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State contributions to Medicaid will take a direct hit if voters approve an initiative to legalize gambling on horse races, a trio of legislators charged at a press conference Thursday.

But Jon Freston, spokesman for Citizens to Put Utah First - the organization backing the initiative - said the Medicaid example is nothing but a scare tactic.A legislative fiscal note concludes that a new horse racing commission would require a tax subsidy of $137,000 the first year. That money, the legislators say,would cut into the general fund and therefore cut the state's Medicaid contribution.

Medicaid is a state-federal medical assistance program for very low-income people. For every dollar the state spends on the program, the federal government kicks in $3.

Sen. Robert Steiner, D-Salt Lake, said spending tax money on a horse racing commission was nothing but a "welfare plan for people who can afford to spend thousands of dollars on a hobby."

"Obviously this has nothing to do with Medicaid. How can bringing more money into the state than is coming into the state now have a negative impact on Medicaid or anything else," Freston said.

Steiner said backers of the initiative claim the commission can be self-supporting by imposing license fees. However, the legislative fiscal note indicates the initiative does not authorize the horse racing commission to set fees.

"What we're upset about is, this is being sold as something it is not," said House Speaker Craig Moody, who joined Steiner and Rep. JoAnne Milner, D-Salt Lake, in opposing the initiative. "What we're concerned about is this is being sold as a proposition that will put money into public education and be an economic boon to the state when in fact it will do neither."

Freston said anti-gambling forces are twisting the legislative analyst's figures on the state cost of the horse racing commission.

"Any way you read this, and it's very simply written, $300,000 comes into state coffers and $212,000 goes out. Where in this conversation does the word `subsidy' apply. Every fiscal analyst who has looked at this objectively has had to admit the state makes more money by having pari-mutuel," Freston said.

Even if Utah voters reject the pari-mutuel wagering initiative, the state will have a horse commission. The commission was established as a compromise bill after Gov. Norm Bangerter promised to veto pari-mutuel legislation and The Church of Jesus-Christ of Latter-day Saints issued a statement opposing all forms of gambling.

Lawmakers last year appropriated $200,000 to the new commission, but Gov. Norm Bangerter halved that appropriation, saying the commission and industry should be self-sufficient.

Horse racing enthusiasts said the governor's action left them no choice but to conduct a petition drive to put the pari-mutuel issue to a vote of Utah citizens. "I guess we wouldn't be standing here if maybe the governor hadn't vetoed it," Moody said.

Milner said she voted against funding the horse commission and Moody and Steiner said they voted for it during the legislative session.