The newly proposed Horseracing Integrity and Safety Act of 2020 (S.4547) may
provide an incentive for States to defund existing anti-doping and medication
rule enforcement programs according to an analysis being prepared for the Association
of Racing Commissioners International so the group can help achieve a “smooth
transition” should the measure be enacted.
“COVID-19 has economically devastated many state budgets and the additional
resources just may not be there to improve upon the existing anti-doping and
medication enforcement program infrastructure to comply with S.4547,” said Ed Martin,
President of the ARCI.
The RCI President said It is not unreasonable to expect that a State Budget
Director or Legislative Committee will look at this law and question why the
state needs to continue paying for the existing program, any new unfunded
mandates, and a new federal authority as well as it’s contracted enforcement
agency. As the law allows the state to “off load” their current
program and have the federally dictated system operate and pay for it, there
will be an economic incentive to do that.
At that point racetracks, owners, trainers, breeders, and veterinarians may be
assessed costs to replace the lost state investment and pay for the additional
two entities envisioned by the bill.
Depending on the state, the local racing industry will continue to pay all
current state assessments and taxes and may discover that they now must pay
newly levied assessments to pay for the now federally mandated privatized
program.
According to the analysis and assuming that there will be no industry specific
state tax cut in these jurisdictions and existing revenue sources will remain,
the racetracks, owners, trainers, breeders, and veterinarians in the following states
(partial list) are potentially exposed to paying again should their state
program be shifted to the newly created NGO:
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Illinois
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Colorado
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Michigan
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Florida
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Oregon
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Arizona
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Massachusetts
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Nebraska
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Virginia
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Washington
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Indiana
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New Mexico
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Wyoming
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Louisiana
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Some states have the ability to directly bill racetracks for their
program. These states may continue to operate their existing program and
simply forward the newly enhanced bill for the current program, additional
mandates and the two new entities directly to the racetracks which will then be
required to pay the state. These jurisdictions include:
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New Jersey
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Texas
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Kentucky
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Delaware
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Iowa
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Oklahoma
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Massachusetts
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Nebraska
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Virginia
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Maryland* (see below)
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West Virginia
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Minnesota
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New York* (see below)
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In New York, state general fund monies are used to pay for the drug testing
enforcement program and shortfalls are recouped from a commission determined
industry assessment on racetracks and owners. Given New York’s
post virus severe financial needs going forward it would be possible for the
state to cut funds for drug testing and allow the commission to impose fees on
tracks and owners to pay for the shortfall and any additional costs imposed by
the legislation.
If that were to happen or should the State hand the program off, the prospect
for an industry specific tax cut would be slim and the industry would be
totally required to make up the loss of state investment.
In Maryland, only certain costs can be forwarded to the tracks and additional
mandates may require legislation in order to be passed through.
S.4547 envisions that racing commissions will pass the overhead costs for the
new authority and its enforcement agency to industry participants based on the
assessment bill received each year. The states do not have the
authority to unilaterally impose and set such assessments with the possible
exception of New York as indicated above.
The States have had to do the best job they could with the available
funding. State budgets have always considered the ability of people to
afford the assessments. This bill puts no limit on program funding which
is a luxury no State Racing Commission ever has had.
