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Plan would shift money from horse racing to auto racing

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Lawmakers are considering a controversial plan to take $10 million in annual slot machine revenues away from the state’s horse racing industry and give the money to the auto racing industry instead.

The move—debated Monday in the House Ways and Means Committee—is meant to subsidize upgrades at the Indianapolis Motor Speedway and make low-interest loans available to other auto tracks and businesses across the state.

Indiana Rep. Eric Turner, R-Cicero, said the money would help an industry that creates thousands of jobs in the state but would also eliminate the need for lawmakers to find money in the state budget to pay for the incentives. Turner’s proposal would also impose a new $1 tax on the tickets for major events—such as the Indy 500 and the Brickyard 400—at the Indianapolis Motor Speedway and capture new sales and income tax revenue generated there.

“We think this proposed amendment speaks not only to the need and desire to assist IMS but to help all of motorsports across the states, particularly the smaller tracks that run races every weekend,” Turner said.

He offered the proposal as an amendment to Senate Bill 91, which originally created a motor sports development zone to capture tax revenue to help the speedway. As passed by the Senate, the legislation created a sort of partnership between the state and the IMS. The speedway would sell $100 million in bonds to be paid off over 20 years using the tax revenue generated in the development zone.

But some critics said the legislation didn’t require the speedway to put enough resources into the project, which led lawmakers to start rethinking the legislation. However, the amendment offered by Turner still wouldn’t require a direct investment by IMS.

Instead, it calls for the state to borrow money for the $100 million project, which would pay for grandstand upgrades, lighting and and improvements to make the facility accessible to people with disabilities. The state would then use $5 million annually from slot machine revenues generated at the state’s two horse-track casinos to help make payments on the loans. That cash is part of about $57 million in annual slot revenue that now goes to the horse industry to supplement race purses and encourage Indiana breeding.

The state would also recoup money for the loan from the ticket tax —which would generate about $1 million annually—and by capturing new sales and income taxes generated in the zone, which would encompass the speedway and its adjacent property.

Turner’s plan also calls for the state to take an additional $5 million from the slots revenue to create a loan-interest loan fund for other motorsports initiatives. He told the Ways and Means Committee that Indiana has the most auto tracks per capita in the nation and is one of three places in the world where the motorsports industry is so strong.

But Rep. Bob Cherry, R-Greenfield, said he doesn’t understand the point of creating the low-interest loan fund for auto tracks that haven’t actually asked for help. Rep. Randy Truitt, R-West Lafayette, said he’s concerned that the proposal would not require the Indianapolis Motor Speedway to repay the state loan if the other sources don’t generate enough revenue.

And Rep. Tom Dermody, R-LaPorte, complained that the bill will simply take money from one private industry—horse racing—and give it to another. That was the focus as well for testimony from John Keeler, a lobbyist for Centaur Holdings LLC, the company that owns racinos in Indiana—Hoosier Park in Anderson and Indiana Grand in Shelbyville.

“This amounts to a $200 million tax on the racinos over period of 20 years. It’s highly inappropriate that the racinos should be put in a position to subsidize the motor sports industry,” Keeler said. “There’s no nexus between the horse racing and the racino industry and motor sports.”

Ways and Means Chairman Tim Brown, R-Crawfordsville, delayed a vote on the amendment and the bill, and said it will be reconsidered on Tuesday morning.

But the committee did approve part of the plan as an amendment to SB 528, which is legislation meant to help the state’s casino industry compete with new gambling operations in other states. The committee passed that proposal 11-10 but has not voted on the amended bill. That’s expected on Tuesday morning as well.
 

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  • what about the horses
    The Banks turned the George family down because putting in lights was and is a bad business decision but our State says they'll give the Georges a 100 million. Isn't that not unlike a person buying a home they can't afford and the government giving them the money?
  • Unexpected Funniness
    A few observations: 1) The grant/loan/subsidy (whatever anyone wants to call it) is smart business and enhances what is already a half-billion dollar verified bump to the state's economy. Anyone jerking their knees uncontrollably over this non-issue has a complete lack of understanding of a bigger picture. 2) Burl's idea ranks among the most blindly foolish notions ever uttered. I understand disdain for the Hulman George family, mostly by those outside looking in with a grudge, but come on. The 500 predates the lives of anyone who reads these cute little columns and comments and will be here long after our remains fertilize earth. It would be nice if folks considered actual facts prior to pontificating.
    • Glad to see this
      Glad to the House did not just rubber stamp the Senate Bill. The Senate bill was nothing but a 100 million dollar grant to IMS.
    • How about this?
      Buy IMS from the H-G clan. Multi-governmental entity that enters a public-private with an organization like USAC to run the Indianapolis 500. Meanwhile, that government entity that owns and operates the facility, transforms the IMS into a sort of "Indianapolis 500 Park and Historic Site". Non-cost effective infrastructure is eliminated, a "spruce up" of infrastructure that is currently useful but in disrepair takes place, and a community/convention facility is built within the grounds, a new motor lodge/inn/hotel of modest size is built outside it. The Indianapolis 500-Mile Race becomes the one and only annual racing event at the Speedway, capacity 150,000. The rest of the year it is a public park with public/private facilities, and maintains the event as The Greatest Specactle in Racing for the sake of tradition and profitability. Once the purchase price has been regained, the future monies earned are put back into the maintenance of the facility first, and then what is left is placed into interest-bearing accounts for which said monies are designated for the local communities to include charity organizations.
    • Hmmm
      Methinks it's time to look into Rep Turner's hobbies, friends and investments. Smells like cronyism...and wealth distribution.

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