Despite raising concerns several weeks ago about the slow pace of state tax collections, Gov. Phil Murphy signed legislation yesterday that will provide New Jersey’s horseracing industry with an immediate, $20 million subsidy.
The new law also gives lawmakers the option of renewing the subsidy on an annual basis for the next four years, pushing the total potential cost to $100 million.
Murphy said the subsidy, which drewfrom lawmakers, would help New Jersey preserve a “competitive edge” in an industry that has been a part of the state’s sports landscape since the 1800s.
“With this funding, New Jersey can continue to offer one of the most exciting horseracing experiences in the nation, while also providing a boost to an industry that is integral to our economy,” he said in a statement.
The bill signing was announced on the same day the Department of Treasury released new revenue figures for the state’s recent. They indicated a total of $282 million was collected from delinquent taxpayers, besting the $200 million target established in the fiscal year 2019 budget signed into law in July. That may have somewhat eased concerns about the state spending money on the horseracing subsidy outside the annual budget process.
Sponsors of the subsidy bill cited a need to reinvigorate New Jersey’s horseracing industry amid stiff competition from other states, including those that use their tax dollars to subsidize purses, which is where the state’s new subsidy will go. The sponsors also pitched the taxpayer assistance as a way to help sustain the estimated 13,000 jobs and more than 175,000 acres of farmland that are still connected to New Jersey’s horse industry. But opponents labeled the subsidy as corporate welfare and questioned why the horseracing industry was being singled out for taxpayer assistance.
The new law calls for the $20 million subsidy to be split between the purses awarded for thoroughbred racing at Monmouth Park and harness racing at the Meadowlands and Freehold Raceway. It also calls for annual reports to be filed with the New Jersey Racing Commission that detail exactly how the funds are used.
An original version of the bill called for the subsidy to be provided during each of the next five fiscal years, but a last-minute amendment gives lawmakers the option of extending the subsidy only to fiscal year 2023. The law does not identify a specific source of funding to cover the subsidy, saying only that it would come out of the budget’s general fund.
Despite the widespread, bipartisan support in the Legislature for the bill, a veto issued by Murphy late last month on unrelated legislation sponsored by Senate President Steve Sweeney (D-Gloucester) raisedall new spending proposals due to sluggish growth in fiscal 2019 tax collections.
Sweeney’s bill sought to increase funding for emergency aid to some public-assistance recipients in danger of becoming homeless. But Murphy’s veto cited “uncertain tax collections,” an “indeterminate” fiscal impact of paying out the additional emergency aid and also questioned the wisdom of approving spending outside the annual budget process.
The latest revenue report released by Treasury yesterday indicated the pace of growth had picked up slightly through the end of January, to 3 percent. The revenue from the tax-amnesty program helped push overall January tax collections up 6 percent compared to last year. But the state’s fiscal-year revenue stream is heavily tied to the income tax, and much of that revenue comes in during the weeks leading up to the April filing deadline for tax returns.