House approves bond bill to fund track improvements

April 09, 2000|By William F. Zorzi Jr. | William F. Zorzi Jr.,SUN STAFF

The House of Delegates approved a heavily amended bill yesterday that would allow a state agency to sell bonds to help finance improvements at Maryland's privately owned horse tracks -- and provide for state oversight of the construction work.

The measure now goes to the Senate, where legislative leaders say approval is expected.

The legislation, approved 97-27, initially was designed to be a financing plan for track improvements but wound up including a long menu of sweeteners for various parts of the racing industry.

The added starters include such provisions as allowing twilight racing at the thoroughbred tracks, establishing regulations over when and where a new Western Maryland track can simulcast races and providing $10 million to enhance purses for the fourth year.

"This is giving ourselves a very worthwhile and profitable industry," said Del. Sheila E. Hixson, a Montgomery County Democrat who chairs the Ways and Means Committee, which amended the bill.

The legislation would set up a complicated financing arrangement in which a quasi-public agency, the 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 state account funded in part by uncashed pari-mutuel tickets. Other state tax and lottery revenues would be used to replenish that account.

"If this legislation passes, the industry will be able to revitalize Pimlico, Laurel and Rosecroft, so that the industry can flourish," said Alan M. Rifkin, a lobbyist for Pimlico and Laurel.

The bill had been plagued by industry infighting and last-minute amendments by the Glendening administration -- including requirements for construction oversight by the Maryland Stadium Authority and the governor's approval of plans for improvements.

At the administration's urging, the House amended the bill to require the owners of Pimlico and Laurel to invest more of their own money during the first five years toward $60 million in planned improvements -- instead of spreading out their contributions over the 15-year life of the bonds. The two tracks would be eligible for about $32 million in bond money.

Most of the debate yesterday focused on an amendment proposed by Del. Robert L. Flanagan, a Howard County Republican. The amendment, which failed, would have prohibited fund raising by a governor while reviewing tracks' construction plans.

"While the plan is before the governor, we should not be hitting up racetrack owners for fund raisers," Flanagan said.

Del. Leon G. Billings, a Montgomery County Democrat, raised concerns about the state being involved in supporting what could be a dying industry, urging a vote against the bill. "Some would suggest we're not beating a dead horse, but propping up a dead horse," he said.

Del. Clarence Davis, a Baltimore Democrat, countered that industry would be reinvigorated if the plan were approved. "We see a bright future for horse racing."

Billings shot back: "I'd have a bright future, too, if someone gave me $30 million."

The tracks turned to the state because it would be difficult for them to obtain private financing for improvements on the scale being proposed.

Taxpayers would not be liable for the bonds because MEDCO is a quasi-public economic development agency that can issue bonds to help private companies. If the racetracks defaulted, the bond purchasers -- not the state -- would be at risk.

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