Woah, Nellie Bly — new scholarship program for Pa. college students would come out of horse-racing funds

  • Avi Wolfman-Arent/Keystone Crossroads
  • Ed Mahon/PA Post

Gov. Tom Wolf’s plan to tackle college debt in this year’s budget relies on a new scholarship program that could provide aid to thousands of students attending the 14 state-owned universities.

But to fund it, Wolf wants to touch a political hot potato — the commonwealth’s longstanding, and long-debated, subsidy program for the horse-racing industry.

By raiding the Pennsylvania Race Horse Development Trust, Wolf wants to earmark $204 million annually for the new Nellie Bly Tuition Program.

The Wolf administration says the scholarship would support students attending any of the schools in the Pennsylvania State System of Higher Education. The dollars would go to students who pledge to stay in the state after graduation — an incentive, administration officials say, aimed at keeping skilled workers in the commonwealth.

Students receiving the scholarships would have to remain in Pennsylvania for as long as they used the scholarships to attend a state school. If a student leaves the state before meeting the commitment, the scholarship converts into a loan the student must pay back to the state.

Eligibility requirements remain to be determined, but Wolf administration officials say they want the initiative to target students from low- and middle-income families. The dollars granted through the Nellie Bly Tuition Program would cover any costs — tuition, books, living expenses, etc. — that a student can’t meet with Pell Grants or other forms of assistance.

An estimated 25,000 students would receive money from the tuition program each year, officials said.

But to get those funds, Wolf will have to take on an industry that says it’s fighting for survival.

The Pennsylvania Equine Coalition — which represents owners, trainers, drivers, and breeders — criticized the proposal on Tuesday. Executive Director Pete Peterson said the proposal would “result in the end of horse racing in Pennsylvania by eviscerating the primary funding source for the purses and breeder incentives that serve as the lifeblood of the industry.” Peterson said lawmakers approved changes to the fund a few years ago, aimed at preventing exactly this type of transfer.

The coalition distributed a news release with statements from trainers, breeders, owners and others who all criticized the move.

“I cannot believe that our Governor would turn his back on the horse breeding and racing industry,” said Pat Chapman, the owner of 2004 Kentucky Derby winner Smarty Jones. “This would be absolutely devastating to so many of us in the horse business.”

The Wolf administration defended the proposal, saying it would help students avoid crushing debt.

“Let’s bet on our kids instead of bankrolling race horse owners and ensure the viability of the Pennsylvania State System of Higher Education,” Wolf said.

Republican legislative leaders aren’t embracing the proposal. At a Capitol news conference following the budget address, Senate Majority Leader Jake Corman, R-Centre, raised concerns about potential job losses.

“It makes for a nice line here, and that’s important for him,” Corman said of Wolf’s description of the proposal. “But as we go through, we need to vet these proposals, and see the total impact of them and then make a decision from there.”

The money for the horse-racing fund comes from a tax on slot machine revenue at casinos in the state. Wolf’s proposal also would eliminate state funding for purses, the prize money that comes with winning horse races.

Leaders of equine groups say lawmakers approved the subsidy back when they expanded gambling during Democratic Gov. Ed Rendell’s administration, because they knew the slot machine expansion would lead to people spending less money at horse tracks.

“In order to help make up for that decline, this was set up,” said Brian Sanfratello, executive secretary of the Pennsylvania Horse Breeders Association.

That purse money, Sanfratello and others say, trickles down to jockeys, trainers, veterinarians, farmers who provide straw for bedding and feed products, and thousands of others.

“Purses fuel our industry,” said Todd Mostoller, executive director of the Pennsylvania Horsemen’s Benevolent and Protective Association.

Money from slots provides almost 87 percent of the purse money paid at tracks in the state, according to February 2017 report from the Joint State Government Commission. Wolf said the money would be put to better use elsewhere

The scholarship program would be named after the late Nellie Bly, a journalist who became famous after going undercover to report on the conditions at an insane asylum. Wolf said Bly had to drop out of what is now known as the Indiana University of Pennsylvania after her father died and she couldn’t afford to attend. She moved out of the state to start her career.

“More than 100 years later, we still see too many of our young people forced to drop out of college or forced to move away from Pennsylvania or forced to begin their lives buried under a mountain of debt,” Wolf said.

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