Prior to entering the State Legislature, Palaia served in a variety of state and local elected offices. He was a member of the Ocean Township Council from 1967 to 1971 until he became mayor in 1971. During his tenure as mayor, the Seaview Square Mall was built and the oversaw the township's conversion of the Deal Test Site into a park which was renamed for him in 1998. Palaia served as Ocean Township's mayor until 1979. He then served on the Monmouth County Board of Chosen Freeholders from 1979 to 1981.