CHARLESTON, W.Va. -- Gazette-Mail Capitol reporter Phil Kabler suggested in his Aug. 12 column that the state could find just over $100 million to help balance the budget by eliminating the subsidies given to horse and dog racing (and breeding) from racetrack video lottery and table games.
Kabler is right about a lot of things, but he's dead wrong about this.
I'm not familiar with the other three racetracks, but I am familiar with Charles Town, having represented Jefferson County in the House of Delegates for the last 20 years. As the late, great mayor of New York, Al Smith, used to say, let's look at the record.
Tom Witt, formerly of the West Virginia University Bureau of Economic Research, estimated in a study done last year that the horseracing and breeding industry inserts $191 million per year into Jefferson County's economy. There are 1,450 direct jobs in that industry in Jefferson. These jobs are exclusive to the racing/breeding industry -- the 1,450 figure does not include any casino jobs. The study did not include adjacent Berkeley County, which has dozens of horseracing and/or breeding farms.
I know that the Charles Town casino brings in approximately half of all of the video lottery and table games revenue the state gets each year from that industry. That would be about $50 million, give or take.
I don't have a formula in my head for how much revenue will be produced by a given amount of money inserted into the economy. But I'll wager that if you were to include all of the various types of income taxes, sales taxes and property taxes paid by all of the employers and employees in the industry and add it to the direct taxes of all kinds on racing and the casino you would get something close to that $50 million.
Removing that $50 million subsidy would kill racing in Jefferson County. So if I'm right about the revenue, eliminating the $50 million subsidy would also eliminate a figure similar to that elsewhere in the state's revenue stream.
Kabler said Charles Town might be the only viable track in the long run. I don't think that's true, but if he is, then the $50 million we now get from the other three tracks will disappear on its own and will therefore be unavailable for budget balancing.
The Video Lottery Act authorized racetrack video lottery in part to save the racing industry. The requirement for a minimum number of days of live racing is the legal underpinning for giving the casinos protection from nearby in-state competition. So we could not simply take that $100 million from the budget and put it someplace else. We would first have to pass a statute changing the law, eliminating that proviso.
Without that proviso the act would not have been passed by the Legislature in the first place. It was in part the prospect of subsidies for horseracing from the casino that caused the voters of Jefferson County to approve a referendum permitting the existence of the Charles Town casino in the first place and to approve a subsequent referendum permitting table games there.
Jefferson Countians, by a big majority, like the presence of horseracing. Many of them work in the industry. Many horse and grain farms have been in the same local families for several generations. (Many Eastern Panhandle grain farms owe their existence in part to horseracing and breeding.) As a group, these folks are very popular as neighbors. And people like the greenspace the racing and breeding industry has preserved. Threatening the existence of that industry would be extremely unpopular.
For 19 years as a member of the House Finance Committee, I was the recipient of many ideas to save the state money. Some of them made sense, but in many cases the person suggesting an idea had not thought through the long-term implications or effects of that idea. I think that's the case here.
Doyle, D-Jefferson, is a delegate from the 57th District.