Top New York officials are negotiating a $5 million tax break for racetracks across the state as part of a massive spending plan that appears to be having its final touches put together in Albany.
The plan being pushed by the New York Racing Association would raise the pari-mutuel tax rate on advance deposit wagering operators and lower the rate on Thoroughbred and Standardbred racetracks.
The proposal is a change from what New York Gov. Kathy Hochul proposed in January, which was, in essence, a revenue-neutral set of alterations to the complex pari-mutuel tax laws.
Negotiators for Hochul and the Legislature are still putting the final pieces together on a new budget for the state, which was due on April 1 when the fiscal year began. Until all the various budget bills emerge and get voted on, the pari-mutuel proposed language could still change.
The final budget, as previously reported, is expected to include language to round bettors' winnings to the nearest penny for all horse race payouts now affected by the state's breakage law.
As the BloodHorse reported in March, the final budget is also expected to set aside funding for equipping and operating a new advanced imaging screen program at the Cornell Ruffian Equine Specialists Hospital adjacent to Belmont Park.
Under the pari-mutuel tax proposal being discussed, out-of-state ADWs would pay a tax rate of 6.45% of handle, up from 5% currently. NYRA now pays 7.45% of handle to the state, which would drop by 0.54% under the new plan being negotiated behind closed doors at the state capitol. Sources said the numbers being discussed would still see ADWs paying a lower tax on handle than the 6.91% level for NYRA.
It is uncertain how much of the $5 million in tax breaks would benefit NYRA specifically compared to other track operators in the state. Officials with the heads of the Senate and Assembly racing and wagering committees did not comment Tuesday.
For NYRA, the uniform pari-mutuel tax rate would result in a savings of 0.54%. Even with this change, NYRA would still have an overall effective statutorily imposed rate of 6.91% of handle.
Backers of the proposal say the changes are needed.
"The proposed changes to New York State's pari-mutuel taxes and fees will simplify the horse racing business and level the playing field between New York's racetracks/ADW operators and their out-of-state competitors. NYRA commends Governor Hochul and the NYS Legislature for supporting a more consistent payment structure across the racing landscape, which will allow organizations like NYRA to maximize its investments in the sport and its stakeholders,'' NYRA spokesman Patrick McKenna said on May 6.
