Taxpayers Say Neigh to Pimlico Plan Barn-doggle

$760 million budget shortfall for fiscal year (FY) 2025, and the deficit will balloon to $3 billion by FY 2028. Maryland taxpayers already foot some of the highest bills in the country, and more red ink will only lead to more tax hikes. And now, state residents will be paying for a reckless $720 million gamble on a dying venue hosting a struggling sport. On May 9, Governor Wes Moore signed a bill that “enables the state to take ownership of Pimlico Race Course,…renovating it and eventually running races there.” The Moore administration may think they have picked a winning horse, but taxpayers are giving this barn-doggle a resounding “neigh.” It’s time for horse racing to stand on its own four legs and reject runaway subsidies.

Horse racing in Maryland has seen a slow and steady decline since the days of Seabiscuit and War Admiral. In the past ten years, attendance at Maryland’s two thoroughbred tracks (Pimlico and Laurel Race Course) has declined roughly 66 percent. From parking lot craters to dysfunctional bathrooms to unusable seats, the remaining spectators have plenty to complain about. Gov. Moore and his legislative allies believe that they can turn things around through a costly purchase and “investment” into Pimlico Race Course. While pundits and policymakers frequently refer to $400 million in authorized bonds for Pimlico’s redevelopment, a state fiscal analysis notes, “payments (principal and interest) [will] total approximately $720.0 million over the 30-year period.” The state wants a clean slate and will raze and rebuild the facility while paying the current owners (the Stronach Group) about $5 million per year for Preakness rights and betting proceeds. The plan’s architects also envision using some of the bond money for a training facility and housing to support Pimlico workers.

Gov. Moore believes that the Pimlico redevelopment plan will benefit the blighted community surrounding the facility. Baltimore’s Park Heights neighborhood is riddled with poverty, vacant homes, and high crime. Having a top-tier horse racing course in the neighborhood should provide economic opportunity, but in practice, Pimlico creates more problems than it solves. Baltimore Mayor Brandon Scott grew up in Park Heights and remembers the horrendous traffic, terrible parking restrictions, and onerous police presence that accompanied race days. Scott reflects, “When I was growing up, we felt like Preakness was in Park Heights but not for Park Heights.” Community development leader Yolanda E. Jiggetts notes the “fun fact” that “these businesses in Park Heights actually lose money historically during the Preakness.” Even with a dwindling spectator base, crowd sizes in the thousands are sufficient to disrupt everyday activity in Park Heights. Unfortunately, crowds are largely put off by the rough-and-tumble reputation of Park Heights and think twice before venturing into town to patronize local businesses.

The Moore administration wants to change this sad status-quo and envisions the revitalized Pimlico as a host for community events and local profit-sharing initiatives. In reality, stadiums and sports venues usually fail to spur development despite promising initiatives touted by politicians. Sports economist Michael Leeds estimates that a baseball team playing 81 regular-season home games each season “has about the same impact on a community as a midsize department store.” And, of course, the typical baseball team has far more fans and hosts far more high-profile events than a racetrack could ever hope for. In their blistering critique of sports venue subsidies, Brookings economists Andrew Zimbalist and Roger Noll note, “A new sports facility has an extremely small (perhaps even negative) effect on overall economic activity and employment. No recent facility appears to have earned anything approaching a reasonable return on investment. No recent facility has been self-financing in terms of its impact on net tax revenues. Regardless of whether the unit of analysis is a local neighborhood, a city, or an entire metropolitan area, the economic benefits of sports facilities are de minimus.”

Pimlico will not defy the economic laws of gravity. Maryland policymakers should squash these costly redevelopment plans and give the funds back to residents through lower taxes. Gov. Moore needs to quit horsing around and put the Pimlico redevelopment plan out to pasture. 

David Williams is the president of the Taxpayers Protection Alliance