Pennsylvania Gov. Tom Wolf on Tuesday unveiled a state budget that would divert $200 million in casino subsidies currently flowing to the state’s horse racing industry to fund a new college scholarship program. The creation of the $200 million scholarship program would result in an 80 percent cut to the subsidies that the state’s racetracks, horsemen, and breeders receive as a share of proceeds from slot machines at the state’s casinos, many of which are operated in tandem with racetracks. The subsidies are distributed by the state’s Race Horse Development Fund, which was created when casinos at licensed racetracks were legalized in 2004. It was converted into a trust by the legislature in 2017 as part of a gambling expansion bill. Subsidies received by the racing industry from casino operations have periodically been targeted by politicians and legislatures across the U.S., as has been the case in Pennsylvania in the past. The subsidies flowing to Pennsylvania’s racing industry, which include both Thoroughbred and harness tracks, have long been considered ripe for diversion, considering that they constitute approximately 90 percent of the purse money distributed by the tracks. Wolf, a Democrat, said that the diversion of the funds would create a scholarship program allowing 25,000 children to go to state colleges. “Let’s bet on our kids instead of bankrolling racehorse owners and ensure the viability of the Pennsylvania State System of Higher Education,” Wolf said in an address to both chambers of the legislature on Tuesday. The House and Senate are both controlled by Republicans. Pete Peterson, the executive director of the Pennsylvania Equine Coalition, a lobbying group that represents constituents in the racing and breeding industries, said that approval of the budget appropriation would “destroy an industry that provides a $1.6 billion economic impact” in the state. “If approved by the legislature, this raid would result in the end of horse racing in Pennsylvania by eviscerating the primary funding source for the purses and breeder incentives that serve as the lifeblood of the industry,” Peterson said. Peterson also said that the diversion of the funds would be illegal considering the language contained in the 2017 gambling bill that converted the development fund into a trust. The Pennsylvania Equine Coalition issued a statement on Tuesday objecting to the budget proposal, quoting a number of individuals in both the  Thoroughbred and harness industries as saying that the diversion of the funds would lead to devastation. “If this passes I will be putting a for-sale sign on my house right away,” said John Servis, who trained Smarty Jones, the Pennsylvania-bred who won the Kentucky Derby and Preakness Stakes in 2004. The budget proposed by Wolf would go into effect on July 1, the start of the fiscal year in Pennsylvania. The legislature will have until June 30 to pass a final budget. Pennsylvania has three Thoroughbred racetracks -- Parx outside Philadelphia, Penn National in Grantville, and Presque Isle in Erie – and three harness tracks. All operate casinos.