KY Senate Kisses Horse Industry Good-Bye

What a disappointing vote yesterday in the Kentucky Senate:  citizens will not get to vote on whether Kentucky should expand gambling to aid the horse industry.

At least there was a vote; last go round, Senate President David Williams killed the bill in committee, in an alarming lack of transparency. Yet many are left with the nagging suspicion that this was a rigged vote -- timed to ensure defeat.

David Williams opposes gambling in Kentucky, although it is well known that he personally likes to gamble:  gambling for me, not thee. He has no credibility on the issue and should have just let Sen. Damon Thayer handle the whole thing.  Indeed, given Williams' resounding defeat in his bid for governor, he has little credibility on any issue.  Why is he still Senate President?  Are people still afraid of him after that disastrous election? Sure, he's a brilliant man, but wouldn't a less polarizing leader be more effective?

What is discouraging about the Senate vote is that it is anti-democratic.  Ordinary Kentuckians deserved a chance to have their say on the issue. All senators, regardless of their personal position, therefore should have voted to put the issue on the ballot.  A vote against the amendment is parternalistic; it says that voters cannot be trusted to make the right choice. The only way this issue can be put to rest is by allowing voters to address it directly.

There should be bipartisan support for our horse industry. As an out of state transplant, I can testify that bourbon and horses do more for Kentucky's image than anything else. That add an allure to the state and do  much to counterbalance the notion that we all have meth mouth and run around barefoot. Moreover, the horse industry is a huge employer, offering jobs for a wide range of skill levels, It is a tourism magnet. It is a counter-weight to the dreaded Urban Sprawl.  It is a green industry. Really, there are any number of constituencies, otherwise odd bed-fellows, that should be banding together to save it.

The reality is that other states, like New York, are gunning for our horse industry -- successfully. Those who oppose gambling need to identify an alternative to prevent the horse industry from becoming a vestige of Kentucky's past.

Bill Farish Is Right On Slots

I went to the first day of Keeneland's Yearling sale last week, and it was a blood bath. Not a single horse sold for a million dollars. Most final bids did not meet the minimum reserve; many did not even cover the cost of the stud fee.

Kentucky's horse industry is dying, and our leadership in Frankfort -- including Sen. Dave Williams -- is preventing the solution: video lottery terminals at the tracks.

Joe Arnold links up a letter from Bill Farish that underscores the unity within the horse industry on the need for VLTs:

The horse industry is as united as it has never been in the past. Opponents of VLTs have always relied on our discord to defeat the efforts to compete on a level playing field. Now that the industry has formed a united front, opponents seek to break us apart again. They will be unsuccessful in their efforts to do so. Kentucky breeders recognize that we must have a healthy horse economy in this state in order to run successful breeding operations. A healthy horse economy includes buyers willing to invest in our product and take their investment to the racetracks in the hopes of recouping their investment. Owners recognize that they need healthy racetracks offering good purses, so that they can attempt to win back some of their initial investment. Racetrack operators understand that they need breeders to produce and owners to race their horses at their tracks.

We are all in this together, and the attempt to break us into factions is disheartening. A fractured industry cannot survive, and a failed horse industry would be catastrophic for Kentucky's economy. Sadly, Sen. Williams seems less concerned about helping our industry, and more concerned about maintaining control over his Senate fiefdom.

Farish also has harsh words for Williams:

Sen. Williams and several members of his caucus are currently advocating that the government should stand in the way of our signature industry, and prevent it from being able to compete. Government interference with Kentucky businesses and job creation does not sound like a Republican philosophy I am familiar with. But regardless, saving 100,000 jobs and the industry that identifies our state all over the world does not rest in the domain of any political party. It should be the stated goal of all Kentuckians--regardless of political registration.

Well said, Mr. Farish.

David Williams Wants MORE Taxes?

Ronnie Ellis is reporting that Sen. Pres. David Williams disagrees with Gov. Steve Beshear on the amount of Kentucky's budget shortfall, and has a different idea about how to raise whatever funds we're short. Instead of agreeing to video gambling terminals at Kentucky racetracks, Williams apparently wants to raise taxes. Again.

Everyone seems to agree on one thing – although there are some competing data – the horse industry is in trouble. But Williams says there’s a better way to boost purses and breeders’ incentives than gambling, offering a plan for a 10 percent tax surcharge on lottery tickets, using some sales taxes on horse products, and taxing out of state betting on Kentucky races to boost purses and incentives. Beshear and spokesmen for Stumbo say allowing the VLTs at tracks is the only workable, available option to help the industry.

Let's unpack that.

Williams tax no. 1 would impose a "10 percent tax surcharge on lottery tickets," according to Ellis. Lottery tickets are sold to the poorest of the poor; it is already the most regressive tax we have. The notion of further taxing these desperate people is very troubling.

Williams tax no. 2 would involve "some sales taxes on horse products." Apparently the idea is to reallocate the revenue from these taxes to increase the race purses. However, if everyone agrees that the horse industry is already in trouble, we should be looking at cutting taxes specific to that industry, not raising or even reallocating them.

Williams tax no. 3, Ellis explains, contemplates "taxing out of state betting on Kentucky races." Although I appreciate the effort to sock it to the out-of-staters, this tax may not even be constitutional.

Williams's proposal does not come in a vacuum. Just last session, Williams agreed to a huge tax hike that hurts Kentucky's other signature industry, the Bourbon distilleries. That provided a long-awaited opening to Indiana Gov. Mitch Daniels, who is said to be aggressively wooing Brown-Forman to move to New Albany.

If Kentucky persists in making its tax structure hostile to those industries that make our Commonwealth unique, we will lose those industries. Take away the horse industry and Bourbon industry from Kentucky and we don't look much different than, say West Virginia. These industries define us. We must protect them. Raising taxes is not a solution and would hurt the very industries that need our help.