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Pa. lawmaker proposes using horse racing funds for schools

Should nearly $250 million a year be given to wealthy horse owners or to cash-strapped school districts? A state legislator from Montgomery County is betting on the latter, sure that state residents will opt for the school districts.

Should nearly $250 million a year be given to wealthy horse owners or to cash-strapped school districts?

A state legislator from Montgomery County is betting on the latter, sure that state residents will opt for the school districts.

Rep. Todd Stephens (R-North Wales) today proposed gutting the state's Race Horse Development Fund in favor of increasing state funding to school districts that receive less than 35 percent of their funding from the Commonwealth.

During the last six years, more than $1.5 billion has gone to horse owners, race-horse breeders and others in the horse racing industry, thanks to a little-known state subsidy that funnels 12 percent of casino slot revenues to the Race Horse Development Fund (RHDF). The lion's share of that bounty goes to "enhancing" the prize money at the race tracks. The RHDF actually received $225 million during the 2012-2013 fiscal year. first reported on the subsidy just prior to Pennsylvania Derby Day last September, the state's richest day in horse racing. The prior year — in 2012 — Parx became the first track outside the Breeders' Cup to offer two $1 million races during one event, although not one Pennsylvania-based horse placed in any of the three stakes races that day. In fact, the entire $2.3 million in stakes money was won by non-Pennsylvania owners.

The fund is a politically touchy subject and Stephens recognizes it's sure to win him enemies among the horsemen's organizations that control the giant pool of cash.

"Someone said 'you might end up with a horse head in your bed,'" Stephens said, alluding to a gruesome scene from "The Godfather." "But we have a constitutional obligation to fund our schools, not to provide an economic incentive for one segment of one industry. Rather than funding the pastime of the world's wealthy and elite, I believe these funds should be used to fulfill our moral and constitutional obligations to our children and help reduce the burden of local property taxpayers in 211 school districts."

For instance, in two of the more affluent districts, Montgomery County's Lower Merion and Springfield, state funding per student amounts to roughly 10 percent, according to 2011-2012 state figures.

In districts with less affluent households and smaller tax bases, state spending is much higher per student. The highest percent of state spending per student is in the Chester-Upland district, where roughly 78 percent comes from state coffers. In Philadelphia, it is nearly 49 percent.

Every district in Montgomery County and 12 of the 13 districts in Bucks County would receive funding through Stephens' proposed Local Effort Equalization Fund (LEEF).

Eleven of Chester County's 12 districts and 12 of Delaware County's 15 district would receive funding through LEEF.

The only local districts that would not receive LEEF funding are the Chester-Upland, Southeast Delco, William Penn, Oxford Area, Bristol Borough and Philadelphia districts.

More powerful men have proposed far less and been beaten like old mules in the press for doing so.
When Gov. Corbett suggested that a few million be diverted from the fund in order to pay for other state programs, horse owners and breeders used the word "rape" to describe his plan. Corbett backed down.

"There's a reason horse racing is called 'The Sport of Kings,'" Stephens said. "Some of those who have won enhanced purses provided by the RHDF include Sheik Mohammed bin Rashid Al Maktoum, prime minister of the United Arab Emirates, Saudi Prince Faisal bin Khalid bin Abdulaziz, and countless, out-of-state, millionaire racehorse owners."

Stephens, who has served three years in the State House, said he has looked for some way to even out the disparity between district funding.

"Some districts get 10 percent of their funding from the state, others get 78," Stephens said. "Is that fair?"

Asking that question prompted him to send out a memo looking for a co-sponsor to "completely raid" the Race Horse Development Fund.

The president of the Pennsylvania Thoroughbred Horsemen's Association, Salvatore DeBunda, said Stephens' wish to provide more education funding is admirable, but that the legislator doesn't understand the importance of the RHDF.

"I think he's going to the wrong source for that. He never really has understood what the fund does," DeBunda said. I think one of things to show he doesn't understand is that he talks about $250 million. Well, that's the entire fund. So he would basially wipe out the entire horse industry in Pennsylvania. That's like saying you're putting a door up and taking down the entire wall to do it."

The Fund was created in order to revive the moribund horse racing industry in Pennsylvania. Despite the millions poured into horse racing in the state, the industry has remained stagnant. A large portion of the money flows out of state, Stephens said.

"If my proposal were to go through, 100 percent would go to residents of Pennsylvania," Stephens said. "It couldn't be any worse than what's going on."