Gov. Tom Wolf’s push to make a college education an attainable goal for all Pennsylvanians by creating a $200 million scholarship program is drawing strong opposition from the horse racing industry that would see its primary funding source for purses and breeder incentives largely drained.
Wolf on Wednesday held a news conference to call for action on his proposed Nellie Bly Scholarship program that would provide free aid to students who attend either a community college or Pennsylvania State System of Higher Education university.
The program would be targeted to students pursuing careers in high-workforce areas following the pandemic such as healthcare, education, and public service. Scholarships would come with a requirement that recipients live and work in Pennsylvania for the same number of years they received a scholarship.
“A good education can set a person up for a lifetime of success. But pursue that education can often be a dream out of reach as costs skyrocket and student debt looms,” Wolf said at the news conference held at Dixon University Center in Harrisburg. “Let’s help Pennsylvania students succeed and put money back into the economy, instead of shouldering them with debt equal to a down payment on a new home.”
Funding for this scholarship program – which Wolf first proposed in 2020 but it went nowhere – would come from a combination of federal American Rescue Plan Act funds and the Race Horse Development Trust Fund.
It’s the proposed diversion of $88.2 million for each of the next two years – and what the Pennsylvania Equine Coalition fear could grow to $200 million in subsequent years — from the Race Horse Development Trust Fund that has the coalition crying foul.
“The governor’s proposed transfer will cripple the horse breeding industry in Pennsylvania, have a devastating impact on thousands of family-sustaining jobs, jeopardize hundreds of thousands of acres of open space, and put at risk hundreds of small businesses – many of which are minority owned,” said Brian Sanfratello, executive secretary of the Pennsylvania Horse Breeders Association, which represents the state’s thoroughbred breeders.
“He has hurt our industry more than any other governor in recent history. Fortunately, legislators understand that horse breeding and racing are an integral part of the state’s larger agriculture industry, which is why his proposed raid has received very little support from the legislature over the past two years, including from members of his own party.”
House Appropriations Committee Chairman Stan Saylor, R-York County, said as much at a hearing with State System Chancellor Dan Greenstein on the day after Wolf unveiled his 2022-23 budget proposal earlier this month. T Nellie Bly Scholarship Program was included in it.
“I do want to point out that the governor again this year put in the Nellie Bly, which is dead on arrival,” Saylor said. “It has been. The General Assembly’s been very clear on that.”
Making it more palatable
Wolf spokeswoman Beth Rementer said the funding directed to the Race Horse Development Fund comes from tax revenue from slot machines. That money was directed to the trust fund when the industry asked for help in 2004 and 2015.
“These dollars belong to the state to be utilized for programs that benefit Pennsylvanians as a whole, not the industry,” Rementer said. “Taxpayers have invested more than $3 billion in the industry since 2004. However with this incredible investment, it’s time for the industry to become self-sufficient by reducing its reliance on a subsidy of state dollars. The industry should continue building upon the investment taxpayers have made in them. Now is the time for the industry to stop negotiating for taxpayer money and focus on generating their own to be self-sustaining.”
What’s more, she said, “Nellie Bly does not leave horse racing in Pennsylvania cold. It leaves them with more than $108 million annually in the fund that it uses to support winnings for owners, trainers, and jockeys. Governor Wolf is hopeful that splitting the funding source will be more palatable for the General Assembly as the proposal moves forward.”
Rementer said just as the commonwealth responded to the needs of horse racing when they needed help, now an investment in its workforce is needed specifically in the high-demand occupations that have been identified following the pandemic.
“And that is just what Nellie Bly does,” she said.
Fixing one problem creates another
About $240 million a year of tax revenue from slot machine proceeds is deposited into the race horse trust fund. A June 2021 Franklin & Marshall poll found 83% of voters surveyed favored repurposing the money in this trust fund.
“Pennsylvania taxpayers provide, on average, three times more in support to horse owners and breeders than they provide to students at PASSHE schools, an imbalance that has to change,” said Sharon Ward, policy advisor for Education Voters of Pennsylvania. “Wolf’s plan keeps the tracks open but reflects horse racing’s continually shrinking importance in the gaming landscape.”
Greenstein, the State System chancellor, said the cost of attending one of the 14 state universities despite having the lowest possible price for a four-year degree is still out of reach for too many students.
“This scholarship may be one way the commonwealth can decrease student’s out-of-pocket expenses, increase enrollment and completion and guarantee Pennsylvania’s workforce remains competitive, internationally,” said John “Ski” Sygielski, president and CEO of HACC, Central Pennsylvania’s Community College .
The equine coalition acknowledges college debt and rising tuition rates are major problems in Pennsylvania. However, this statewide organization representing more than 10,000 owners, trainers, drivers, and breeders in Pennsylvania’s horse racing and breeding industry says fixing one problem by putting an entire sector of the agriculture industry out of business isn’t the answer.
Horse racing industry’s lifeblood
According to the equine coalition, the transfer of funds would decimate horse racing in Pennsylvania.
That industry supports hundreds of small businesses, 23,000 family-sustaining jobs, delivers a $1.6 billion economic impact, generates $69 million in annual tax revenue, and protects hundreds of thousands of acres of open space, it says.
The proposed cuts that would have to be made to breeder incentives and purses – if approved – would prompt many breeders and equine owners to relocate their operations and horses to other states, resulting in an exodus of economic investment and jobs, the coalition says.
“We occupy 3,000 acres in Adams and York Counties and we’ve been here for 96 years,” said Russell Williams, president of Hanover Shoe Farms, Inc., the world’s largest Standardbred horse breeding farm. “Forty families live on that land because one or more family members are employees of our farm, among about 80 employees total. At peak, over 1,000 horses also live on the farm, including more than 100 retired horses that have nowhere else to go.
“We buy 1,500 tons of hay and 1,500 tons of straw from our neighbors every year, not to mention feed, farm machinery, fence boards, supplies, and equipment,” Williams added. “The governor has told me that he knows our farm from commuting between his businesses in York and Littlestown in the past years. I don’t understand how this governor could bring himself to destroy all that, injure so many people and animals, and shift Pennsylvania from being a mecca for horse breeding and racing to being a non-entity.”
Rodney Eckenrode, owner of Equistar Farm, a training and breeding farm in Annville, Lebanon County, where 2004 Kentucky Derby and Preakness Stakes winner Smarty Jones stands at stud, said purse money and breeder incentives are the lifeblood of the horse racing industry.
Besides all that, the equine coalition points out a law that Wolf himself signed in 2017 to spur long-term investment in the state’s racing and breeding industry specifically states the Race Horse Development Trust Fund is “not funds of the commonwealth” and that “the commonwealth shall not be rightfully entitled” to it.
Jan Murphy may be reached at email@example.com. Follow her on Twitter at @JanMurphy.