LOUISVILLE, Ky. (AP) — Turns out the world's self-proclaimed horse capital can put its money where its mouth is.
The horse industry pumped almost $3 billion into the state's economy last year, according to the Kentucky Equine Survey, the first comprehensive snapshot of Kentucky's horse industry since 1977 and the first-ever detailed economic impact study of the equine sector.
The study was released Friday by the University of Kentucky's College of Agriculture, Food and Environment and the Kentucky Horse Council in Lexington.
The nearly $3 billion included money spent on feed, fencing and veterinarian and farrier services, said Jill Stowe, a UK associate professor of agricultural economics who led the 2012 survey.
It also took into account money generated by businesses that supply veterinarian clinics and others providing services to horse owners. The amount did not include horse-related tourism spending, the survey's authors said.
Kentucky's racing sector claimed the biggest economic impact, at nearly $1.3 billion, followed by the breeding sector at $710 million, the survey found. Kentucky's race tracks include Churchill Downs, home of the Kentucky Derby, and Keeneland.
The survey found that the equine industry generated an estimated 40,665 jobs last year, and its tax contribution to Kentucky was about $134 million.
It said the equine industry contributes "an above average share" of sales taxes compared to the rest of the state's farm industry. Horse farmers pay state sales taxes on their farm purchases, unlike other livestock producers, who are exempt, the report said.
Imposing the sales tax on those purchases adds an estimated $8 million to $12 million paid by horse farmers each year, said Kentucky Senate Majority Floor Leader Damon Thayer. Thayer, a key horse industry supporter, said he would push to exempt horse farmers from paying the sales tax on feed, fencing and farm equipment if state lawmakers take up a measure to overhaul Kentucky's tax code.
"If the General Assembly ever considers tax reform, I believe that equine tax equity needs to be a part of the puzzle," the Georgetown Republican said.
Thayer said the horse industry can use the economic impact study to make its case with state policymakers.
"It really sheds light on one of Kentucky's signature industries, not only from a brand point of view but from an economic point of view," he said.
Besides gauging the horse industry's economic clout, the survey also inventoried the state's horse population. Results released early this year showed Kentucky was home to 242,400 horses. The state has about 35,000 equine operations, and the total value of horses and horse-related assets is estimated at $23.4 billion.