Stateline Story

New Jersey Gov-Elect Pledges 'Fiscal Reality'

Democrat Jim McGreevey had been New Jersey's governor-elect less than 24 hours before he used a post-election news conference Nov. 7 to call on Republicans who remain in control of state government through January to stop spending money and freeze discretionary programs.

"We anticipated a budget shortfall, but the October revenue numbers demonstrated a shortfall of significantly greater magnitude than we expected," McGreevey said in a recent interview. By his calculations, an anticipated $1 billion surplus on June 2002 could actually turn into a $900 million deficit if quick action is not taken.

To paraphrase former Yankee catcher and New Jersey resident Yogi Berra, it must feel like dj vu all over again for McGreevey.

Twelve years ago, a 32-year-old McGreevey was savoring his first electoral victory as a member of the new Democratic majority in the state Assembly. But economic storm clouds were thundering in 1989, and incoming Democratic Gov. Jim Florio also found a projected budget surplus was an illusion.

Florio proposed to plug his deficit and meet a court-ordered increase in school aid by raising income, sales, tobacco, alcohol and fuel taxes by $2.8 billion all told. Freshman McGreevey toed the party line and voted with fellow Democrats for the tax hikes.

The theory was that the public would forget what happened in the beginning of Florio's term, but voters remembered and delivered a Republican legislative landslide in the 1991 midterm races, followed by Florio's defeat by Republican Christie Whitman in 1993.

McGreevey was spared from the political bloodshed by retreating to his hometown to run in 1991 for mayor of Woodbridge, a 23-square-mile township of 97,000.

Situated at the intersection of the state's urban and suburban automotive arteries, the New Jersey Turnpike and the Garden State Parkway,Woodbridge is a microcosm of the state. It is home to refineries and warehouses as well as tree-lined neighborhoods and country clubs.

Upon winning the keys to town hall, McGreevey found himself in familiar territory: the incumbent he had ousted tried to cling to office by slashing taxes without lowering spending. McGreevey found unpaid bills, looming property tax appeals, and a deficit. He plugged the gap by raising taxes back to 1990 levels, and borrowing money that is still being repaid today.

As mayor, he generally held the line on spending, and was credited with cleaning up what had been a hotbed of political corruption in Democrat-dominated Middlesex County. He splurged on some populist legal battles, including a fight with New York over garbage that washed ashore from a massive city landfill in Staten Island, and an unsuccessful bout with banks to prohibit fees on automated teller machines in town. Last year, he considered but withdrew a plan to require all commercial properties to fly the American flag.

Township voters rewarded him with three terms, and in the most recent election in 1999 he won 86 percent of the vote. During that time, he also returned to state politics, and was finishing his first term in the stateSenate in 1997 when he won a three-way primary for the Democratic gubernatorial nomination. Republican Whitman was considered unbeatable, but McGreevey's almost robotic focus on a few issues, especially auto insurance and property taxes, got him surprisingly close.

Whitman won by just 26,000 votes, or 1 percentage point, and McGreevey's political stock soared. Dubbed ``the energizer candidate'' because he never stopped campaigning as long as there was another hand to shake or back to slap, McGreevey treated his defeat in 1997 as just a bump in the road to the 2001 election. "The whole time between elections, on any given Tuesday night, he was down in Elmer Township or somewhere having pot roast with some municipal Democratic committee person,'' said Michael Murphy, the son of a former Democratic governor who was once McGreevey's rival and is now a supporter. "And after that dinner, he'd be telling Mrs. McGuillicuddy that that's the best pot roast he ever tasted.''

The grass-roots support paid off and McGreevey faced only token opposition in the 2001 primary while Republicans staged a bloody battle between the party's moderate and conservative wings. The conservative candidate, former Jersey City Mayor Bret Schundler, was never able to reunite his party after capturing the nomination. McGreevey, meanwhile, used Democrats' significant financial advantage to pound Schundler's conservative views and fund general attacks on the GOP record over the past decade.

The result delivered McGreevey a landslide victory on Nov. 6 and put the Assembly once again under Democratic control, while the state Senate will be split between the parties, 20-20.

McGreevey's front-runner status throughout the race also allowed him to avoid making bold promises that would be difficult to deliver in a declining economy.

"During the course of the campaign we were criticized for being too conservative,'' McGreevey said recently. ``In retrospect, it was the correct decision.''

Indeed, in a reversal of the traditional Democrat/Republican roles, he had accused Schundler of making expensive promises that would be impossible to keep, such as eliminating parkway tolls and slashing income and corporate taxes.

McGreevey says his chief goal now is to confront the economic downturn without following in Florio's ill-chosen footsteps. "We're not going to increase taxes. We're going to live within our means. We're going to cut government,'' he said.

But to make any politically painful cuts, he is going to need Republican support, especially in the divided Senate. As a result, he has avoided overt political rhetoric as he continually exhorts the Legislature to avoid the urge for a lame-duck spending binge.

"It's not a matter of assessing blame. Forty-four states have reported lower-than-projected revenue numbers. The profligate spending of the past eight years must stop,'' he said. "It's not a partisan matter for me, it's a matter of fiscal reality.''