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Slots proposal heads for rough
ride
Racing interests seek to post
Senate win
By William Hershey and
Laura A. Bischoff
e-mail address: whershey@coxohio.com
Columbus
Bureau
COLUMBUS | No demonstrators have filled the Statehouse
lawn this spring to demand that legislators and Gov. Bob Taft do
something about the decline of horse racing in Ohio.
They didn’t have to stand outside and shout.
Lobbyists for racing interests already were inside the Capitol,
making the case for the latest remedy for racing’s ills, installing
up to 2,500 video lottery terminals — slot machines — at each of the
state’s seven racetracks.
The budget approved April 9 by the Ohio House included what
racing interests, including breeders, wanted, a proposal on the Nov.
4 ballot asking voters to OK the slot machines.
J. Gregg Haught, a Columbus lawyer and lobbyist for Thistledown,
a racetrack in Cleveland, said he helped write the VLT amendment
that became part of the budget.
It's not uncommon for lobbyists to help draft legislation.
Haught, a former deputy state attorney general, is considered an
expert and his assistance highlighted the high priority the
legislation has both with racing interests and with House Speaker
Larry Householder, R-Glenford. Householder has been promoting the
VLT idea for more than two years.
The amendment was added to the budget on the same night the House
approved the spending plan, with no debate in committee hearings.
The VLT proposal is tied to a sales tax increase plan. The House
budget would temporarily raise the state's 5 percent sales tax to 6
percent. If voters approve the slot machines, the added sales tax
would be in effect for just the first year of the upcoming budget.
If voters reject slot machines at racetracks, the tax increase would
stay for both years of the budget.
This week, the budget battle moves to the Senate where opponents
of the VLTs include Jeff Jacobson of Butler Twp., Montgomery County,
and Jim Jordan of Urbana.
Supporters say revenue from the slot machines will provide bigger
purses at Ohio tracks and keep in Ohio gambling money that’s now
being spent at casinos and other attractions in neighboring states
and Canada.
Opponents say the slots will create social problems and that
they’re not a dependable way for the state to raise money. The
state’s share is projected to be $500 million a year.
Senate President Doug White, R-Manchester, and Finance Chairman
Bill Harris, R-Ashland, both said last week they believe there is
support in the 33-member Senate for a VLT ballot proposal.
If they're right, Taft would be the only obstacle to getting the
proposal before the voters.
Taft would veto the VLT proposal if it gets to his desk in the
same form as approved by the House, Orest Holubec, Taft’s spokesman,
has said.
Even overriding a veto — 20 votes in the 33-member Senate and 60
in the 99-member House — might not be too much for the racing
interests. They have gotten what they wanted before from the
legislature.
That may be partly due to campaign contributions. Since 1999, top
officials at the state’s seven racetracks have contributed more than
$107,750 to candidates for state offices, according to campaign
finance records.
In addition, two organizations connected to the racing industry
also contributed to candidates, political parties and caucus
committees, according to Ohio Citizen Action. The Horsemen's
Benevolent & Protective Association gave $152,550 and the Ohio
Harness Horsemen's Association gave $111,650 from 1999 through late
2002.
Charles Ruma, a Columbus-area homebuilder and president of Beulah
Park racetrack in Grove City, dished out $35,350 to state candidates
during that time. Corwin Nixon, president of Lebanon Raceway in
Warren County and a former Ohio House Minority leader, contributed
$22,000. Brock Milstein, chairman of Northfield Park, between Akron
and Cleveland, donated $27,150.
Ruma called his contributions a "pittance" and said a lot of his
interest has to do with home building. "But you have to be in the
game and I try to be as best I can," he said.
White and other lawmakers, however, said the industry deserves
support because of what it does for Ohio. About 25,000 people make
their living in the racing industry, creating an annual economic
impact of approximately a half billion dollars, according to the
Ohio State Racing Commission.
Money from horse racing ripples through the economy, White said.
"The more horses we have, the more jockeys, the more they
consume," he said.
State Rep. Bill Seitz, R-Cincinnati, who sponsored the VLT
amendment in the House budget, said he has been a racing fan all his
life.
"This is not like some shady-looking people with fedoras giving
lots of money to us," Seitz said.
Seitz conceded, however, that racing interests have asked for
help in the past to save their industry, only to return to the
legislature for more help, as they have now.
They got what they wanted in 1984 when they said they needed a
major capital improvements credit on the tax that's levied on money
bet at the tracks.
As a result of the tax credit, which remains in effect until
2015, the amount of horse-racing tax revenue going to the state’s
general fund plummeted. The balance of the money from the racing tax
goes to funds that support racing.
The horse-racing tax produced nearly $17.6 million for the
general fund in 1983. This dropped to $3.5 million in 1985 and fell
further to about $2.5 million in 1994.
Joanne Limbach, state tax commissioner in 1984, said she opposed
the tax credit but was overruled by the legislature and then-Gov.
Richard F. Celeste.
"There was some concern that racing was going through a change
and that racing was a viable part of the Ohio economy and they
needed to stay in business," Limbach said. "I guess if you look at
it that way, they’re still in business."
In 1994, the legislature approved wagering on simulcasts at
off-track betting parlors. In 1996, lawmakers allowed simulcast
betting at the racetracks.
As a result of the changes in 1994 and 1996, no money from the
horse-racing tax now goes to the general fund. Instead, 25 percent
of the gross tax is earmarked for the Passport program, which helps
senior citizens live at home instead of at nursing homes.
Adding simulcasts sparked a jump in total money wagered on
racing. The total went from $396.3 million in 1996 to $566.5 million
in 1997, according to the state tax department.
Wagering peaked at $629.6 million in 1999 and declined to $621
million in 2000 and to about $611.1 million in 2001, the most recent
year for which the tax department had figures.
Dennis Heebink, who runs a breeding farm in Hocking County and is
president of the Ohio Thoroughbred and Breeders Association, said
the VLT proposal and changes that racing interests have sought in
the past are ways to keep up with trends in the industry.
Without the VLTs, Ohio's horse racing industry will continue to
decline, he said.
The VLTs are "absolutely critical," Heebink said.
Contact William Hershey at (614) 224-1608 or
whershey@coxohio.com. Contact Laura A. Bischoff at (614) 224-1624 or
lbischoff@coxohio.com
[From the Dayton
Daily News: 04.21.2003]
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