by
Catherine
Ivill
–
AMA/Getty
Images)
When
governments
host
global
events,
they
tend
to
make
the
same
promise:
the
world
will
come,
and
the
economics
will
work.
FIFA
World
Cup
26
is
testing
that
assumption
in
real
time.
In
New
Jersey,
a
dispute
is
unfolding
over
a
proposed
set
of
tax
increases
tied
to
the
matches
at
MetLife
Stadium.
The
plan
would
raise
the
sales
tax
in
the
Meadowlands
district
to
9.625%,
add
a
2.5%
hotel
surcharge,
and
impose
transportation-related
fees
during
a
five-week
window
surrounding
the
tournament.
State
officials
have
framed
this
as
a
targeted
tourism
measure
designed
to
offset
roughly
$300
million
in
security
and
logistical
costs.
Rep.
Josh
Gottheimer
has
pushed
back,
arguing
that
the
plan
does
not
meaningfully
distinguish
between
visitors
and
residents.
A
tax
that
applies
to
purchases
at
local
stores,
restaurants,
and
everyday
businesses
does
not
operate
as
a
tourism
fee
in
practice.
It
operates
as
a
location-based
tax,
and
the
people
most
likely
to
encounter
it
are
the
ones
who
live
and
work
there.
That
disagreement
may
sound
familiar.
It
shows
up
whenever
governments
try
to
fund
large
public
obligations
through
narrowly
framed
taxes.
But
this
situation
is
different
in
one
important
respect.
New
Jersey
is
not
simply
choosing
how
to
fund
an
event.
It
is
trying
to
recover
costs
within
a
structure
that
limits
its
ability
to
tax
the
event
itself.
To
secure
World
Cup
matches,
host
jurisdictions
typically
agree
to
a
set
of
conditions
that
protect
FIFA’s
commercial
interests.
Those
conditions
often
include
restrictions
or
exemptions
tied
to
ticketing,
sponsorships,
and
other
core
revenue
streams.
The
logic
is
straightforward.
If
you
want
the
event,
you
accept
the
terms.
What
follows
is
less
straightforward.
Once
the
costs
of
hosting
become
clear,
governments
look
for
ways
to
close
the
gap.
Direct
taxation
of
the
event
is
constrained,
so
the
solution
shifts
outward.
Taxes
are
applied
to
the
surrounding
geography,
to
adjacent
industries,
to
the
broader
ecosystem
that
forms
around
the
event.
They
are
labeled
as
tourism
measures,
but
their
reach
is
wider.
That
is
what
makes
the
Meadowlands
proposal
worth
paying
attention
to
beyond
New
Jersey.
It
reflects
a
structural
tension
that
is
becoming
harder
to
ignore.
Governments
are
asked
to
commit
public
resources
upfront,
often
with
limited
control
over
the
most
lucrative
parts
of
the
event,
and
then
must
justify
how
they
recoup
those
costs
afterward.
The
current
dispute
also
highlights
a
second
layer
of
complexity:
the
allocation
of
costs
across
jurisdictions.
The
World
Cup
matches
will
be
played
in
New
Jersey,
but
they
are
being
marketed
globally
as
part
of
the
New
York
metropolitan
region.
New
York
City
stands
to
benefit
from
the
influx
of
visitors,
branding,
and
economic
activity.
New
Jersey
bears
the
direct
burden
of
hosting.
At
the
same
time,
public
officials
are
pressing
FIFA
to
absorb
a
greater
share
of
specific
expenses,
including
tens
of
millions
of
dollars
in
transportation
costs
tied
to
moving
fans
to
and
from
the
stadium.
Reports
of
sharply
increased
train
fares
have
only
intensified
that
pressure.
The
optics
are
difficult
to
ignore.
On
one
hand,
governments
are
being
told
that
the
event
will
generate
extraordinary
private
revenue.
On
the
other,
they
are
being
asked
to
underwrite
the
infrastructure
required
to
make
it
possible.
Taken
together,
these
dynamics
raise
a
broader
question
about
how
mega-events
are
financed
in
the
United
States.
If
a
tax
is
described
as
targeting
visitors
but
predictably
falls
on
residents,
is
it
still
a
tourism
tax?
If
public
entities
are
constrained
from
taxing
the
core
revenue
streams
of
a
private
organization,
what
does
that
mean
for
the
balance
of
risk
and
reward?
And
if
multiple
jurisdictions
benefit
from
an
event,
how
should
the
costs
be
distributed
among
them?
These
are
not
abstract
concerns.
They
go
directly
to
how
governments
structure
deals
with
global
organizations
and
how
those
deals
are
explained
to
the
public.
There
is
still
time
for
New
Jersey
to
refine
its
approach,
just
as
there
is
time
for
FIFA
and
regional
stakeholders
to
revisit
how
costs
are
shared.
But
the
underlying
issue
will
remain.
The
challenge
is
not
simply
funding
the
World
Cup.
It
is
designing
a
system
in
which
the
financial
responsibilities
are
aligned
with
the
economic
benefits.
For
now,
the
debate
in
the
Meadowlands
offers
a
clear
window
into
what
happens
when
that
alignment
is
missing.
Michael
J.
Epstein,
a
Harvard
Law
School
graduate,
is
a
trial
lawyer
and
managing
partner
of The
Epstein
Law
Firm,
P.A., a
law
firm
based
in
New
Jersey.