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A New Jersey Tax Revolt?
A new movement seeks to rouse the state’s burdened taxpayers.
Winter 2004

Jersey Republicans suffered a humiliating defeat in November’s elections, even as the GOP made big gains across much of the rest of the country. Jersey’s floundering Republicans face a similar problem to that of their equally unsuccessful New York brethren: powerful public-sector groups that live off government money and push incessantly for ever higher taxes have seized control of the state’s politics, and feckless GOP leaders have accommodated them, leaving the state party without core principles and alienating its voting base. Jersey’s overburdened taxpayers—they pay the second-highest state and local taxes in the country (behind only New York’s)—have nowhere to turn for a real alternative to Democratic big spenders.

In New York, the Republican faithful seem to pin hope for reenergizing the party on the possibility of GOP star Rudy Giuliani returning to politics to run for governor or U.S. senator. But in Jersey, where there’s no one with Giuliani’s stature to hope for, former Jersey City mayor and Republican gubernatorial candidate Bret Schundler is taking a different approach. Instead of looking for a political celebrity to restore Republican fortunes, he’s formed a new group, Empower the People, that seeks to organize fed-up taxpayers into a muscular new political force.

Schundler’s group is focusing on a few key issues “that bring people together in opposition” to the status quo—the state’s soaring property taxes, inequitable education funding, bloated and inefficient government. “In New Jersey, the tax recipients are more organized than the taxpayers,” says Schundler. “We have to change that.”

Jersey state pols are making Schundler’s task easier every day. The latest outrage: a legislative proposal, sprung on voters immediately after the election, to hike gasoline taxes by up to 12.5 cents a gallon, even as the local economy struggles to get out of a recession. In a state that’s sixth in the nation in cars per capita, the new levy, initially backed by Democrats and some Republicans, drew opposition from over 70 percent of Jersey residents. Tax-hikers backed off.

Empower the People is doing more than opposing new taxes, however. It is seeking passage of state constitutional amendments limiting state government spending and rewarding municipalities that live within budget limits by distributing surplus state funds to them for property-tax relief. These “return the money” amendments, as Schundler dubs them, would prevent the state from spending recklessly when tax receipts are rolling in, as it has traditionally done. It was just such intemperate spending in the late 1990s, when Jersey garnered hundreds of millions of tax dollars in windfalls from the expanding economy, that swelled the state’s budget and produced a fiscal squeeze once the recession hit. Schundler has set up 40 meetings around the state for early 2004 to kick off the effort for the constitutional reform. “We’re going to find out if it’s possible to build a movement this way,” he says.

Schundler faces formidable challenges. Public-sector interests, led by the state’s teachers’ association, are effective at menacing any candidates who dare to oppose them. They’ve convinced some suburban voters, for example, that any cutbacks in education funding will threaten their kids’ future—even though New Jersey spends more money per pupil than any other state yet ranks only average in test scores and graduation rates.

Moreover, getting a new message out to New Jersey’s large number of suburban swing voters isn’t easy. Advertising in the media market, split between New York and Philadelphia, is expensive, and stations tend not to offer much local Jersey news. To get around these obstacles, Schundler is using the Web to reach voters and to enlist many volunteers to do small amounts of work—in some cases just a few minutes a week from home.

Schundler is working chiefly outside the state party establishment. His brilliant—and successful—campaign to win the 2001 New Jersey Republican gubernatorial nomination had set off a minor intra-party war, with the entrenched party establishment working diligently to undermine him in the primary. In the general election, though, Schundler—who had won high praise for his efficacy as a Republican mayor of heavily Democratic Jersey City—ran a far less impressive campaign, letting Democrats and the liberal press paint him as an extremist. His big loss to a mediocre Democratic candidate, the now unpopular Jim McGreevey, enabled state Republican moderates to say, “I told you so,” and argue that the party needed to move left if it wanted to be relevant.

Schundler rejects this view, and the taxpayer anger that could make his movement a success appears to be building, judging from the many people who’ve posted their opinions on the Empower the People website. “I have seen my property tax TRIPLE in the last 10 years with absolutely NO positive impact on public services,” writes Thomas of Somerset County, in a typical posting.

New Jersey has already seen what such anger can do. Former Democratic governor Jim Florio’s income-tax boost in 1990 sparked a backlash that eventually cost him his job and helped elect Republican Christine Whitman, who briefly cut taxes before the vibrant economy of the mid- and late 1990s allowed both parties to resume their free-spending ways.

Yet anyone in Jersey hoping that an economic rebound will provide fuel for yet more spending is kidding himself. Like New York, which has assured itself of big spending hikes with sweetheart public-employee pension deals and a runaway Medicaid program, New Jersey operates under a web of court-ordered school spending, cushy teacher contracts, and layers of duplicative government that continue to propel expenditures into the stratosphere. Nothing short of fundamental reform will fix the state’s woes—and nothing short of a taxpayers’ revolt seems capable of sparking reform.

While New York taxpayers wait for some charismatic leader to arise and do battle for them against the highest taxes in the nation, Schundler is trying to get taxpayers in New Jersey to go to war for themselves. Jersey just might have something to teach New York.

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