Point Pleasant Tax Revolt

I recently received a heads up from the folks at George Mason regarding this blog post by Eileen Norcross. The problem and the story are pretty clear:

Residents in Point Pleasant Beach, New Jersey have resorted to a seldom-used method to protest their mayor’s proposal to raise taxes: they want him recalled from office. The recall petition containing 1,250 signatures was approved this week, giving Mayor Vincent Barella until July 22 to mount a challenge to the motion being placed on the ballot in November.

The movement to recall Mayor Barella began in the fall, after he asked the state government permission to levy local special options taxes on beach badges, paid parking lots, and alcohol — and more controversially, proposed parking fees on all neighborhood streets — to meet the $11.5 $1.5 million gap in the borough’s budget.

I caught wind of this story when I was travelling the other day. The article is a pretty good description of what can happen when a state and municipality maintain a dysfunctional financial relationship. It is well worth the read.

More interesting inherent in the discussion is the problem between cutting spending and raising taxes. No one wants to pay more taxes. That is why Barack Obama has been so effective at neutralizing this issue by saying that the "RICH GUY" will pay the bill. But folks are finding out that even when the rich guy pays the bill, he often just passes it along to you. For example, if the pizza parlor owner on the boardwalk is asked to pay more on his taxes, he and every other pizza parlor owner is going to raise the price of pizza a dollar or two. You can feel good that you "Socked it to the rich guy" but all he did was stick it right back at you. So whether the government collects it, or business passes it on, or the rich guy moves away, someone has to pay the bill.

In addition, Point Pleasant's situation is also comical on the spending side. When the proposal to cut back on the number of the city's police, residents balk. Well, again, you can't have it both ways. Cuts mean cuts. So you either cut the force or find another way to pay for it. Norcross made an excellent point here:

An excellent solution comes from Stanley Fischer, one of the petition’s authors. The beaches and boardwalks belong to the bars, amusement parks and pavilions. To deal with the summer partygoer crowd, let the boardwalk businesses hire additional police. Good idea, and it can be taken further. Point Pleasant need only look to neighboring Seaside Heights’ Business Improvement District. There are already about 80 Special Improvement Districts in the state.

Maybe Point Pleasant is a good example of individual citizens coming together and trying to come up with some good ideas to solve real (not imagined) problems. It's a shame the congress cannot seem to do the same.

We will follow this story as it develops. Hat tip to the Public Affairs team at George Mason!

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