Horse Racing Subsidies vs. Property Tax Relief

Is a $600 million tax increase needed to end a five month-long budget impasse? Lawmakers are considering it. Yet, a shortage of tax revenue is not the source of Pennsylvania’s budget difficulties. According to the Independent Fiscal Office, state revenue collections are at an all-time high. So is government spending.  

With revenue and spending at record levels, government spending should first be prioritized in order to avoid raising taxes on working people. The Commonwealth Foundation identified nearly $700 million in corporate welfare spending that could be scaled back or eliminated, with the savings used to plug the nearly $1 billion deficit.

Corporate Welfare Grant & Loan Programs 2014-15 Budget (Thousands)
General Fund
Agriculural Excellence $1,100
Agricultural Research $787
Agricultural Promotion, Education and Exports $250
Ben Franklin Tech Development Authority Transfer $14,500
Commonwealth Financing Authority Transfer $77,755
Council on the Arts $898
Discovered in PA Developed in PA $5,000
Food Marketing Research $494
Grants to the Arts $8,590
Hardwoods Research and Promotion $350
Industry Partnerships $1,813
Infrastructure and Facilities Improvement Grants $19,000
Keystone Communities $6,150
Keystone Works $100
Livestock Show $177
Marketing to Attract Business $2,008
Marketing to Attract Tourists $7,264
Municipalities Financial Recovery Revolving Fund Transfer $4,000
New Choices/New Options $500
Open Dairy Show $177
Partnerships for Regional Economic Performance $11,880
Pennsylvania First $20,000
Pennsylvania Race Horse Development Fund $250,118
Tourism-Accredited Zoos $550
Transfer to the Nutrient Management Fund $2,714
World Trade PA $5,824
Youth Shows $140
Total $442,139
Tax Credits
Film Tax Credit $60,000
Job Creation Tax Credit $10,100
Research and Development Tax Credit $55,000
Keystone Opportunity Zone $87,500
Keystone Innovation Zone $25,000
Resource Enhancement and Protection Tax Credit  $10,000
Alternative Energy Production Tax Credit $10,000
Total $257,600
Total $699,739

Of the $700 million in corporate welfare, about 36 percent is dedicated to the Race Horse Development Fund, which uses gaming revenues to fund prizes for wealthy horse owners, many of who live out of state. Gaming revenue is also used to fund property tax relief. However, lawmakers are planning to use that revenue ($616 million) to pay for pensions, which raises a question: Why not divert the gaming revenue away from horse racing to pay for property tax relief or pension obligations?

Pennsylvania workers already pay high enough taxes. Whether it's horse racing funds or another form of corporate welfare, government should first cut back where it can before putting greater strain on the budgets of families across the commonwealth.

The current proposal—higher taxes and excessive government spending—represents the policies of the past, policies which have led to poor job growth, personal income growth, and population growth. A new course is needed, and it starts with restraining the growth of government and protecting working people from tax hikes.