SARATOGA SPRINGS — As the legislature and governor continue to ponder who will take over the state horse racing franchise — and the opportunity to operate three state-owned thoroughbred racetracks — the climate for horse racing and breeding in New York is better than ever. “I think the breeding industry is strong,” said Chris Dragone, executive director of New York Thoroughbred Breeders, a Saratoga-based trade organization.

Dragone, who took over the association last October and has an established background in breeding and racing, said that headlines regarding the franchise issue might have clouded the image of the industry.

The state still has the best breeding and development program in the country, he says.

Thoroughbred breeding is one of the fastest-growing sectors of agriculture in the state. In the last five years, there has been huge growth in the number of foals.

“That’s only going to get stronger,” Dragone said. “More and more people are creating horse breeding farms in the state than ever before.”

For that, thank Funny Cide, the Saratoga County-bred gelding that won the Kentucky Derby and the Preakness Stakes in 2003.

While the horse hasn’t single-handedly revitalized the industry, it certainly played a major role in promoting the opportunities for horse breeders in the Empire State.

“Funny Cide helped a great deal,” Dragone said in an interview in July, a week before the opening of the track in Saratoga. “He was a demonstration that you can breed a Derby winner in New York State. It showed that with New York breds you can reach the pinnacle of the sport.”

Funny Cide was bred at McMahon Thoroughbreds in the town of Saratoga, just outside Saratoga Springs. He is owned by a group of high school friends from Saratoga and Jefferson Counties. The horse was retired in July after winning the $100,000 Wadsworth Memorial Handicap at Finger Lakes Race Track. Dragone says that people have discovered that New York is friendly to the horse industry.

The friendliness comes in large part through the New York Thoroughbred Breeding and Development Fund.

The Fund is the regulatory body of the New York Breeding and Racing Program, which distributes approximately $50 million per year in the form of incentives, breeders’ awards, stallion awards, owners awards and purse money for New York-bred horses.

The Fund was established in 1973 and has helped shape the New York State Thoroughbred industry, making it the benchmark of Thoroughbred programs. Over the years, the quality of New York breds improved. And recently, successful national thoroughbred operations are setting up divisions in New York.

While success abounds, there are still challenges. Dragone and his association are working closely with New York Farm Bureau to make the breeding climate even better in New York.

As for as the franchise bid process, Dragone is neutral. But his group has corresponded with Gov. Spitzer to make clear that there should not be a reduction in racing days and that the Breeding and Development fund remains well funded and viable.

Other issues include securing bridge funding for the Thoroughbred Breeding and Development Fund. Currently, there is a potential revenue shortfall for the Fund as they continue to wait for VLT’s to be installed on-track to gain needed revenue, according to Jeff Williams, who heads up the equine lobbying effort for Farm Bureau.

“Our collective industry message is that breeding is not just about racing, it is about farming. In many areas across the state, the local economy depends upon farming, including thoroughbred breeding. This farm investment drives local businesses and contributes to open space and quality of life,” Williams said.