The pot of money that pays for state employee's health insurance would be tapped for $7 million to loan to several horse racetracks under a little-noticed part of an alternative proposal to help the horse industry offered Friday by Senate President David Williams, R-Burkesville.
Under Williams' plan, approved Friday by a Senate committee and the full Senate, the Personnel Cabinet would transfer $7 million from the state employee health insurance trust fund to the Kentucky Horse Racing Commission no later than July 1, 2009.
The commission, in turn, would loan $6.5 million to Ellis Park in Henderson, $75,000 to Thunder Ridge in Prestonsburg and $25,000 to the Red Mile in Lexington. The loans must be repaid to the insurance trust fund at 6 percent interest, starting with at least $1 million per year in 2011.
The remaining $400,000 would be given to Ellis Park as part of the Kentucky Thoroughbred Development Fund.
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Ellis Park owner Ron Geary has threatened to close his track for good on Labor Day weekend if the legislature does not approve slot machines at tracks, which is the proposal approved Friday in the House but opposed by Williams.
Other track owners also complain of losing horses to states with purses fattened by revenue from slot machines.
The Senate did not discuss the provision for the loan, found on page 267 of the 269-page bill.
A spokeswoman for Williams confirmed the proposed loan program and said that 6-percent interest would produce a better return on the funds than they would normally get in the insurance trust fund.