Wednesday, June 22, 2011

MN Racing Commission Passes Resolution to Try and Prevent Racing Shutdown

There was a singular action item on the agenda for the Monday, June 20 special meeting of the Minnesota Racing Commission held at Canterbury Park: To review a resolution regarding the potential state shutdown (background here) and its effects on Canterbury Park and Running Aces Harness Park.

The initial resolution for consideration was drafted by legal counsel for the racetracks and horsemen’s associations.  The outline was simple and to the point.  After 17 points outlining the findings of fact the resolution they were asking to be adopted by the committee concluding by resolving,

“That all possible legal steps be taken to ensure that properly licensed horse racing and card club activities not be shut down as a result of the budget impasse.”

There is no way that a politically appointed body was going to support “all possible legal steps” when such steps would include suing the government that appointed them - especially considering the rock and a hard place position the Commission would be in with their legal counsel being assigned from the Attorney General’s office.

MRC staff also drew up a draft resolution for consideration that was understandably a bit weaker than the horsemen’s draft.  It had its own findings of fact and finished by resolving,

“that the Commission and it’s staff will continue to work with the requisite authorities to bring their attention this potential calamity and will do its best to keep industry leaders informed of progress regarding legislative, executive, or court authorization of appropriations.”

The horsemen brought a howitzer to the table while the Commission proposed little more than the status quo.  Neither was going to garner agreement from both sides so there was a brief recess for all to get together and formulate a new joint draft.  Though the Commission may be in a more politically challenging position than the horsemen, it was clear from the comments of the Commissioners that none wanted to see racing shut down and all understood the potential long term damage that would be done should it occur.

Also taken under consideration were a couple of clauses in the Commission’s draft resolution.  In the findings of fact by the Commission it was stated that:

“In the absence of legislation specifically appropriating funds for the continuing operation of the Commission for the next biennium, the Commission will have no authority to expend or release funds to pay for goods and services after June 30, 2011.”

It went on to state that if shutdown were to occur, “the licensed racetracks will not be permitted to operate according to the regulatory requirements continued in M.S. ch. 240.”

Attorneys for the horsemen argued that these provisions should be left out of any compromise agreement.  Tomorrow petitions are scheduled to be heard by a Ramsey County Court judge on how a shutdown would proceed should it be necessary.  There could be the appointment of a committee or a special master that would determine which services are critical and need to continue operating and which would not.  The horsemen believe that there should also be a third category, as was in place when this specter loomed over Minnesota in 2001 and 2005, that is all agencies that do not rely on general fund money to operate should continue to do so.  In the case of the MRC, all its funds are generated through the license fees of the racetracks and personnel as well as the prepayment of certain fees for operation of the testing lab, stewards and staff at the tracks.  If the bill is paid on time, as usual, all the funds plus all the funds from licensing will be in the possession of the state and there is no reason for racing not to continue.

As far as the appropriations end goes, it could be argued that the MRC monies are already appropriated since statute reads that all monies collected would be appropriated back to the Commission.  That is, a specific appropriation isn’t necessary because it is automatic as written.  A perpetual appropriation, if you will. In the end, the findings of fact were taken from the horsemen’s draft and these potentially damaging admissions – which lawyers argue simply are not true or should be interpreted differently – were left out.

The final resolution, which you can read here, outlines all the reasons why the tracks should not be shutdown.  The final “be it resolved” clause reads:

·        "That all appropriate steps should be taken to pursue the uninterrupted delivery of properly licensed horse racing and card club activities in the event of a continued budget impasse and government shutdown; and
·         That the Commission and its staff continue to work with the requisite authorities to point out that this industry is totally self-funded  and to demonstrate the substantial and long lasting negative impacts that would result from a cessation of these activities; and
·         That the Commission does its best to keep industry leaders informed of progress regarding legislative, executive, or court authorizations of appropriations."

The final work product turned out to be a good melding of the staff and horsemen’s draft and was a result of mutual action for the common good – something the Governor and Legislature could learn from.


dave astar said...

Ted, very good thoughts. I would only add that this may push some owners over the edge regarding Minnesota. If the agencies that exist to regulate revenue generating operations for the state such as the Minnesota Racing Commission are shut down because the state is out of money, such an oxymoronic event requires nothing more to be said about the ridiculous political environment in Minnesota related to racing. Last year the 4th of July weekend generated well over $1,000,000 in taxable revenue alone!!!

I fear that if the shutdown lasts more than a few days, stables may pack up and leave and may not come back in future years. I only hope the damage caused by a shutdown is not long lasting.

Ted Grevelis said...

I agree with you, Dave. It's tough enough to make money here. We race here because it's home or we love it (or both!). But at some point, enough is enough. We have such a great atmosphere here, it'd be a shame for it to disappear.

See you Sunday in the paddock - good luck!