Keeping the Garden in The Garden State

New Jersey Governor Chris Christie, who came to power in 2009 promising needed budget cuts, made a false and damaging choice two weeks ago when he aligned himself foursquare with the state's gambling lobby at the expense of its horse industry. The proposed result--the swift closure of the Meadowlands, the most important racetrack in the state--may save a few million dollars in the short run. But it will cost thousands of New Jerseyans their jobs and deprive state coffers of hundreds of millions of dollars in revenue lost when all the horse people take their business to greener pastures.

The episode is sorry but frequent example in the lack of creativity and inclusion in state politics in the Garden State. For decades, politics in Trenton has been controlled by Atlantic City's gaming interests. Backed by their southern Jersey politicians in the state legislature, big gaming corporations have blocked all attempts to bring a worthy casino to the renowned but battered racetrack in East Rutherford. They claimed that Atlantic City's economic welfare would be hurt by upstate competition--that those buses filled with senior citizens would no longer roll down Route 9.

Not an illegitimate economic or political argument, to be sure, if you assume that the consumer market for gambling and racing in New Jersey is zero-sum. But of course it's not. A state-of-the art racing and gaming complex in East Rutherford, just minutes from Madison Avenue and Broadway, and now served with a new rail line, would draw new patrons to the Garden State. Folks from New York, Connecticut, and elsewhere, who don't want to make the long drive down to the Shore, would happily get off at Exit 16W to lose their money. The loss of revenue to Atlantic City would be recouped--and then some--by the added revenue created upstate just a short jog from the Lincoln Tunnel.

If this were all to the debate, it's possible that the Governor would have a plausible position to defend. But it's not and he doesn't. At the same time that many of these gaming companies were exerting their political influence to keep the Meadowlands out of the gambling business they were funding and benefiting from gaming investments in out-of-state racinos (racetrack and casino) in Pennsylvania and elsewhere. They wouldn't go for in-state competition for Atlantic City, which would have kept needed tax revenues in New Jersey, but they were all for generating those tax revenues for neighboring states.

And for this betrayal of a state interest they were rewarded. New Jersey has subsidized the gaming industry over the years with billions of dollars in tax breaks and the like-- several orders of magnitude more than Trenton ever gave to save the horses. Two years ago, in fact, what Trenton did to kick the can a little further down the road was to force Atlantic City to pay $30 million to the horse industry to keep it afloat. As a matter of pure mathematics, you would think that $30 million was a small price for the gaming industry to pay in exchange for the nearly $9 billion in state subsidies from 2004-2009. You would be wrong.

The stranglehold Atlantic City possesses over Trenton instead has choked the life out of the state's once-grand horse industry, which has no clear power center or financial prowess. As a stand-alone racetrack, and without any major capital improvements (or marketing, etc) in decades, it is true the Meadowlands has been unsustainable (and almost unmanageable). Which is why the state's entrenched equestrian community--hundreds of thousands of acres strong and full of people who are used to making accommodations to get back onto a horse-- have begged state politicians to incorporate the Meadowlands into a comprehensive gaming and racing plan. Siding again with Atlantic City, it is this concept that Gov. Christie said "no" to earlier this month.

At a time when most state politicians are looking to save jobs and keep industries afloat, and with unemployment as high in New Jersey as the national average, the Christie plan is a costly choice. By some accounts, approximately 7,000 horse-related jobs in New Jersey will be lost by the closure of the Meadowlands and the concomitant loss of the horse racing and breeding industry in the Garden State. Are those people going to move out of the state? Or are they going to apply for unemployment benefits? Are gaming corporations going to hire 7,000 New Jerseyans to offset the loss at a time when Atlantic City itself is seeing a slump? These are questions that New Jersey's elected officials have not yet answered (in public) even as they maneuver to smother horse racing out of existence.

There are smart ways to cut a budget and not so smart ways. The answer in New Jersey is not to shutter an industry. It's not to send hundreds of millions of dollars of business away to its neighbors. It's not to continue to give billions to big companies who aren't willing to be good corporate citizens for all New Jerseyans. The answer is to get the big gaming companies to work with the horse industry to create an international, world-class gaming and racing destination in East Rutherford. It's been done in Toronto. It's been done in Dover. It's been done in Pennsylvania and New York. It's time to keep the garden in the Garden State.