NYRA RUNNING ON RIGHT TRACK.(MAIN)

Byline: EDWARD FITZPATRICK and JOHN CAHER Staff writers

Saratoga Springs Thoroughbred racing and radio shock jock Howard Stern?

Just five years ago, the idea of New York Racing Association advertisements on Stern's irreverent show would have been unthinkable to the old-school members of the NYRA's board of trustees.

``We wouldn't have been allowed to do it,'' said Ed Lewi, whose marketing firm recommended the Stern spots this year as a way to reach the 25-to-49 age group.

In fact, New York has not been known for innovation in its racing industry. It clings to one of the few nonprofit, state-controlled agencies conducting racing year-round, even as most other states have given that role to private companies. But despite growing criticism, lawmakers this month voted to hang on to NYRA, turning down a chance to privatize the racetracks by opening the franchise to other bids. Gov. George Pataki signed the NYRA extension into law Saturday.

The state's vote of confidence comes as NYRA -- set up in 1955 to provide ``reasonable revenue for the support of government'' -- is starting to act less like a government agency and more like a private corporation. It is cutting staff, …