Florida Equine Industry Jobs Surpass 113,000 $6.8 Billion in impact

Posted on: May 07, 2018

The latest American Horse Council study pinpoints the Florida equine industry’s large-scale economic impact and industry officials are taking note. The $6.8 billion annual equine economic impact in Florida is up by 33% since the last study over a decade ago. The racing sector’s impact is up 47%.

“That’s significant,” said Lonny Powell, CEO of the Florida Thoroughbred Breeders’ and Owner’s Association. “Florida truly is a horse state. To many, the beach, sun, sand, and oranges are synonymous with Florida, but our state has been steadily adding equines to that list to hang our state’s collective hat on for some time. Equines are becoming a strong part of Florida’s brand.”

“A thriving thoroughbred industry is vital to the state’s economy and to providing world class entertainment to spectators from around the globe,” said P.J. Campo, Vice President of Racing for The Stronach Group. Campo added, “It’s significant that racetrack operators in the state generate $307 million in revenue and create over 1,200 jobs with purses in excess of $105 million. Our Miami-area operation, Gulfstream Park, is one of the gems in the racing world and its right here in Florida.”Campo is referring to the world-class racing experience for both competitors and spectators and one of the world’s richest days of horse racing with the Pegasus World Cup.

“Florida has a robust equine industry with more than $6.8 billion total value added to the state’s economy,” said Florida Commissioner of Agriculture Adam Putnam. “As the third largest state in terms of equine population in the United States, Florida’s horse industry is vital to the state’s
economy. The export of purebred horses from the state is one of our fastest growing sectors and
shows the prominence of Florida’s horses worldwide.”

The numbers also reveal jobs are up by 8% from the last study conducted 13 years ago. Florida has been a proponent of state job growth, especially in recent years, and the employment numbers are important for an overall robust state environment. The labor-intensive industry provides jobs ranging from directly working with horses – including grooms, trainers and equine health practitioners – to a significant number of jobs that exist in the restaurant, hotel and hospitality sector thanks to racetracks and equine venues.

Thoroughbred horse sales, specifically the Ocala Breeders’ Sales, contribute strongly to the hospitality sector as buyers from as many as 49 states and 38 countries flock to the two-year-olds in training sales each spring. Horse sales in the state generated $156 million in revenue in 2016. Tom Ventura, president of Ocala Breeders’ Sales said, “Since 2010, OBS has sold over 22,000 horses for more than $1 billion dollars to buyers from every state except Alaska and 38 different countries. OBS has become the destination to buy quality two year olds, accounting for nearly 70% of juvenile sales in North America.”

In addition to the sales, Ocala, Marion county, is recognized worldwide as the hub of thoroughbred breeding and training carrying the moniker, “Horse Capital of the World™” due to the number of horses of all breeds and world class equine events that are based there. About 15,000 thoroughbreds annually receive early training in the state away from harsh winters and frozen ground. The area is strongly supported by a concentration of equine services, such as leading veterinarians, researchers, feed and tack retailers, equine dentists, and major horse transportation companies.

“Anecdotally, we’ve known locally for a long time the significant impact of equines to our county economy. Our 2015 study commissioned by the CEP provided those hard numbers – a substantive $2.6 billion economic impact to the county. Having a national study that drills down to the state level just solidifies the growth we’ve been seeing in recent years ourselves,” said Kevin T. Sheilley, president and CEO of the Ocala/Marion County Chamber and Economic Partnership.

The latest study reports Florida is home to 387,078 horses with one in four being thoroughbreds in racing, competition and recreation. Thoroughbreds make up the largest segment of the horse population in Florida. Florida nationally is third in horse population behind Texas which is over four times larger geographically and California which over two times larger.

“With over 113,000 jobs and a robust $6.8 billion in total impact, equines continue to have anotably greater economic impact than our signature spring baseball training. The study clearly supports the train of thought that the Florida thoroughbred business, along with our entire equine industry, are not only worth preserving but supporting and growing as well. Florida is most fortunate to have such an industry and agri-business already well established within its borders just as we Floridians are fortunate to live and work here,” Powell said.

With the fourth largest growth rate in the nation, land is at a premium in Florida. Agricultural operations like equine production preserve a significant amount of land. The latest report notes land owned or rented for horse-related purposes has increased to 717,000 acres. The preserved land, mostly in Central Florida, provides rural opportunities for city-bound Floridians and opportunities for diversity of tourism in the state. The report covers figures as of 2016.

Last year, two Florida-breds, Caledonia Road and World Approval won Eclipse awards, the nation’s highest honor for thoroughbreds. They join the list of 52 national champions including six Florida-bred Kentucky Derby winners. Florida has had more winners of Kentucky Derbies outside of Kentucky than any other state. Champions include 28 Breeders’ Cup winners.

“It’s clear to see why the road to the Kentucky Derby begins here in Ocala, Horse Capital of the World™,” said City of Ocala Mayor Kent Guinn, “ It is a major epi-center of the horse world and is part of our daily life here integrated into our hometown history, arts and culture. It’s not surprising the state numbers would reflect what we’ve known in Marion County for a long time, that the industry makes a significant impact.”

“The equine industry is a key driver of the local economy in Marion County,” said Kathy Bryant, Chairman of the Marion County Commission. “Ever since Needles’ triumph in the 1956 Kentucky Derby, we’ve proudly been the home to countless thoroughbreds who attract jobs and excitement to our community.”

Incentive programs offered in the state are a key to the industry and have grown in recent years.

“Florida consistently ranks in the top two to three in foal crop annually. Incentives in the state from breeders’ and owners’ awards, to bonus money for races of all types give Florida-breds robust opportunities to earn more for their owners who have invested in them. The Florida Sire Stakes series promotes stallions standing in the state and gives FSS eligible Florida-breds going into the sales arena opportunities for their buyers to race in the prestigious series,” said Powell. Stephen W. Screnci, president of Florida Horsemen’s Benevolent and Protective Association, Inc., “It is very rewarding to see strong Florida numbers and with new incentive additions to racing meets, the economic impact should continue to further enhance our already strong all-year
program here in Florida.”

“We are continually seeking to enhance the state’s breeding and racing programs by providing incentives for horsemen to race Florida-breds at Tampa Bay Downs,” said the track’s Vice
President and General Manager Peter Berube. “We also recognize the importance of Florida’s thoroughbreds and to attracting new investors in the state.”

Bob Jeffries, president of the Tampa Bay Downs HBPA, offered his enthusiasm for the study noting the cooperation of industry members to continue the growth of the industry.

“We have the largest stakes program in Tampa Bay Downs history currently. When the track, the horsemen and the Florida breeders work together as a team, good things happen for everyone. And good things are happening,” Jeffries said.

Powell added, “Our job at FTBOA is to promote, advocate for and enhance the economics of our state-wide industry at home as well as outside our state and national borders. This fresh American Horse Council study clearly demonstrates the importance of our mandate on behalf of the entire state industry. Our breeders, farms, tracks, owners, conditioners and equine professionals are top-shelf, which, along with our weather and quality of life, make Florida the greatest place to breed, sell, own and race.”

The industry is supported by Florida’s Department of Agriculture and Consumer Services which creates a favorable business climate including no tax on stallion seasons, exemptions for horses purchased from original breeders and a breeding stock exemption. Feed and animal health items are exempt along with certain farm equipment. Property tax breaks are also provided to Florida’s horse farms.

New to the study was the addition of analysis of the impact and scale of equine retirement, sanctuaries, and therapy programs. These programs among other re-training programs give thoroughbreds that are no longer racehorses opportunities for second careers in horse sport competitions and recreation. These programs added multi-millions in impact, slightly over $114 million, compared to the billions in the racing sector, but their importance cannot be unscored enough in showcasing the versatility of horses in second careers.

Timely Estate Planning Technique for Ocala Farm and Equine Owners May 8, 2018

Considering the potential Coastal Connector Alternative Corridor Evaluation(ACE) Proposals, could have a negative impact for Marion County property and business owners, you may be thinking about selling all or a partial sale of your property prior to  government property interruption (Eminent Domain). Property values including residences may depreciate as I experienced this in New Jersey.  You may find it worthwhile to have a discussion with a competent CFP professional and tax advisor as to some estate planning options.

If you have pent-up taxable capital gains you may want to explore  some Charitable Planning strategies that can benefit you as well as your chosen Charities to minimize capital gains taxes and create a memorable legacy.

This is a strategy that helps to minimize capital gains taxation and can benefit your community or passion in making a Charitable bequests as soon as implemented. The Gates foundation and others do this frequently to help charitable organizations and provide tax relief as well. I welcome your call should you like to have a discussion as to some resourceful Estate planning and tax strategies. You can  view http://www.flretire.com as to my blogs for further information and or seek Fidelity Charitable.org and SEI Charitable Relationships for further information. I am affiliated with both entities.

Tom Cooper CFP, CPPT

What is the “Jobs” Act?

Typically, when a company raises capital, it has to register its securities (basically the shares/interests that they are offering for sale).  Registration is expensive and takes a long time.  Most companies look for an exemption from registration. The most common exemption used by companies for this purpose is the private placement exemption, which basically meant the companies couldn’t publicly solicit or advertise.

The “Jumpstart Our Business Startups Act”, or the “JOBS Act” changed that.  The JOBS Act allows companies to publicly solicit for funds and advertise while still conducting a private offering.  However, it comes with a major catch.  The only investors allowed to invest must be “accredited investors”, and the company raising money has to verify that their investors are truly accredited investors.

A simple questionnaire is no longer sufficient – instead, companies must take further “reasonable steps” to prove their investors are accredited investors.  Failure to comply is a violation of federal laws and may subject the company to enforcement action and the obligation to return money raised.  That’s obviously bad for companies, but it’s also bad for investors who don’t know if the companies they invested in will suddenly have to return a portion of its capital to other disgruntled investors.

What is an “Accredited Investor”?

An “accredited investor” is a type of investor. Generally, sales of securities must be registered with the SEC unless an exemption is found. Some of the exemptions require sales to be made to accredited investors. Our application lists out the various categories of accredited investor.

The Securities and Exchange Commission also has a helpful page on accredited investors here: https://www.investor.gov/additional-resources/news-alerts/alerts-bulletins/investor-bulletin-accredited-investors

For more information, please contact Paul McIntyre at pmcintyre@namcoa.com

Supporting Therapeutic riding for challenged Children and Veterans

Stirrups and Strides Charitable Event at Jumbolair of Ocala. December 2, 2017

Kevin Zylstra, CFP, friend and avid sailor of our Naples office joins Tom at “Jammin at Jumbolair” Charitable Extravanza.

Stirrups ‘n Strides is a 501 (c)3 non-profit organization Therapeutic Riding Center for challenged children and veterans.  Over 400 people attended this event celebrated a successful year of reaching out to those in need.

For further information you may contact Betty Gray at 352-427 3569 to learn more and consider what may be  on your heart today!

 

 

What is a SMA?

Also known as a SMA (“Separately Managed Account”), is a single investment account comprised of individual stocks, bonds, cash or other securities, tailored to achieve specific investment objectives.

Your portfolio manager oversees the investments according to your specific investment objectives and in an investment style with which you are comfortable.  Put simply, a SMA is for demanding investors who:
  • Seek the comfort of professional investment guidance and a heightened level of personal service
  • Still want to take an active role in their financial life
  • Desire the flexibility to invest in different strategies or styles, while seeking the liquidity and potential tax benefits that come from owning individual securities in separate accounts, versus mutual funds
  • May want a single fee to cover ALL account costs, including trading costs and performance reporting.
  • Low-cost, transparency and 24/7 online access

For those with more than $100,000 a SMA may be the smart way to manage portfolio assets, due to lower costs, greater tax efficiency and transparency.

Why the growth in Cash Balance Plans?

The Pension Protection Act of 2006 (PPA) is long and hard to read, but it played a crucial role in establishing cash balance plans as a viable and legally recognized retirement savings option. Before 2006, cash balance plans faced frequent legal challenges. Those bringing the suits argued that cash balance plans violated established rules for benefit accrual and discriminated against older workers. The rulings on these cases were inconsistent, and many business owners were reluctant to risk establishing a plan that just didn’t have firm legal footing.

The Pension Protection Act ended this uncertainty about the legality of cash balance plans. The legislation set specific requirements for cash balance plans, including:

  • A vesting requirement: Any employee who has worked for their company for at least three years must be 100% vested in their accrued benefits from employer contributions.
  • A change in the calculation of lump sum payments: Participants in a cash balance plan can usually choose to receive a lump sum upon retirement or upon the termination of employment instead of receiving their money as a lifetime annuity. Before 2006, some plans used one interest rate to calculate out the anticipated account balance upon retirement, but, when participants opted to receive an earlier lump sum, the plan called for using a different interest rate to discount the anticipated retirement balance back to the date of the lump sum payment. This could lead to discrepancies between the hypothetical balance of the account (as determined by employer contributions and accumulated interest credits) and the actual lump sum payout, an effect known as “whipsaw”. The PPA eliminated the whipsaw effect by allowing the lump sum payout to simply equal the hypothetical account balance.
  • Clarification on age discrimination claims: A cash balance plan does not violate age discrimination legislation if the account balance of an older employee is compared with that of a similarly situated younger employee (i.e. with the same length of employment, pay, job title, date of hire, and work history), and the older employee’s balance is equal to or greater than the younger employee’s.

There are, of course, many other points included in this lengthy piece of legislation, but the takeaway is this: the Pension Protection Act of 2006 removed the legal uncertainty surrounding cash balance plans and made them a much more appealing option for small business owners. The number of cash balance plans in America more than tripled after the implementation of the PPA. Additional regulations in 2010 and 2014 made these hybrid plans an even better option, and we anticipate that their popularity will continue to grow. There are thousands of high-earning business owners out there who can reap huge, tax-crushing benefits from implementing cash balance plan – they just have to know about them first.