I get it… State legislators have a very difficult job. They are often required to legislate on a wide range of issues, and – as usual – there is never enough time to research issues as thoroughly as they would like. And once they have finished that bill, it is off to the next issue and there is little interest in re-examining a completed task.
But the time has come for the Legislature to take a stand. As part of the Expanded Gaming Act, the Legislature created the Race Horse Development Tax, a nine percent (9%) surtax on gaming revenues for a Category 2 (slot parlor) licensee. The proceeds from this tax were to be used to subsidize and as a catalyst to revitalize the horse racing industry in Massachusetts. However, the Legislature made no provision as to how those funds would be administered.
Several weeks ago, in a letter to the Legislature, the Massachusetts Gaming Commission (MGC), expressed its position that the Legislature should give control over the Race Horse Development Fund and other racing revenue streams to the MGC. Giving control over the disposition of those funds to a board of five commissioners who know the industry makes perfect sense, if the goal of the Race Horse Development Tax is truly to save the horse racing industry in Massachusetts. But now the Legislature is considering a proposal to raid the Race Horse Development Fund to assist in closing a projected budget shortfall.
Since its inception, the tax has generated almost $28 million, which is a drop in the bucket when compared to the Commonwealth’s $40 billion budget. But not for Plainridge Park Casino, who earned the money to be taxed or for the race track and horse owners who may have anticipated the subsidy. Diverting tax revenues, meant for a specific purpose, due to economic necessity is somehow wrong. But we see this happen over-and-over again with the unclaimed bottle deposits, which are periodically raided to close a budget shortfall.
The Legislature should allow the funds to be used for their statutory purpose, and if not, then perhaps it is time to repeal the Race Horse Development Tax or, in the alternative, at the very least permanently amend that statute that will allow it to be used for other purposes, such as a allocating the proceeds of the tax to the Commonwealth Stabilization (rainy day) Fund.