Pennsylvania’s horse racing industry says it’ll be left in the dust if Gov. Tom Wolf gets his way and lawmakers sign off on a plan to reroute $200 million in industry assistance to a scholarship program for students enrolled in the commonwealth’s 14 state-owned universities.
The Wolf administration says its second try at winning legislative authorization of its Nelle Bly scholarship program also will relieve some of the pressure the commonwealth is feeling from the ongoing “brain drain” crisis, and declining enrollment at state-system schools.
But opponents say the money now being funneled to the Pennsylvania Race Horse Development Trust Fund is needed to prop up Pennsylvania’s ailing horse racing industry, which is suffering from declining attendance and competition from casino gambling.
First created in 2004 when the state legalized slot machines, the trust fund has been the beneficiary of hundreds of millions of dollars in taxpayer support. Between 2017 and 2020, it received more than $651 million in assistance. And in the new budget year that starts July 1, it’s set to receive $239 million in aid.
According to the state Department of Agriculture, the fund “receives revenue generated by licensed gaming facilities. Proceeds are distributed to horsemen’s organizations for health and welfare programs, to support racing promotion, and are proposed to support the Nellie Bly Tuition Program.”
More than 15 years after its founding, Wolf administration officials say they are concerned the fund is being used more to prop up the state’s horse racing industry rather than just support it.
What Supporters are Saying
Named for Armstrong County investigative journalist Nellie Bly, the scholarship program will be available to in-state and out-of-state students, covering the full cost of tuition up to six years for full-time students. according to the Wolf administration.
Scholarship recipients will be expected to stay in the commonwealth for time equal to the number of years they received the funds. If they leave early, the grant turns into a loan with “reasonable interest” that recipients will be expected to repay.
About 25,000 low- to middle-income students are expected to benefit from the program. Administration officials said they anticipate the fund to be a recurring source of aid for students in need, prioritizing Pell Grant and PHEAA aid recipients first.
Proponents of the scholarship program say it will keep young Pennsylvanians in the state longer through its eligibility requirements.
“Right now we are losing some of our best and brightest Pennsylvanians to other states,” Wolf said, calling the proposed scholarship “an investment.”
But the investment in education isn’t selling some.
What Opponents are Saying
In a February letter responding to Wolf’s proposal, the Pennsylvania Equine Coalition, a statewide organization that represents more than 10,000 owners, trainers, drivers, and breeders in Pennsylvania, called the redistribution a “raid,” adding that it would spell the end of the industry in the commonwealth
“Eliminating horse racing and breeding would have far-reaching negative impacts throughout the agriculture industry, Pennsylvania’s leading economic sector, as well as the broader state economy,” Pete Peterson, spokesperson for the Pennsylvania Equine Coalition said. “… Everyone recognizes that college debt and rising tuition rates are major problems, but you don’t fix one debt problem by putting an entire sector of the agriculture industry out of business and thousands of people out of work.”
The Wolf administration told the Capital-Star that while the majority of the Horse Racing Development Trust Fund would be pulled for the scholarship, the remaining $39 million would still go to support the fund.
Pennsylvania’s horse racing industry has seen a decline in spectators since state lawmakers authorized slot machines gambling. In 2018, the Philadelphia Inquirer reported that attendance at all six of Pennsylvania’s race tracks fell to approximately 580,000 spectators or about 650 people per race.
On a call with reporters in February, Wolf made his position on the allocation of state dollars to horse racing clear.
“I don’t know about you, but I would rather bet on the future of our students than subsidize out-of-state racehorse owners,” Wolf said.
A look at the Pennsylvania Department of Agriculture’s contract report, containing the department’s allocations to various contractors, shows that in the 2019-20 fiscal year, more than $963,000 in grants was awarded to horse breeders in states such as Ohio, New York, New Jersey, Maryland, Kentucky, Illinois, Indiana and Michigan and to breeders in Ontario, Canada and Sweden under the Pennsylvania State Breeders Development Fund. Approximately $5.7 million in grants was awarded to in-state breeders.
What Schools & Education Officials are Saying
The proposed scholarship program is also viewed by supporters as a way of helping the 14 state system schools recover from declining enrollment.
From 2010 to 2019, Pennsylvania State System of Higher Education (PASSHE) Schools logged a 20 percent decline in enrollment across the state system, amounting to the loss of 24,019 enrollments, western Pennsylvania news outlet TribLive reported in 2019.
Just one of the 14 state schools had a single-digit loss, while the rest recorded double-digit declines.
The three largest declines in enrollment include: Cheyney University, 61 percent decline in enrollment; Mansfield University, 51 percent decline and Edinboro University, 46 percent decline.
As the trend continues, education officials across the state are pointing to the Nellie Bly program as a path to better enrollment numbers.
Shippensburg University President Laurie Carter said she believes the rising cost of tuition is to blame for declining enrollment.
Carter, a first-generation college student, said she’s “heard of students struggling to pay for school.”
She recalled her own hardship of trying to “fill the gaps” between her college costs and what her loans would cover, noting that for many students “[Nellie Bly] would be the difference.”
The Association of Pennsylvania State College and University Faculty, an organization that represents professors, coaches and other faculty at the 14 state schools, has also thrown their support behind the proposal.
— APSCUF (@APSCUF) February 3, 2021
What Students are Saying
For students at PASSHE schools, the Nellie Bly scholarship program is a leg up on meeting their educational goals without the fear of insurmountable student loan debt.
Sam Bohen is a senior majoring in English at Edinboro University in Erie County.
Bohen faces more than $40,000 in student loan debt when he graduates and he’s not alone.
In 2019, 64 percent of Pennsylvania college graduates had student loan debt, according to the report.
“This is money our young Pennsylvanians could be putting back into our economy,” Wolf said.
When compared to other public and private colleges and universities in the commonwealth, Edinboro has the fourth highest average student debt per borrower at $42,694 – a number that has often led Bohen and his fellow students to reconsider their areas of interest and study in favor of a more “practical” major – one that will pay the student loans.
Bohen told reporters in February, “student debt will shape who we will become.”
Bohen spends his days in classes and his nights working to be able to afford rent, books, car insurance and other expenses that are not covered by loans.
The proposed Nellie Bly Scholarship program, he said, would be “incredibly helpful to students at state schools.”
”Many of us want to stay in state,” Bohen said. “[We] want to improve the state. I, for one, want to stay in Pennsylvania when I graduate. I want to be a part of the future of our commonwealth”
To that end, Bohen said he believes the Nellie Bly Scholarship Program would help Pennsylvania’s college students do both.
“Graduates should be able to bet on themselves,” Bohen said.