States should not be in the business of subsidizing owners, breeders, and exhibitors who abuse or neglect their horses. That should go without saying, but it still happens. Steps are being taken in New York and Kentucky to link incentive program payments to animal welfare, and other states should follow those examples.

Attracting businesses to a state by sweetening the pot with tax breaks or other financial considerations is common.  Fast Track Productions, Inc., a subsidiary of Disney Studios, is a good example. Fast Track reportedly is eligible for some $800,000 in Kentucky tax credits as a result of coming to the state to film portions of an upcoming movie based on Triple Crown winner Secretariat. The idea is that the cost of the government incentives will be more than offset by the extra revenue generated by increased business activity in Kentucky.

Incentives for horse businesses work on the same principle. They are designed to entice breeders to set up shop in a particular state by providing financial incentives to breeders and owners when state-bred horses win races or other competitions. State-bred programs can be very lucrative and the consensus is that they are successful. The New York Thoroughbred Breeding and Development Fund, for example, distributes more than $60 million a year in the form of breeder, owner, and stallion awards and purses for races restricted to New York-breds. That’s serious money, and a good reason to raise horses in New York.

Eligibility for incentive money generally is based solely on whether a horse meets the technical requirements for registration as a state-bred. Whether a breeder or owner is a responsible horse owner who takes good care of his or her horses seldom is a factor. Earlier this year, prominent New York breeder Ernest Paragallo was charged with multiple counts of animal cruelty and neglected horses were seized from his Center Brook Farm. At the time, despite the pending criminal charges, Paragallo still was eligible to receive fund money based on the performance of his New York-breds. It was a public relations nightmare, and the Breeding and Development Fund acted quickly to suspend incentive payments until the criminal charges are resolved. Racing licenses for Paragallo and his children also were rescinded.

In August, the Breeding and Development Fund took a more proactive stance, approving a policy for automatic suspension of incentive fund payments for anyone charged with animal cruelty or neglect. Under the leadership of Chair John D. Sabini, an inspection program is in the works to ensure that state incentive money goes only to breeders who are providing adequate care for their horses.

The Kentucky Horse Racing Commission oversees a similar incentive program for Thoroughbreds, Standardbreds, and other competition horses bred in the state. The program is funded through a six-per-cent sales tax on stallion breeding fees. The Kentucky Walking Horse Breeders Incentive Fund (KWH-BIF) administers the portion of the fund distributed to state breeders of walking horses. Payout for 2009 was estimated in the neighborhood of $375,000, but in February 2009, growing concern over inadequate enforcement and failure to report violations of the federal Horse Protection Act led the Commission to defer those payments. The Horse Protection Act is supposed to eliminate the practice of "soring" walking horses to achieve a high-stepping gait favored in the show ring. So far, it has not worked very well.

Following a full investigation, the Commission in September approved the KWH-BIF as the affiliate organization to distribute state incentive funds to walking horse breeders. Approval was contingent on several mandates, however, including requirements that all shows at which incentive fund points can be earned utilize Horse Inspection Officers from one of three approved groups and that all Horse Protection Act violations must be reported.

These are small, but important steps, and New York and Kentucky should be commended for taking them.