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That a political outsider could unite inner-city voters against high property taxes and municipal corruption seemed unlikely until...
This Mayor Beat The System

Originally appeared in the Reader's Digest of November, 1993

By Dale Van Atta

At the turn of the century, Jersey City, N.J., a stone's throw from the Statue of Liberty, was a major rail and manufacturing center. Many of the nation's immigrants boarded trains in the sprawling Jersey City terminal on the way to their American dream.

But over the years, the well-kept, bustling town fell prey to crime, municipal corruption and high taxes. Some of the city's largest private employers, like American Can, pulled out. As a result, unemployment hit double-digits and welfare rolls ballooned.

The state took over Jersey City's entire school system after a length investigation uncovered massive cronyism, graft, and incomptetence - "a total educational failure."

Property taxes spiraled ever higher. Last year, the National Association of Home Builders ranked Jersey City the 17th least-affordable metropolitan housing market in the nation.

Yet earlier this year the 229,000 residents of this gritty, blue-collar town helped stage an extraordinary urban revolution, one that sets a powerful example for cities all across America. Their unlikely leader is a 34-year-old Ivy Leaguer named Bret Schundler. He was too young, had the wrong background and belonged to the wrong party, yet he succeeded by doing two things traditional politicians had disdained: listening to the voters and keeping his word.

"Rice Puddin' Time."
Bret Schundler was born in Morristown, N.J., the youngest of nine children in a comfortable middle-class family. An all-state football player with high SAT scores, he was recruited by Harvard, where he washed dishes, cleaned bathrooms and worked as a security guard to pay his tuition.

Schundler intended to become a Presbyterian minister. But after college he spent two years in Washington, D.C., working for Rep. Roy Dyson (D.,Md.). Then, in 1984, Schundler joined the Presidential campaign of Gary Hart. When Hart lost the nomination, Schundler got a job with a Wall Street investment banking firm. He didn't know the difference between a stock and a bond. "But the man who interviewed me figured if I could sell Gary Hart in western Iowa, I could sell quality bonds," Schundler says.

In fact, Schundler had a spectacular career, investing billions of dollars for hospitals, schools and other institutions. He became a millionaire. Schundler had moved into a modest brownstone in downtown Jersey City with his wife, Lynn, mainly because it was an easy commute to Wall Street. He had gotten active in civic associations, but was becoming disillusioned with the Democratic Party. He felt that Presidential candidates Walter Mondale and Michael Dukakis were captives of special interests. Locally he was disenchanted by Jersey City's high tax rates, exploding budgets and rampant corruption.

Schundler "retired" from Wall Street and registered as a Republican - not exactly an opportunistic move in a city where Democrats outnumber Republicans by almost ten to one. He ran for state senate and lost, though he received a surprising 45 percent of the vote. In 1992, defying the odds, he entered a special election for mayor.

The election had come about in a way that was all too familiar in Jersey City - a longtime symbol of machine politics in America. The tradition dated to 1917, when the city got a street-smart former city-hall custodian as mayor. For three decades, Frank "I am the law" Hague presided over an era of legendary corruption.

Hague boasted a special desk with a drawer that opened in the front, allowing visitors to make deposits that disappeared inside. On an annual salary of no more than $8,000, he amassed a fortune reputed to be at least $10 million. Once a year, at what one participant called "Rice Puddin' Time," city employees had to ante up three percent of their annual salary for the "Boss."

Hague handpicked New Jersey's governors and judges, using the huge Democratic majority he delivered from Hudson County. When it was necessary, it was said he even got votes from the graveyard.

No Bloodbath.
After Hague, mayors came and mayors went - sometimes to jail - but corruption and taxes continued to grow.

By 1992, Jersey City property taxes were among the nation's highest. A $100,000 house, taxed at $871 next door in New York City, cost a Jersey City homeowner $3157. And yet last year, with the city facing a $40-million budget deficit, the city-council president declared there was only one solution: hike taxes yet again.

Budgets were not the only problem. In less than 12 months, the city went through four mayors. First, Gerald McCann was sentenced to federal prison for fraud and tax evasion. The city-council president served by default until July, when the council's new president took over. Then a special election was scheduled for November to elect a mayor to serve out the last seven months of McCann's term.

Schundler entered the race as a conservative Republican, emphasizing low taxes, safer streets and an end to machine politics. The election was chaotic, with 19 candidates vying. Schundler won with less than 18 percent of the vote.

When he was sworn in last November, Schundler knew he would be under a microscope as the city's first Republican mayor in 75 years. He knew, too, that he faced re-election in May, this time against a united Democratic Party. He had only months to make his mark.

The stage was set on his first day in office. A lawyer and a real-estate developer showed up, promising to bring Jersey City a huge discount retail outlet - if they could get a reduction in property taxes.

Schundler politely turned them down. "If I give big outfits a break and let the little guys pay for it, I chase off more jobs than I attract." The developer didn't get a special rate, but began the project anyway.

Next, Schundler took on political graft. "No-bid contracts, no-show jobs and gross fiscal mismanagement have brought our city to the brink of financial ruin," he had said in his campaign. Schundler set an example by cutting his own salary in half. He also did something that astonished Democratic city clerk Robert Byrne. "For decades," says Byrne, "inauguration day was a bloodbath. The new mayor would fire the old one's supporters and hire his own. Mayor Schundler didn't do that."

The mayor scrutinized government spending too. Commissioners of the Jersey City Incinerator Authority, which handles garbage collection, street sweeping and snow plowing, had charged taxpayers $82,773 over four years for travel to cities like San Francisco and Orlando, Fla. "If they are going to send me on a trip, I'm not going to no fleabag hotel," on former commissioner said. Schundler got the commissioners to curb their free-spending ways.

"It's Our Money."
When Schundler learned that Jersey City Sewerage Authority had raised rates 119 percent, he smelled a rat. Schundler suspected the budget was bloated, and met with the commissioners privately to insist on a rollback. They declined.

As the months passed, Schundler discovered that the Authority had developed a $14-million surplus. The next time the commissioners were set to meet, Schundler went public with a newspaper ad, urging citizens to come and tell the board "that we the people of Jersey City will not tolerate abusive rate gouging."

The overflow crowd that showed up cheered Schundler as he challenged the board. "My findings are simple," he began. "Your budget can be trimmed, yet you're building this huge reserve. It's our money, and we prefer to have it."

The board later voted to roll back rates 26 percent.

Schundler also moved on crime. He pushed "community policing" to put more cops on the street. He worked with the police department to put more civilians in desk positions, to free even more officers for patrol duty. Crime dropped 14 percent.

The most severe hurdle Schundler faced, however was the city's $40-million deficit. First he started collecting millions in back taxes from large developers. This left him with 3000 smaller commercial and residential properties with delinquent tax liens (the tax owed, plus interest penalties) on them. Here Schundler used his Wall Street savvy to set up a trust that bought up the liens. The trust then used the underlying value of the properties as collateral for bonds, which it sold to institutional investors.

The mayor's innovation was an enormous success. Jersey City raised $25 million in cash from the sale of these bonds and will get another $27 million from notes and interest over the next five years.

Astonishingly, Schundler had put the city budget on a path to surplus. In addition, in May, he cut property tax rates, across the board, for the first time in memory.

"Is It Wrong to Be Successful?"
Schundler was making headway on nearly every city problem by the time the regular election campaign began in February 1993. There wasn't much his main opponent, Democrat Lou Manzo, could pin on the mayor's performance. Instead he ran a smear campaign. Schundler, he said, was too Republican, too rich.

Schundler didn't apologize. "It is true that I made a lot of money," he responded in one debate. "Is it wrong to be successful in business?"

The mayor emerged even more popular after the debate. Voters had been ripped off for years by professional politicians. They figured Schundler wouldn't enrich himself at their expense. "I don't think he can be bought," one wrote to a local paper.

Schundler also campaigned hard in black churches and in housing projects. His message there was the same: safe streets through more police, low taxes, workfare instead of welfare, private-school vouchers.

Manzo had the support of elected black leaders, but polls showed Schundler's conservative themes scoring surprisingly well among minority voters, including blacks. In retaliation, Manzo's supporters brought race into the campaign.

At a press conference on City Hall steps, Manzo's supporters exclaimed that a Schundler family business processed a mineral called vermiculite, the white specks that keep the soil from packing too hard in potted plants. Vermiculite was imported from South Africa. Therefor, apparently, Schundler supported apartheid.

"South African vermiculite is in the soil of almost every potted plant in almost every house in Jersey City," Schundler responded. "Does this make the people of Jersey City racist?"

Fearful of a loss, the Democratic National Committee sent in the Rev. Jesse Jackson less than a week before the election. Jackson also brought up the South Africa issue. "The values Lou Manzo represents are the values of the U.S.A., the United States of America, not the values of the U.S.A., the Union of South Africa," he claimed.

It was all to no avail. Schundler won re-election last May with 68 percent of the vote, the largest victory margin in Jersey City history. What's more, he took 60 percent of the Hispanic and 40 percent of the black vote - even winning one of the housing projects. Jersey Journal columnist Peter Weiss called his minority-vote totals "unprecedented" for a Republican.

Typical of the minority vote is Mandy Johnson, 30, a married father of two who has been a city employee for four years. An African-American born and raised in public housing, Johnson told friends he was voting for Schundler and they listened. "We elected Democrats all our lives and we're still in the same predicament." Now he, too, has hope. "I think Mayor Schundler is going to do a great Job for Jersey City."

Since his re-election, Schundler continues to preach for economic revival through low taxes, and against government-fostered dependency. "The roots of social salvation," he says, "do not come through the mere removal of deprivation, but through enabling and encouraging each citizen to contribute to others."

High on the Schundler agenda is a school-voucher program, to give parents the choice of sending their children to public or private schools. And if New Jersey elects a Republican governor this fall to go along with the Republican majority already in the legislature, vouchers could become a reality in less than a year.

"I love Jersey City," Schundler says with conviction. "I feel it's my mission not only to benefit our people, but truly to make this city a light to the nation."


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Hudson County Facts Winter 2006 by Anthony Olszewski
Hudson County, New Jersey is a place of many firsts - including genocide and slavery.
Political corruption is a tradition here.
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