Two politically active horse-racing associations find themselves shifting from political favorites to outsiders.
The Thoroughbred Breeders' Association of New Jersey and the Standardbred Breeders and Owners Association of New Jersey joined a list of groups whose spending has been vetoed and angrily criticized by Gov. Chris Christie as “waste.” One reason for Christie’s action against the groups’ budgets: The administration was angered by funds set aside for lobbying. The Thoroughbred Breeders' Association’s prospective budget contained $40,000 to spend on hiring professionals to pressure legislators to adopt favorable policies, Christie spokesman Mike Drewniak said Friday.
“You could say that rubs us the wrong way,” Drewniak said.
While it wasn’t clear how the lobbying money would be spent, the horse-racing industry has called for allowing slot machines at racetracks to subsidize race purses. The activity raises questions about whether state money would be used to lobby state government to expand casino-style gambling to state-run facilities.
The administration’s veto drew attention to the horse industry groups’ overall rise in operating budgets — a 5.6 percent increase for the Standardbred association, and a 19.8 percent leap for the Thoroughbred Breeders' Association.
The administration also highlighted Thoroughbred spending $42,500 for the New Jersey Thoroughbred Festival and $10,000 for an annual awards banquet.
The governor had the power to stop the approval of the proposed budgets because a state body, the New Jersey Racing Commission, has to approve its spending. The commission reportedly signed off on the expenditures Jan. 20.
But an analysis by The Press of Atlantic City following the governor’s criticism found that the vetoed $40,000 for lobbying is a fraction of what both groups have spent in recent years to help sway policy.
Both organizations receive significant support from the state: According to 2008 tax-return disclosures, the Thoroughbred Breeders' Association received more than $2 million in state grants; the Standardbred association received more than $1.7 million. The funds come from a slice of prize purses won at the state’s racetracks, the Meadowlands and Monmouth Park. It is intended, in part, to provide benefits for horsemen, owners and breeders.
In 2008, the most recent year for which lobbying disclosures are available, Thoroughbred spent $102,599 on lobbying, while Standardbred spent $60,100.
Drewniak said the circular funding stream was a concern.
“These are state-funded bodies, which are receiving government funds and then spending money to lobby in Trenton,” he said.
Tom Swales, current president of the Thoroughbred association, representative Barbara DeMarco, and Dennis Drazin, a former longtime president, did not return calls for comment.
Tom Luchento, who heads the Standardbred Association, defended the need to lobby.
“I don’t begrudge the governor for doing this,” Luchento said. “But obviously we’d like to have a conversation with him about what a reasonable sum for lobbying might be.”
The Election Law Enforcement Commission, or ELEC, announced Friday that figures on what every interest group spent on lobbying in 2009 would be released March 10. Brigid Harrison, a political science professor at Montclair State University, said the groups should explain whether they used public money to influence public policy.
“When groups get state grants or subsidies, it’s my view that it might be a conflict to use that money per se to turn around and lobby the state,” she said.
“Often, they’re receiving grants for specific things, and the money for lobbyists comes from elsewhere. But the reality is that as long as there’s disclosure, these groups are not often challenged.”
Harrison pointed out that the Casino Control Act prevents casino owners from making political donations as representatives from other industries can. But casinos including Harrah’s, Borgata and Trump pay for lobbyists to go to Trenton.
Assemblyman Vincent Polistina, R-Atlantic, called for the associations to clarify whether any state funds had been used to lobby. “If there’s any indication of that happening, that has to stop right now,” he said. Meanwhile, he said the timing of the veto was significant, as Trenton prepares to consider the future of horse racing.
“The governor is sending a message now that this lobbying is a needless expense,” he said.
Christie’s veto comes at the end of a three-week stretch during which the administration has tried to chart a new course for horse-racing, gaming and sports enterprises in the state. To rebuild the unprofitable racing and sports industries, and to revive the declining revenues brought in by Atlantic City gambling, Christie created an advisory commission to suggest solutions for all three fields.
Since then, advocates for racing have argued — and lobbied strongly — that the state should now break Atlantic City’s monopoly on all gaming and allow slots-like video-lottery terminals to open at racetracks.
Threat to Atlantic City
Supporters of gaming in southern New Jersey, including the Casino Association of New Jersey, have also argued that the move would destroy the existing resort in Atlantic City.
Since founding the commission, Christie has notably held off his previous commitment not to introduce VLTs at racetracks. A spokesman said in early February that his position was influenced by fiscal mismanagement in Atlantic City’s own city government, which was detailed in a recent state audit. That shift had racing advocates cautiously optimistic that the governor was moving their way.
But Christie’s decision to veto the horse-racing associations’ budgets Wednesday has naturally created further uncertainty, Harrison said. “This shows they’re under the microscope too,” he said.
Pointing out that the governor has made similar vetoes four times in his first month in office, she said, “There’s now a real sense of trepidation among any public body regarding expenditures.”
“He’s changing the culture among these ‘shadow governments,’ you can call them,” she added. “And I’d expect to see them get the message. They will rein-in their spending. For a while, at least.”
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