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Russell Redding, the Pennsylvania secretary of agriculture, speaks about the governor's budget proposal on Tuesday before the Pennsylvania State Council of Farm Organizations.

Gov. Tom Wolf plans to maintain all of the ag programs created in last year’s PA Farm Bill, but his new budget could spell trouble for the horse racing industry.

Announced Tuesday as part of a $36 billion state budget draft, Wolf’s agriculture proposal is nowhere near as splashy as last year’s, which included $24 million in new aid for business planning, youth programs and dairy processing.

The Democratic governor plans to maintain the $23 million the Legislature approved for the Farm Bill, but no new Farm Bill programs are proposed this year, said Ag Secretary Russell Redding.

Though the department may make small changes to the new programs, Redding called the Farm Bill a resounding success.

“The fundamentals are right in every one of the programs,” he said.

Wolf’s proposed budget includes a 5% increase for the Ag Department’s general operations and a $1 million increase for the Pennsylvania Agricultural Surplus System, or PASS.

The program, set for $2.5 million this year, reimburses farmers and processors for providing food to the charitable food system. Some of this food might otherwise go to waste because of a lack of market.

Over the past three years, the program has channeled 11 million pounds of food to needy people, Redding said.

Pennsylvania Farm Bureau supports the program’s funding increase.

Those increases are minor compared to the $204 million Wolf plans to take from the Race Horse Development Trust Fund to create scholarships for students at state-owned universities.

The proposed Nellie Bly Tuition Program, which Wolf said could benefit 25,000 students, is named after a journalist who wrote a groundbreaking exposé of a mental hospital.

Earlier in life, Bly dropped out of what is now Indiana University of Pennsylvania because of financial hardship.

Wolf said too many college students find themselves in a similar situation today.

“Let’s bet on our kids instead of bankrolling race horse owners,” he said.

That wasn’t what people in the racing industry wanted to hear. The trust fund is the primary source for purses and breeder incentives.

The fund was created just three years ago specifically to prevent the state from taking money designated for the racing industry, said Pete Peterson, executive director of the Pennsylvania Equine Coalition.

“This raid would result in the end of horse racing in Pennsylvania,” he said.

Jake Corman, the Senate majority leader, said lawmakers would need to weigh the scholarship idea’s effect on purses and track finances.

Redding argued that the state has spent far more on the race horse industry than Wolf is proposing to take.

“This will be one of those points of conversation many times over this budget season,” Redding said.

Wolf’s ag budget also includes a few customary cuts that are unlikely to actually happen.

For years, governors have zeroed out items like agricultural research, the All-American Dairy Show and hardwoods promotion with the expectation that the Legislature will restore them.

These so-called legislative add-ons amount to $7 million of the agriculture budget, a relatively small chunk of the $171 million the Ag Department got last year.

Agriculture has a relatively large number of add-ons, though other state agencies have more expensive programs in limbo.

Redding said legislative add-ons have been a part of the negotiations since he started working with state budgets in the 1990s during Republican Gov. Tom Ridge’s administration.

The governor’s budget proposal is designed to highlight his priorities and vision for the state. When things are left out, there’s an opportunity to re-evaluate and make a case for the programs again.

“It’s frustrating, but it’s not a bad thing,” Redding said.

Among those who have been frustrated with add-ons is Rep. Martin Causer, chairman of the House Agriculture and Rural Affairs Committee.

“Quite frankly, it shouldn’t be a game every year of eliminating funding just to have to put it back,” he said at a budget hearing last spring.

Redding said the proposed budget also offers funding for agricultural workforce development and mental health.

And Wolf has brought back Restore Pennsylvania, a plan to fund flood control, Chesapeake Bay conservation and rural broadband.

The effort is tied to a natural gas severance tax, which is unpalatable to Republicans.

Wolf has also proposed charging every municipality in the state a fee for State Police services.

That’s a change from his 2017 proposal that would have only charged a fee to localities without their own full-time police department. Republicans worried that strategy would have disproportionately affected rural areas.

Wolf’s overall budget includes an increase of $1.5 billion, or 4%, over the current budget.

Republicans said they shared Wolf’s goals of safe schools and growing opportunity, but they argued the governor wanted to spend too much.

“We’ll pull him back to the middle,” Corman said.

The House Appropriations Committee will hold the first hearing on the ag budget on Feb. 26.