State late in paying breeders Money awarded for dogs, horses that win races

By John Stearns
The Arizona Republic
Nov. 28, 2002

Breeders of race horses and dogs are feeling a financial pinch from the Arizona Department of Racing, which has failed to make quarterly "breeders award" payments a month after the money was due.

"In 20 years, this is the first time they've ever gone over their deadline," Bill Rice, a greyhound breeder and spokesman for the Arizona Greyhound Association, said Wednesday.

Some of the group's 100 members are complaining, but with the department placing the blame on budget and staffing shortages, Rice is sympathetic - so far.

"If I thought the department wasn't trying, I would be jumping up and down and kicking and stomping," he said.

Department Director Wade Turner hopes to make the payments in the next few weeks for awards earned in the quarter that ended Sept. 30.

It's unclear how much money is due breeders, who divided $55,827 in the same quarter a year ago, typically a slower racing period.

About $850,000 was disbursed last fiscal year under a complicated distribution formula, with a little more than half going to dog breeders and the rest to horse breeders. The account had $29,118 on Wednesday.

Awards go to breeders of Arizona-bred horses and dogs that win their events. The payments are intended to encourage breeding winning animals in Arizona and support the industry and related businesses.

Turner doesn't know the ramifications for missing the Oct. 31 payment deadline.

State rules require the awards be paid within 30 days. A state Attorney General's Office representative was unavailable for comment late Wednesday on the significance of the non-compliance.

"I'm sure they're unhappy that we're in this situation," Turner said of breeders. "Under the circumstances, it's been, from our standpoint, unavoidable" that resources had to go to more critical func- tions.

Turner said he lost most of his accounting staff last summer when they took other higher-paying jobs in the state. As a result, awards can neither be calculated nor paid.

The department also faces a 10 percent, or $265,000, cut as part of the state's budget deficit, putting further strains on operations, Turner said.

Frank Covello, president of the 425-member Arizona Thoroughbred Breeders Association, said the late payments would hurt smaller breeders who are barely making it, rather than those with larger operations.

"The majority of breeders in the state aren't large, and they aren't well off," said Covello, himself a breeder.

Some may delay payments to suppliers as a result of the late awards, he said.

Daily expenses for a brood mare and her foal can range from $20 to $34, he said. "It gets expensive. That's why breeders awards need to be timely."

Covello, who has six brood mares with a partner, is eager to get his award, too.

"Things get a little tight when you're expecting to get some money in," he said.

Gene Fleming, who has as many as 250 horses at his Fleming Thoroughbred Farm in Avondale during peak breeding season, had some winners last quarter for which he's awaiting payment.

"It just adds a little more to the bottom line," Fleming said. "We don't depend on them to stay in business and everything, it's just kind of an incentive to try to breed better horses here in the state."

Breeders' awards payments fluctuate with department cash flow, Turner said. Last fiscal year, breeders got 8 percent of each dollar won by a qualified, Arizona-bred animal. There's a good chance that percentage will decrease this year, he said.

Aside from dealing with the delinquent awards for the fiscal first quarter, Turner wants to check that last fiscal year's payments were calculated correctly.

"The thing that I'm wanting to ensure is that when we paid $850,000 last year that it was consistent with our rules in the formula," Turner said.

Without an accounting staff to check, he doesn't know if breeders were overpaid, underpaid or paid correctly.

Reach the reporter at john.stearns@arizonarepublic.com or (602) 444-8979.