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Jersey City On The Way Back

Originally appeared in The Washington Times on July 22, 1996

By Grover G. Norquist

When Bret Schundler was elected mayor of Jersey City, N.J., with a record 69 percent of the vote, it caused a flutter of media excitement. After all Jersey City - which is 65 percent minority, largely working-class and only 6 percent Republican -- had not elected a Republican mayor since before World War I.

Now comes more interesting news out of Jersey City: Mr. Schundler is actually succeeding in accomplishing much of his ambitious policy agenda., and contrary to earlier rumors of political troubles, is shown by polls to be poised for a substantial re-election victory next year.

Mr. Schundler's top goal this term has been to keep Jersey City out of bankruptcy. In the years prior to his election, the city had been borrowing $40 million to $60 million annually on a $300 million budget to cover a huge structural deficit.

In a brilliant display of financial management, Mr. Schundler has reduced this deficit even while reducing the city's share of tax on property by 14 percent. In the course of accomplishing this feat, he pioneered the securitization of municipal liens on tax-delinquent properties (thereby increasing the city's tax-collection rate and decreasing its reserve requirements for uncollected taxes), cut the city's work force by 15 percent through natural attrition, made Jersey City the first governmental entity in the United States to institute Medical Savings Accounts (which has saved on the cost of providing public employee health care), and completed the largest public-private water utility partnership in the country. This last initiative alone will aid the city's budget to the tune of almost $7 million per year.

Taxes are an important political issue in Jersey City, and despite the reduction in the property tax rate going to the city, the overall property tax rate is up from its level when Mr. Schundler initially took office because of increases by the Democratically controlled county government and by the Jersey City School District, which is administered by New Jersey Gov. Christine Todd Whitman. (In 1989, under Gov. Tom Kean, New Jersey became the first state in the nation to give itself the power to directly administer troubled local school districts.)

Despite the discontent caused by high property taxes, and the fact that Mr. Schundler has been blocked by the state from diversifying Jersey City's revenue sources away from property taxes, voters appear increasingly to understand whence comes their tax pain -- and help. And Mr. Schundler is working on additional municipal tax savings -- through additional financial innovations in the tax lien market and through lobbying for an end to New Jersey's expensive county government monopoly on garbage disposal -- in order to offset even the county and school district tax increases.

Mr. Schundler's second major policy goal this term has been education reform. He played a key role in passing public charter school legislation in New Jersey, but his proposal for a Jersey City school voucher program has met with less success, as Mrs. Whitman has moved away from her campaign promise to push the initiative. This represents a significant defeat for the mayor, who has not given up the fight, but has, in the meantime, turned to raising private funds to provide scholarship assistance to needy Jersey City families.

On other policy fronts, Mr. Schundler has found the going easier. Even while dramatically reducing the total municipal operating spending, he has increased police presence on the streets through replacing officers in stationhouse desk jobs with civilians and through changing police work schedules. He has initiated Business and Neighborhood Improvement Districts, which are beginning to make the streets of Jersey City cleaner and greener. He is rebuilding the city's parks, athletic facilities and deteriorated neighborhood shopping districts, all the while reducing capital debt outstanding. And he has greatly expanded programs for Jersey City's youth and senior citizens.

Perhaps the best indicator of the mayor's success is that 9,000 new jobs have relocated to Jersey City during his tenure. Last year, for the first time in almost a decade, property values substantially increased.

All of this is good news for Jersey City. But perhaps most of all, it is good news for those interested in Mr. Schundler's brand of market-oriented policies. It suggests that Mr. Schundler's political philosophy -- which he calls "empowerment" -- may not only have great political appeal, but may, in fact, actually hold the key to unifying the country and reversing the fortunes of America's declining inner cities. At a time when the liberal wing of the Democratic Party and isolationists in both parties appear to be pulling the country apart, Mr. Schundler seems to be bringing the diverse people of Jersey City together, and moving one of America's formerly most distressed cities forward.

Grover G. Norquist is president of Americans For Tax Reform


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