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Wu: Politics is getting in the way of business

July 28, 2012|By Jack Wu

Ever since I wrote about Bob McCaffrey's Stop the Dock Tax Political Action Committee, I have been pretty busy meeting with the different commercial docks owners ("Dock tax opponents form a strong PAC," July 8).

While McCaffrey's PAC deals primarily with the potential tax on residential docks, these commercial docks are under more imminent threat of getting taxed out of business, and only talked about taking the political route until now.

Enter the Coalition to Preserve Newport Harbor Political Action Committee, a PAC guided by a well-known and successful political consultant, representing the interests of the commercial marina owners.

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For some reason these business owners don't feel that a 20% tax on gross income is fair, with one owner saying, "I made 8% net profit, where in the world can I come up with 20% of gross [income] to pay a new tax?"

What is this new tax supposed to pay? Anything that relates to Newport Beach's harbor, bay and beach gets paid out of the city's tideland management budget, which gets its income from the different water-related fees.

The problem is that the city claims it has subsidized this budget by $15 million a year to cover its expenses.

The city has already increased the mooring fees by 300% and is now looking at the commercial marina owners and then possibly the residential dock owners to bridge the difference.

The Stop the Dock Tax PAC and the Coalition to Preserve Newport Harbor PAC claim that the tideland management budget isn't true. Both want forensic accounting done to get an accurate picture of what the expenses truly are.

Once the budget is true, the PACs say they would be willing to be properly taxed to meet those expenditures. Sounds simple, right?

But it's not when you consider that the Police and Fire departments receive money from both the tidelands management and general budgets. Whenever either department responds to a call at the beach, the money comes from the tidelands management budget.

But the funds aren't determined by call but are instead based on an estimate of the percentage of calls that are beach- or harbor-related. How accurate can that be?

The $200,000-a-year, full-time lifeguards are also charged to the tidelands budget, which means the dock owners are expected to pay for their wages and $100,000-a-year pensions when the entire city benefits from the millions of beach visitors.

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