Horse race subsidies come from a "sin tax" on various forms of casino gambling, including off-track betting on races. Under the governor's proposal, that $9.1 million in revenue would now support State Police crime labs. Money from state taxes and fees currently financing the crime labs would then be available for other purposes.
The governor is right to propose this. Horse racing is not a core government function. Police work is. Realigning this casino tax revenue to an activity like police labs is a necessary recognition of basic state priorities.
Horse racetracks claim that the current subsidy helps create jobs in their industry and in related businesses, benefitting Michigan directly and indirectly. But this argument can be made by industries that don't receive subsidies, and unsubsidized industries can legitimately question why they should pay taxes, thereby lowering their own ability to create jobs, in to support someone else's business. In fact, there is no good economic evidence that they should.
The horse racetracks also complain that their form of legal gambling has been harmed by competition from Indian casinos. Yet horseracing long enjoyed a state-granted monopoly on legal gambling in Michigan. The fact that this extraordinary privilege has been taken away and that horse racetracks must now compete for business is not a reason they should get a subsidy.
Given numerous statements from officials in recent years to the effect that state government has been "cut to the bone," the sin tax revenue that pays for this subsidy should have been diverted to essential government functions long ago. The governor should be applauded for recommending it.