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Schundler preaches new spirit of government
Originally appeared in the Trenton Times on 10/30/01 Second of two parts
Hail him or hate him, if Bret Schundler wins next week's gubernatorial election, the state budget will be radically altered.
Railing against state government has been a central theme of the impassioned Republican nominee's campaign, despite his party wielding control for a decade.
And Schundler has laid out a brash agenda of school reforms and tax cuts while espousing a governing philosophy he contends will dilute the influence of special interests and empower families and local government.
Critics don't doubt his sincerity, but warn of potential side effects of the former Wall Street bond trader's fiscal prescription. His Democratic opponent, Woodbridge Mayor Jim McGreevey, charges Schundler is making promises he can't keep.
Schundler pays little heed to naysayers predicting a $500 million budget deficit as a result of an anemic economy. He expounds the notion that tax cuts are good economic, political and morale therapy in all circumstances.
"Tough times are the best time to cut taxes. It helps the economy bounce back faster, adds some real oomph to the recovery and generates more (state) revenues," he said.
With missionary zeal, Schundler contends the approach that won him national acclaim during his nine years as Jersey City's mayor will work wonders for New Jersey. With an assist from the bull run on stocks and the thriving New York City real estate market, Schundler overcame the $40 million budget gap he inherited and presided over the revival of a city wracked by urban blight and notorious for corruption.
"We cut the budget while improving the services," said Schundler, who left office in July. "There were more cops on the street. We had 20 percent fewer employees than when I started, but we still added after-school and senior programs and started picking up the litter."
Schundler said that was accomplished by reorganizing city operations -- for example, transferring cops from clerical tasks to street patrol. He cites the police unions suing him over that move as a badge of courage.
"I'm not the candidate of different government interest groups," he said. "I expect to make government work a lot better for people and be more efficient."
Schundler insists he won't cut services, promising "to do more for people while taking less money out of their pockets."
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Casting himself as apostle of Ronald Reagan, Schundler's agenda includes tax incentives to boost private and parochial school enrollment; additional tax cuts for seniors, veterans and businesses; dramatically more state aid to towns and cities; and scrapping tolls on the Garden State Parkway.
The package will cost billions -- $3.4 billion over four years by his own estimate. Schundler predicts the now-assumed recession will be brief and mild and he projects state revenues to increase by $5.5 billion during that time.
"That's one hell of a hope to pin the state budget on," said economist Henry Coleman, director of the Center for Government Services at Rutgers University. "For the state to experience that type of revenue growth would require an unprecedented economic turnaround. The recession would have to end early next year and we'd have to immediately start having the type of (economic) growth we had in late 1990s. That sort of thing has never happened before."
Coleman said taxes on nonwage income -- profits from investments and bonuses -- largely were responsible for the soaring state revenues of the last few years. He said an economic recovery normally must be sustained for some time before there are great increases in capital gains income and profit sharing bonuses.
Despite his bluster -- "The state government has so much waste, it's ridiculous," Schundler says -- he has shied away from detailing his cost-cutting program, saying he didn't recognize all the opportunities for streamlining Jersey City's operations until he became mayor.
But several state budget experts, including former state Treasurer Roland Machold, have noted political history is littered with candidates who failed to deliver on their "glib" promises to eliminate waste, fraud and abuse.
Machold said making state operations more efficient would require a sizable investment to replace the obsolete technology many state offices now use.
Schundler concedes politicians repeatedly have broken faith with voters by failing to make government more efficient.
Galling leaders of his own party, he points to the 50 percent increase in state spending and the tripling of the state debt that has occurred since the GOP seized control of the State House 10 years ago.
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Schundler's campaign has been a mix of sermons on fiscal piety spliced with full-contact political attacks aimed at painting McGreevey as a tax-and-spend liberal of former Gov. Jim Florio's ilk. As a freshman assemblyman in 1990, McGreevey voted for Florio's detested $2.8 billion tax increase that later led to the GOP takeover of Trenton.
McGreevey counters by charging Schundler's plans are unrealistic, especially given the economic turmoil.
"He's talking about spending a lot of money, but comes up empty when it comes to paying for them," said McGreevey spokesman Richard McGrath. "He's made a lot of dramatic proposals, but when you pull back the curtain there is no substance."
McGreevey has offered a cautious plan that liberally borrows from mainstream Republican ideas, ideas that Schundler derides as "incremental tinkering."
McGreevey wants to extend the existing property tax freeze for low-income senior citizens, give a tax break for at-home health-care providers and funnel up to $300 million toward local property tax relief. He also wants to eliminate NJ Saver property tax rebate checks for residents who earn $200,000 or more and use the savings to cut state debt.
McGreevey says his plan will cost $388 million a year. Schundler puts the cost closer to $2 billion and insists McGreevey will raise taxes to cover the cost. Despite a month of in-your-face badgering from Schundler, McGreevey resisted making a no-tax pledge, repeatedly saying such promises were "irresponsible." During a face-to-face debate last Thursday, he suddenly reversed course and pledged not to raise taxes.
McGrath conceded McGreevey's statement was in response to Schundler's harping on the tax issue, but he insisted McGreevey hasn't changed his position and doesn't expect raising taxes will be necessary in the foreseeable future. Of course, Florio gave similar assurances during the 1989 governor's race.
As mayor, Schundler did a better job of holding down taxes and borrowing than McGreevey.
According to the state Department of Community Affairs, municipal property taxes increased by 9 percent in Jersey City during Schundler's tenure and by 39 percent in Woodbridge while McGreevey has been mayor. Jersey City's municipal debt grew by 14 percent under Schundler while Woodbridge's borrowing has increased by 30 percent during McGreevey's tenure.
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Long a crusader for school vouchers, Schundler has made offering tax credits to individuals and corporations that donate to private school scholarship funds the fulcrum of his platform.
He says the credits will cost the treasury $585 million when combined with smaller tax credits for educational expenses. That's the basis for McGreevey's oft-repeated charge that Schundler will cripple public education.
Schundler contends the plan will save the state $480 million, which is the financial underpinning of his promise to cut taxes while increasing services. His math is a bit fuzzy.
He predicts 83,000 students would take the scholarships and opt out of public schools Based on New Jersey's total cost of $12,726 per student, he calculates the program will cut public school costs by $1.06 billion.
Few independent experts consider those numbers realistic. Experience in other states suggests far fewer than 83,000 students would take advantage of the program.
When a student transfers, the district saves much less than $12,726. That is because small reductions in enrollment, spread throughout a district, do not necessarily translate into fewer teachers or reductions in fixed costs like building maintenance.
An analysis by the nonpartisan Office of Legislative Services exposes the plan to further criticism. OLS projected only 18,000 students would participate in the program and would cost the state $199 million a year.
Schundler said the OLS analysis is flawed because it underestimates the number participating and participation would be concentrated in urban areas to allow wholesale cost cutting.
As he does with other budget proposals, Schundler stresses the ethical and spiritual dimensions of his scholarship proposal.
He said the state has long neglected its obligation to improve the performance of failing public school districts. Like other champions of school choice, he argues competition will empower parents to make better educational choices for their children and encourage more parental involvement. The competition for students, meanwhile, will give public schools an incentive to improve, he says.
Likewise, Schundler promotes eliminating tolls on the Garden State Parkway as "a toll tax cut" that will restore the public's faith in politics and its spiritual condition.
"If you get rid of the tolls, that's less time stuck in traffic," he said "We'll have less road rage, more families will be able to eat dinner together. It's almost spiritual."
Critics say getting rid of the tolls would force all taxpayers to pick up the tab for Parkway operations -- that's $135 million to $200 million annually, depending on whose figures you use -- and pay off its $650 million debt.
Despite the weakening economy and the state's budget woes, Schundler remains committed to ending toll collection by next October.
"People saying it can't be done only strengthens my resolve," he said. "This, in the overall scheme of things, is a small item. Getting rid of the tolls will be proof that I'm a man of my word, that people can trust public officials. It will increase my political capital and help restore the people's faith in politics."
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