Editorial: Shut the gate on racino racing day tax credit

Here’s one tax break the Legislature should not let out of the starting gate.

A bill introduced by Sen. Phil Griego, D-San Jose, would give racinos a tax break about equal to what it costs them to put on race days — and the general fund (provided by New Mexico taxpayers, thank you very much) could end up footing the bill to the tune of $5.76 million in lost gaming revenue next year.

The committee substitute to Senate Bill 265 ostensibly is designed to increase the number of race days — something New Mexico horsemen favor — and offset the expense to racino owners.

Whoa! Wouldn’t many other business owners like to have taxpayers to pick up their expenses? You bet.

Owners of racinos, which can only exist if they have horse racing, say it costs them from $20,000 to $35,000 to host each day of live racing. The proposed tax break is — surprise! — $20,000 for each day of live horse racing, with some limits.

Currently, racinos pay the state as a gaming tax 26 percent of their “net win” — the amount wagered on slot machines minus payouts and approved regulatory fees. In 2012, that amounted to more than $62 million.

To qualify for the proposed credit, a racino would have to add at least one additional day of live racing the first year it claims the credit and at least one additional day of live racing for each of the following four years.

The Legislative Finance Committee’s fiscal impact report questions whether there will be adequate revenue to cover the recurring expenditures. It also notes that it may be difficult to track the real costs and benefits of the credits.

While the sport of kings may be waning in popularity, it shouldn’t be up to taxpayers to subsidize keeping it alive by making them pick up the tab for privately owned racinos to expand their racing schedules. This lame pony should stay in the barn.

This editorial first appeared in the Albuquerque Journal. It was written by members of the editorial board and is unsigned as it represents the opinion of the newspaper rather than the writers.