. a Hershoy horse breeder, seys II may be time to fold his business no\'l thai Gov. Tom Corbell Is propoSIng 10 "raid' a 5101 machlne·fueled development fund thai \'las t:slablished 10 bolsler the horsa racing lnduslty under Ihe 2004 caslno la\'l.
"/'II lace In another stele or gel oul of IhO business; McClay said. 'U Ihls weren'l Iho slale of Pennsylvania and if someone did \his 10 me In business, I'd sue lhcm,~ said t,kClay, 62. who buill his business of Pennsylvania-bred horsos based on promises the steto made In 2004.
McClay Is one of the breeders. owners and trainers who say they are upSCll'lilh COrbB\I'S pJoposal to lake $72 million for each of Ihe nexllhree years Irom Ihe Race Horse Developmenl Fund. Tho fund \'las Intended to Increase purses in horse racing, atlrac;t induslty 10 Pennsylvania and croale Jobs.
Proponents of expanded gambling made It a major selling point when promoting the law_ "The only reason gaming got passed \'las horse raGing; said Kim Hankins. executive diractor orlhe Meadows Siandardbred Owners AssodaUon.
The Pennsylvania Equine Coalition. whIch represents aboul 10,000 peopla In the Industry. said laking Iho money \'Ioul::J bo a -devastating blol'l" lo conlinued growth of Pennsylvania horse breading and racing.
The money Is needed to address ~Important priorHles of Iho commonweallh" in agricullure and veterinary research, which slill benefit the horse racing industry, said Charles Zogby. CorbeU's budget saCfetary. There sUIl \'Iill be S166 million In tho fund for purses, a breeder's fund and pension benefits, said Susan Hooper, Zogby's spokeswoman.
In the 201 2-13 budget. Zogby said Iho fund would pay $44.7 miUlon to Agriculture Rosearch and ExtensIon; S28.5 mm/on to Iho University of Pennsylvania for velerinary adivitles: S236.OOO for the Veterinary Center for Inleclious Diseases at lhe university of Pennsylvania: and $874,000 10 Pennsylvania faIrs.
-It's going 10 have a huge impact on my bus!ness; said John Servis of Bucks County. who trained 2004 Kentucky Derby and Praal:ness winner Smarty Jones.
Hankins saId Ihe mone}' would amount 10 about a 30 percenl reduction in purses 2nd In a horsemen's rotirement fund.
"To us. 11 would be B huge slep backwards," sal c:! Mark Weaver of WashIngton, co-owner 01 a company that races hOises allho Meadows Racetrack eo Casino In Washinglon County.
The slalo has put S1 billlon Inlo the horse race fund sinCt; the slate legalired slots, according to the Pennsylvania Gaming Control 80ard. In 2010-1 1, S2:28 mlllion from slo\s wenllnlo the fund.
~There seems to bo a general myth among legislators Ihat Ihere Is Just a pet of money silling out there. bul every denar thai 9::1e5 Into the fund Is transferrec:! oul for broeders' Incentives. 10 fund tho purses, et celaffi,R said Pete Pol6rson. a spoi:esman for the Equine Coalition.
"There also seems to be e myth [hat purses all go 10 people from outside 01 Pennsylvania," Palarson added. "Thai's nol lhe case. Thai money Is spent and relnveste:! here In Pennsylv.:;nla.·
Karl Andren confIfbu/ed.
f 1-,-~a~,mont Country C: b 10 play hOSi io Kerr
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fOf faD ro\'eal 3. Project al Carnegie 1,lallon Is 10 put a robOt
00 moon 4. Siolen wheeldlalr Irom New Kensington
man found heaVIly damagN 5. Wont 10 make Nm'l Kensinglon beitel,
fairer fi lls II[etime 6. Salauin firefighter pu:JS fa'ien paM€( 10
salely alter nPOl" COllapses 7. Tails bar access 10 Wes!moreiantJ N6W
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.. ______ J _ _ ____ . _ ____ --1
http://www.pittsburgh!ive.com/x/pittsburghtrib/newsiregiollalls_780757.htm! 3/5/2012
Gov. Tom Corbett's plan to raid racehorse fund would kill industry, breeders say
p'ennlive .com
Gov. Tom Corbett's plan to raid racehorse fund would kill industry, breeders say
Page 1 of3
Published: Wednesday, February 08, 201 2, 6:22 PM Updated : Wednesday, February 08, 2012,10:52 PM
pN By MONICA VON DOBENECK, The Patriot-News
Horse breeder Tom McCl ay says he has invested $3 million 111 the state over the past t wo years because
Pennsylvan ia had some of the best purses and breeder incentives In the racehorse Industry.
Now, he says, he's outta here.
Since Gov. Tom Corbett suggested
siphoning $72 mill ion from the Race Horse
Development Fund in his proposed
budget - on top of the $47 million taken
the last two years - the racehorse
industry will be dead, McClay sa id.
"They've effectively kil led it," he said.
"You have to run horse raCing as a
business, and they just dropped the
incentives by 25 percent. I'm not an idiot.
I know they'll be back next year, and til e
year after that."
View full size SEAN SIM~lERS, The Patriot-News
The horses leave the gate fo r the fIfth race at Penn National Race Course.
Corbett's budget proposes taking $72 million from the racehorse fun d and directing It toward other
agricultural programs, including Penn State agricultural research, University of Pennsylvania veterinarian
activ ities and county fairs. A deal in 2009 took about $47 million a yea r from the racehorse fund and sent It
to the general revenue fund instead through 2013.
Samantha Krepps, press secretary for the
state Department of Agricul ture, said the
money taken from the horse raCing fund is
being used to pay for other programs
" very important to agriculture."
http://blog.permlive.com/ll1 idstate_ impact/prinL htmi ?entry=/20 12/02/gov _ t01l1_ corbetts ..J)la... 3/5/20 J 2
VUV. 10m LomelI'S plan to raid racehorse fund would kill industty, breeders say Page 2 of3
"Research can develop cutting edge
products that help feed people, provide
jobs and help the economy," she said.
"There's still more than $130 million left
for horses in the fund, and the levels are
supposed to come back by 2013-14.
She said the proposal would still require
legislation to pass. In other words, taking
the $72 million Isn't yet legal.
~1cClay said he'll probably get out of the
business completely. If we were to
continue, he'd take his 150 horses and
move to one of the nearby states which
have used the Pennsylvania law as a
template of how best to entice the
industry. New York recently introduced
slots, accompanied by horse racing
incentives, and Ohio copied Pennsylvania's
Act 71 nearly word for word, he said.
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Enlarge CHRIS I<NIGHT, The Patriot-News
Governor Tom Corbett, gives his 2012 budget address In front of the combined PA House and Senate at the Capitol In Harrisburg Tuesday February 7, 2012. CHRIS KNIGHT, The Patriot-News
Gov. Tom Corbett's 2012 Pennsylvania State Budget Coverage
gallery (40 photos)
That's because it was a good law, according to McClay.
The legislation that brought casino gambling to Pennsylvania also set up the Race Horse Development Fund,
with 11 percent to 12 percent of slots revenue directed to the race horse industry. An early aim of casino
gambling was the effort to save horse racing.
It was successful, according to data from the state Department of Agriculture.
Purses at Pennsylvania racetracks increased from $75 million in 2001 to $700 million In 2009. At Penn
National, purses went to around $155,000 for the nine daily races, up from $50,000 pre-slots.
The money attracted more owners and breeders to the state. The Department of Agriculture last year
estimated that the slots law created 40,000 jobs in the horse racing industry and agriculture.
A study by the Innovation Group said the horse racing industry has an annual economic impact In the state
of $490 million,
Now, members of the Pennsylvania Equine Coa lition have joined forces to say that could all go away. The
coalition represents more than 10,000 owners and trainers.
hI Ip:/lblog.pennli ve.coJ1J/midstate _ilJlpact/pri nt.hlml?entry=/20 12/o2/gov _ tOI11_ corbetts .JJla... 3/5/2012
\JOV. lOln corbett's plan to raid racehorse fund would kill industry, breeders say Page 3 of3
The proposal "will be a devastating blow to the horse racing and breeding Industry that candidate Corbett
pledged to support on the campaign trail," said Pete Peterson, spokesman for the Pennsylvania Equine
Coalition.
Peterson said Corbett had pledged to promote racing as "an Integral part of Pennsylvania agriculture,
tourism and cultural heritage."
"The budget Is not supporting the horse racing Industry in Pennsylvania - it's gutting it," said Todd
Mostoller, executive director of the Pennsylvania Horsemen's Benevolent and Protective Association. "In one
fell swoop, the governor's budget will decimate the progress made by the Industry In attracting new
businesses and preserving open space, creating jobs and providing health care benefits for Pennsylvanians."
Peterson noted that the money does not come from taxpayers, but directly from slots revenue.
Peterson said members of the horse Industry had talks with state officials In 2009 about transferring $47
million to $49 million a year from the racehorse fund to the general fund Instead. Horse people were
reluctant, but went along with the plan because of the dire economic times, he said. The money Is supposed
to be restored after four years.
"We were not happy about it but we understood shared pain," he said. "Now we're faced with a $120 million
hit. The size of it is a shock."
He said the racehorse Industry has a symbiotic relationship with the casinos. The Parx Casino near
Philadelphia has said slots revenues go up on horse racing days, according to Peterson.
Fred Lipkin, spokesman for the Hollywood Casino at Penn National, said he could not immediately find
statistics on what effect the horse races have on casino gambling.
McClay is one of the biggest breeders in Pennsylvania, with his horses spread among six or seven farms,
including several near Penn National Race Course, about 15 miles east of Harrisburg.
He said he pays traIners, stable hands, blacksmiths, grooms, feed suppliers and others who could be out of
work because of the cuts. He said he's disgusted.
"This Is a rape,'1 he said. "If they did this Is normal life, I would sue them for breach of contract./I
© 2012 PennLive.com. All rights reserved.
http://blog.pelU1live.conllmidstate _inlpact/print.htlnJ ?ently=/20 12/02/gov _ton1_ cOl'betts -pIa... 3/5/20 I 2
UV1Wlg fiJUUllU Wlln JObS: Corbett raids racing fund for AG programs I News I Pittsburg... Page J of 4
Pittsburgh City Paper
NEWS
NEWS+FEATURES,. NEWS FebrualY 15,2012
Horsing Around With Jobs: Corbett raids racing fund for AG programs "We're facing a huge reduction in our funding and I'm
really afraid we're going to go downhill fast." by Charlie Deitch
Photo by Heather Mull
http://lvwII'.pittsburgilcit)'paper. ws/gyrobase/horsing-aroulld-with-jo[)S-COl'bett -raids-raci ng-... 3/5/2012
nunnllg Arouna wltn Jobs: Corbett raids racing fund for AG programs I News I Pittsburg... Page 2 of 4
Harness racing at Meadows Casino, in Washington, Pa
Among the potential losers in Gov. Tom Corbett's proposed budget: the horses that Pennsylvania casinos rode in on.
Corbett's budget proposes raiding Pennsylvania's Race Horse Development Fund for $72 million a year over the next three years, using the money to offset cuts in other agricultural programs. That move has upset and confused those who depend on those dollars to bolster the state's racing industry.
"I'm absolutely shocked by this because this governor talks so much about creating jobs, but this is a job-killer," says Kim Hankins, executive director of the Meadows Standardbred Owner's Association, which advocates for horse owners, trainers and drivers at the Meadows racetrack in Washington County.
The development fund was devised by the legislature in 2004, when it approved the construction of casinos in the state through Act 71 - known as the Pennsylvania Race Horse Development and Gaming Act. Under that law, 10 percent of all slot revenues were to be directed to the fund. For each dollar that went to the fund, 80 cents were allotted for race purses, 16 cents into the state's breeding program, and 4 cents into establishing medical and pension benefits for those who work in the industry, including jockeys, drivers and trainers.
And the industry has benefited, says Hankins. Bigger race prizes attracted more out-of-state operators, while those who were already here invested more in their racing stock. The state's horse-breeding program took off. In December 2010, the Pennsylvania Department of Agriculture reported that 44,000 equine-related jobs were created as a result of the state's investment.
IIBecause of that fund, people made an investment in this region/' says Hankins. '~obs were created because of this industry, and now we're facing a huge reduction in our funding and I'm really afraid we're going to go downhill fast.
"Our racing programs have a lot of competition now from neighboring states, and even Canada, that wasn't there when this fund was started. If we can't continue to operate the way we have been, there's no incentive for these people who invested in this region to stick around."
http://W\vw.pittsbUl.ghcitypapel..ws/gyrobasenlorsing-around-,:vith~jobs-corbett-raids-racing-... 3/512012
nU[:>lng Mouna WIth JObs: Corbett raids racing fund for AG programs I News I Pittsburg... Page 3 of 4
This is not the first time the fund has taken a hit. Since 2009, the industry has already taken a 17 percent cut in funding - about $40 million -through June 2013. So for the next year, if Corbett's proposal is approved, the industry will have to operate under an additional $72 million in cuts.
"I donlt understand this at all," says state Sen. Tim Solabay (0-Canonsburg). "We turned this industry around. People invested money here and this industry is creating jobs, and now the state's going back on its promises.
"We're going in reverse and it doesn't make sense."
The redirected funding will be divvied up among four educational programs, says Samantha Krepps, a spokeswoman for Corbett's Department of Agriculture. The largest chunk - $44.7 million - will go to Penn State University for research and extension services, and $27.8 million will go to the University of Pennsylvania for veterinary activities. The remainder will be doled out to state fairs and the research of infectious diseases.
Krepps says the transfers shouldn't be controversial. The money is going to other agricultural programs, she notes. "There's still $130 million left in the fund, and that's a lot of money.
"Thes~ educational programs are vital to the state's number-one industry: agriculture," Krepps says.
But state Rep. Brandon Neuman (D-North Strabane) says the original intent of Act 71 was to provide that money to grow, improve and create jobs around the staters horse-racing industry. To now take that money to pay for other programs, he says, ;s "disingenuous. 1I
"This administration has done nothing but preach about the need to bring and keep jobs in this region - and they go out and raid a fund that could potentially take thousands of jobs out of Pennsylvania," says Neuman, whose district includes The Meadows. "Ilm not saying funding these education programs isn't important. But to do it at the expense of thousands of jobs doesn't make sense."
AUTHOR ARCHIVES
EDMC Downplays Talk of layoffs by Charlie Deitch
http://www.pittsburghcitypaper.\vs/gyrobaselllorsing-around-\vith-jobs-corbett-l'aids-racing-... 3/5/2012
Pittsburgh City Paper
HorsIng Around With Jobs: Corbett raids racing fund for AG programs
"Welre facfng a huge reduction in our funding and 11m really afraid welre going to go downhill fast. 1I
February lS. 2012
by Charlie Deitch
Among the potentJallosers in Gov. Tom Corbett's proposed budget: the horses that Pennsylvania casinos rode in
on.
Corbett's budget proposes raiding Pennsylvania's Race Horse Development Fund for $72 million a year over the
next three years, using the money to offset cuts In other agricultural programs. That move has upset and confused
those who depend on those dollars to bolster the state's racing industry.
"11m absolutely shocked by thIs because this governor talks so much about creating jobs, but this is a job-killer, II
says Kim Hankins, executive director of the Meadows Standardbred Owner's Association, which advocates for
horse owners, trainers and drivers at the Meadows racetrack in Washington County.
The development fund was devised by the legislature in 2004, when it approved the construction of casinos in the
state through Act 71 - known as the Pennsylvania Race Horse Development and Gaming Act. Under that law, 10
percent of aU slot revenues were to be directed to the fund. For each dollar that went to the fund, 80 cents were
allotted for race purses, 16 cents into the state's breeding program, and 4 cents into establishing medical and
pension benefits for those who work In the industry, including jockeys, drivers and trainers.
And the Industry has benefited, says HankIns. Bigger race prizes attracted more out-of-state operators, while those
who were already here invested more in their racing stock. The state's horse-breeding program took off. In
December 2010, the Pennsylvania Department of Agriculture reported that 44,000 equine-related jobs were
created as a result of the state's investment.
"Because of that fund, people made an investment in this region, II says Hankins. "Jobs were created because of
this industry, and now welre facing a huge reduction in our funding and I'm really afraid welre going to go downhill
fast.
"Our racing programs have a lot of competition now from neighboring states, and even Canada, that wasn't there
when this fund was started. If we can't continue to operate the way we have been, there's no incentive for these
people who invested in this region to stick around."
This is not the first time the fund has taken a hit. Since 2009, the Industry has already taken a 17 percent cut in
funding - about $40 million - through June 2013. So for the next year, if Corbett's proposal is approved, the
industry will have to operate under an additional $72 million in cuts.
"I don't understand this at all," says state Sen. Tim SoJabay (D-Canonsburg). JlWe turned this industry around.
People Invested money here and this industry is creating Jobs, and now the state's going back on Its promises.
"We're going in reverse and it doesn't make sense. II
The redirected funding will be diwied up among four educational programs, says Samantha Krepps, a
spokeswoman for Corbett's Department of Agriculture. The largest chunk - $44.7 million - will go to Penn State
University for research and extension services, and $27.8 million will go to the University of Pennsylvania for
veterinary activities. The remainder will be doled out to state fairs and the research of infectious diseases.
Krepps says the transfers shouldn't be controversial. The money is going to other agricultural programs, she notes.
"There's still $130 million left in the fund, and that's a lot of money.
JlThese educational programs are vital to the state's number-one industry: agriculture," Krepps says.
But state Rep. Brandon Neuman (D-North Strabane) says the original Intent of Act 71 was to provide that money to
grow, improve and create jobs around the state's horse-racing industry. To now take that money to pay for other
programs, he says, is "dlsingenuous."
I1This administration has done nothing but preach about the need to bring and keep Jobs in this region - and they
go out and raid a fund that could potentially take thousands of jobs out of Pennsylvania," says Neuman, whose
district includes The Meadows. "I'm not saying funding these education programs isn't important. But to do it at
the expense of thousands of jobs doesn't make sense. II
1
HOUSE APPROPRIATIONS COMMITTEE HEARING Wednesday, March 7, 2012
Testimony of James Simpson, President & CEO, Hanover Shoe Farms
Thank you Chairman Adolph and Chairman Markosek for allowing us to provide testimony today
regarding the proposed cuts to the Race Horse Development Fund as outlined in the Governor's budget .
My name is Jim Simpson and I am the president and CEO of Hanover Shoe Farms. I also serve as the
Treasurer for the Standardbred Breeders Association of Pennsylvania (SBAP) . As many of you may
know, Hanover Shoe Farms proudly holds the title as the world 's largest Standardbred breeding farm in
the world. Each year we produce some 400 plus yearlings that are taken to auction at the Horse Sale at
the Farm Show.
Hanover Shoe Farms provides 90 people and their families with meaningful work, farm-owned homes,
health care, and 401k plans. We take care of 1057 world-class racehorses. The cost to maintain the
farm, the land, and the horses has been estimated at approximately $21,000 per day or $7 million per
year. In addition, Hanover's purchases from local vendors have doubled since 2005.
Probably the most frequent quote in the media from legislators is that Pennsylvania horse farms
preserve green space. Hanover Shoe Farms maintains 3000 acres of prime Pennsylvania farm land.
Farms like ours are one of the Commonwealth's last assets holding back the suburban sprawl of strip
malls.
Like other PA breeding farms, Hanover has made big investments in Pennsylvania based upon the
promises of slots legislation. What will happen to those investments if Pennsylvania's promises are not
honored? How willi justify additional investments in Pennsylvania agriculture?
After Pennsylvania passed slots legislation, many new farms were established by out-of-state investors.
Existing Pennsylvania farms expanded some by 50%. Why? Because investors trusted Pennsylvania's
commitment through slots legislation to support a competitive horse racing and breeding industry.
For horsemen, the issues are promises and trust in a partnership with government that makes long-term
private investment in Pennsylvania possible . Like other businessmen, investors in the horse racing
industry need to know that today's agreement is tomorrow's commitment. Breeding, raising, selling,
training, and racing equine athletes require large capital investments. I've attached a document entitled
" Hanover Farm Facts" that outlines our local economic commitment.
The PA Race Horse Development Fund is already in the later stages of a four year reduction in funding
from the previous administration. Now, the Department of Agricultu re and the Corbett administration
f
propose to dive rt another $72,000,000 from the Race Horse Development Fund in 2012 to support other
agricultural initiatives. Outside the ra cetrack, everything IS agricu ltu re.
Through gaming legis lation, Pennsylvania announced to the horse racing world that our state was open
for new business, and was committed to sustaining a viable eq uine racing and breeding industry. The
horse racing indust ry responded, raising the bar by investing in quality horses, quality ra cing, new
breeding farms, and new training faciliti es. It is an expensive game, but the rewards for Pennsylvania
are real and sustainable.
So, is it really just about the money? Well, yes - but it's much more complicated than that.
Horseracing is about the prize. For us, hea lthy purses at the track provide an incentive for people to buy
our horses, which we see as a Pennsylvania product.
We also benefit from a Breeders Award program established under Act 7 1. While the award program is vital to the operation of the farm, it does by no means pay our bills. In fact, since 2007 Hanover has had bigger declines in revenue from the sale of yearlings than Breeders Awards can compensate.
In Harrisburg, t he current debate is about who gets what, who survives, and how government agencies
pay their bills. In difficult t imes, promises are often set aside, and the focus is only on short-term
survival.
Our request to you today is to take a look at the long-term conseq uences and take into consideration
the live lihoods of the people who will be impacted by a hea lthy horseracing industry.
Again, we thank you for your time today and we would be happy to answer any of your questions.
2310 Hanover Pike • Hanover, PA 17331 • (717) 637-8931 • hanoverpa.com
FARM FACTS 2,700 Acres
280+ miles of fence
167 Buildings:
46 Tenanl houses, all used by employees
121 Barns, sheds ;,md vario us oUler storage ;.md oul build ings
26,000 gallons of heating oil annually
75 employees
35 trucks: foreman usc, horse lr<U1spOriaLion, etc.
17 Il'actors
9,500 gal lons of diesel, on ;mel olT road
30,000 gal lons of g;LS
6-15' Batwing mowers illal run 8-10 hours per day (May-September)
1,500 lons of sll'aw bought in 2009
• 950 lons or aboul 47,000 sm;dl bales • 550 lons or 2,700 3\6' "u'ge bales
I ,350 tons of hay bought in 2009
• 825 lons or about 27,000 small b;des • 525 lons or 1,750 3'x6' large bales
1,650 tons of pelletized feed
235 Il'actor u'ailer loads of manure
• Shipped to Laurel V"lley Farms, mushroom growe rs
./ 4 18 Mares scheduled lo loal in 20 10
./ 437 M;u'es booked to be bred in 20 I 0
./ 333 Yearlings lo r 20 10 s;des (Foals of 2009)
./ 106 Retired M"res
./ II Stallions in Pennsylv;Ulia, 2 in New Jersey
2310 Hanover Pike • Hanover, PA 17331 • (717) 637-8931 • hanoverpa.com