Senate tentatively OKs track financing plan

State would sell bonds for sites' improvements

March 28, 2000|By William F. Zorzi Jr. | William F. Zorzi Jr.,SUN STAFF

A state agency would sell millions of dollars in bonds to help finance improvements at Maryland's privately owned horse racing tracks under legislation that received preliminary approval in the Senate last night.

While the bill was introduced as a financing plan for the track improvements, it has been amended to include a grab bag of proposals -- ranging from allowing twilight racing at the state's thoroughbred tracks to establishing regulations over when and where a new Western Maryland track can simulcast races.

"All the other Christmas tree stuff is what we needed to get the bill passed," said Sen. Thomas L. Bromwell, the Baltimore County Democrat who chairs the Finance Committee.

Similar legislation is pending in the House of Delegates.

The state has pumped millions into the ailing racing industry over the past three years, including money for marketing and more than $25 million to boost purses, in an effort to make Maryland tracks more competitive with neighboring states.

The legislation approved last night would set up a complicated financing arrangement in which a quasi-public agency, Maryland Economic Development Corp., would sell about $45 million in bonds to pay for improvements at Pimlico Race Course, Laurel Park and Rosecroft Raceway.

While much of the money to pay off the bonds would come from bettors, some would be taken from a special state account funded in part by uncashed pari-mutuel tickets. Other state tax and lottery revenues would be used to replenish that account.

Joseph A. De Francis, who holds the controlling interest in Pimlico and Laurel, has said the bonds are needed to pay for part of $60 million in planned improvements at his tracks.

"If this passes, it will be an enormous step for the rehabilitation of Pimlico, Laurel and Rosecroft," said Alan M. Rifkin, a lobbyist for De Francis. "It is the most logical, reasonable approach to rebuilding those facilities."

At Pimlico and Laurel, much of the money to repay the bonds would come from a 1.5 percent increase in the "takeout," money the tracks take out of the bettors' payoff pool for specific uses. That amount is about $2.3 million a year.

The amended legislation would require the owners of the two tracks to spend the same amount of their own money on improvements each year for the duration of the 15-year bonds, meaning that they would be required to invest $34 million.

The measure initially sought to use proceeds from Maryland's racing tax to help pay off the bonds, but track owners agreed to use money from the uncashed tickets after the state budget secretary objected. If tax money were used, the amount of the bonds could have been counted against the state's debt affordability ceiling, said Budget Secretary Frederick W. Puddester.

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