Md. not holding its race horses

The Baltimore Sun

It's been a lonely year for the studs on Maryland horse farms.

The state's breeding operations, which have traditionally helped keep Maryland racing in a class above its neighbors, have seen a rapid drop-off since Pennsylvania began heavily subsidizing its racing industry through slot machine proceeds this year.

As higher purses lure better horses to neighboring states, Maryland breeders worry that one of the financial underpinnings of the horse industry - as well as a distinctive feature of the state's identity - may be on shaky ground.

Some Maryland breeders are even considering moving north.

Tom Bowman, a veterinarian who is part-owner of Northview Stallion Station in Cecil County, said business was off about 20 percent this year. He and his business partner are looking for land in Pennsylvania and plan to move part of their operation - one of the largest in the region.

"I bleed Terrapin colors and never want to leave the state," he said. "But we have to face reality. I have five children, three in the horse business, two veterinarians. They've got to have something to do."

The slowdown is hitting other Maryland farms, too. The number of foals born and registered in Maryland dropped by a third between 2000 and 2006, according to preliminary figures from the The Jockey Club, which keeps a national registry of horses. In the same period, Pennsylvania foal births grew 23 percent.

Now that slots parlors are open in Pennsylvania, the industry there appears to be growing even faster. The Pennsylvania Horse Breeders Association reports a 20 percent increase in foals born there from 2006 to 2007. The organization expects another 15 percent increase next year.

Maryland breeders, by contrast, say the foal numbers next year may be worse, with reports of 20 percent to 40 percent declines in the number of mares brought here to breed.

This contrast in fortunes has developed as the decade-long debate over legalizing slot machines in Maryland appears to be coming to a head. Most of the debate has centered on the possibility that slots could help close a $1.5 billion budget gap, but the fate of horse farmers occupies a special place in the argument.

Both former Gov. Robert L. Ehrlich Jr. and current Gov. Martin O'Malley have used horse farming to connect slot machines - which are generally supported by a blue-collar constituency - with the environmental movement and its supporters among the state's educated elite.

The governors have said that without slots, Maryland horse racing will wither. Without racing, the argument goes, horse farms will go out of business, and their pastures will be turned into sprawling new subdivisions, which in turn will lead to more air and water pollution.

"Horse farms occupy more acres than all of the land that has been protected by all of the state's preservation programs combined," O'Malley said recently.

Environmentalists didn't buy the argument when Ehrlich made it, and they're not embracing it now, either. It's unclear how much of the state's equine acreage is related to racing and how much to recreational riding. Furthermore, easements and restrictive zoning would prevent the rapid development of many of the state's horse farms.

And some argue that there's no reason for Maryland to subsidize a declining industry just because Pennsylvania is doing it.

"I have seen what I would consider heart-wrenching incidents where [other types of] businesses go under, people lose their jobs and their benefits, and nobody is bailing them out," said Democratic Del. Luiz R.S. Simmons, an attorney and slots foe from Montgomery County.

Regardless of whether it is enough to sway the debate, those involved in horse breeding say their plight is real.

"The last couple of years before Pennsylvania passed their legislation, I was able to convince people to hold on," said Billy Boniface, whose family farm in Darlington usually breeds 65 to 70 mares a year but this year saw 30. "Now it's just gotten to the point where I'm not able to do it."

The reason is easy to see. Maryland's breeding incentive program, one of the oldest in the nation, provides bonuses when Maryland horses win races in the state. The rates - which were cut this summer in response to budget shortfalls at the Maryland Jockey Club - are 10 percent of the purse for breeders, 10 percent for owners and 5 percent for owners of the stallion that sired the winning horse.

Pennsylvania's program - which is subsidized by proceeds from slot machine gambling - pays 40 percent bonuses to the owners of Pennsylvania horses who finish first, second or third at Philadelphia Park and 30 percent at Penn National. Breeders get 20 percent (30 percent if the stallion was also from Pennsylvania), and the stallion owners get 10 percent.

This month, for example, Splash 'n Go lined up for a race in Philadelphia Park at almost exactly the same time that Somethinaboutbetty entered the starting gate at Timonium. Both are bay fillies, both are four years old and both ran similar races, staking out early leads and hanging on under late pressure.

Even the purses for the two races were about the same: $30,240 in Philadelphia Park and $27,000 in Timonium.

But there was a big difference in the bonuses. The owners of Pennsylvania-bred Splash 'n Go took home a bonus of $12,096. For Maryland-bred Somethinaboutbetty, the bonus was a mere $2,700.

"Everybody's talking about sending their mares up to Pennsylvania," said Larry Murray, manager of Glade Valley Farms near Frederick, where Somethinaboutbetty was born. "We're just now seeing what the increased money up in Pennsylvania has done."

At Walnut Green, a farm in West Grove, Pa., about 10 miles north of the Maryland border, business is booming, said Mark J. Reid, the farm's part-owner. The tracks are paying "crazy money" for Pennsylvania-bred winners, and it has changed the entire business, he said.

"There is a definite shift north," said Reid, who lured his farm manager away from Northview Stallion Station. "We have clients now coming from as far away as Texas, Kentucky and New York who would never have considered Pennsylvania prior to this, and we have clients in Maryland who, while wanting to stay in Maryland, are sending mares up to take advantage of the program."

Pennsylvania's program is designed to increase the economic impact of that shift.

Maryland's incentive program has relatively lax residency requirements, so mares are often bred to out-of-state stallions and brought back here. Likewise, out-of-state mares have traditionally come to Maryland to breed and board before returning home.

But Pennsylvania's residency requirements are stricter, giving owners incentives to make sure their horses are bred, born and raised there. That means the population of mares boarded in Maryland farms has declined as well, eroding a significant part of the business, breeders said.

"With all the money, it's not a duck in, qualify and get out," said Mark A. McDermott, executive director of the Pennsylvania Horse Breeders Association. "We're trying to build the industry so they can sustain a 12-month-a-year operation."

Murray said Glade Valley is considering selling out entirely and moving up to Pennsylvania.

The farm isn't zoned for development, so unless the local government changed its designation, the owners couldn't cash in by replacing horses and pastures with townhouses or stores. Still, despite the infrastructure requirements for a horse farm, Murray said the move would be relatively easy.

"Our operation right now encompasses 1,000 acres, which we use very little of that for horses," Murray said. "We could probably get by with 150 acres, so if you were to sell 1,000 acres in Frederick County and buy 150 acres in Pennsylvania, it would work out very well."

Boniface, the president of the Harford County Council, is a bit more locked into his land.

His extended family lives in houses scattered on the hilltops of Bonita Farm, a 400-acre spread tucked behind an old stone church near Darlington.

On a recent morning, between treating a foal's cut ankle and racking hay, he took the farm's pride and joy, Deputed Testamony, the last Maryland-bred horse to win the Preakness, for a stroll in the pasture. Boniface helped deliver the colt on the day he turned 16.

The horse still looks dignified and even a bit frisky 24 years after he outran the field at Old Hilltop. But his back is a little more bowed than it once was, and he doesn't stand for stud anymore.

Selling out to developers isn't an option - the farm is in the state's agricultural preservation program - so the Bonifaces have moved on, to new studs and new ideas.

The family started with Christmas trees, and then William Sr., a dedicated oenophile, put in 2 acres of grapes. He's talking about planting 5 more, and the family is considering opening a winery one day. If the horse business doesn't turn around, maybe the family will raise organic cattle, Boniface said.

Horses will always be in the family's blood, Boniface said, but they may not always be the family's business.

"At the end of the day, people are going where the money is," Boniface said. "You can't blame them for that."

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