Mayor Schundler Has a List To Buck Democratic Past

FOR much of this century, Jersey City politics have been synonymous with the Democratic Party.

This is an immigrant-rich city just over the Hudson River from Manhattan, where 41 percent of the residents don't speak English at home. For nearly 80 years, it has played host to a string of notoriously corrupt political bosses such as Frank "I am the law" Hague, who had a special desk with a drawer that opened in the front for cash contributions.

So, some find it hard to conceive of this city as a national laboratory for Republican Party blueprints to remake local government. But that's what the city's first Republican mayor since 1917, Bret Schundler, is trying to accomplish.

Mr. Schundler's top reform priorities include education, welfare, and health care. If he can succeed here, his programs could eventually become national models. New Jersey Monthly Magazine calls Schundler the only local politician with a national profile.

"Bret is a visionary," says Myron Magnet, editor of City Journal, published by the conservative Manhattan Institute in New York. "If Jersey City can turn around, there is hope for the rest of us."

Jersey City remains something of an urban potpourri of large corporate offices and 1950s-era luncheonettes. As New Jersey's second-largest city, it has benefitted from a Wall Street exodus by firms escaping New York taxes.

Whether Schundler's vision becomes reality, however, is another matter. Take health care reform. Last year, Schundler proposed that Jersey City convert its municipal employees' health care to Medical Savings Accounts (MSA), an important part of the Republican health care solution.

In this program, the city buys an insurance policy to cover catastrophic events and places $2,000 in an employee's MSA to be used for any medical purposes. Any expense over $2,000 is covered under the insurance policy.

But employees can pocket money left in the MSA at year's end. "The employees have an incentive not to spend the cash gratuitously" since they get to keep what is left over, says Schundler.

While the plan has caught the eye of federal officials, it hasn't been that enthusiastically accepted in Jersey City. Initially, the democratic-controlled Municipal Council, bolstered by opposition from the city's unions and retirees, would not approve it. Finally, the Council approved it for management-level employees.

The 100 employees who have signed up for the program won't know until Christmas how much, if any, of their MSAs they will get back. The savings, estimates Tom DeGise, president of the Council, is about $20,000 in premiums. "To be frank there was an awful lot of energy spent for a minimum amount of gain," he says.

Schundler says the MSA program allows people to make their own decisions - a theme that runs throughout his policies.

Schundler is an unlikely Republican. In 1984 he campaigned for Gary Hart. Later, he became a bond trader at Salomon Brothers. Dressed in white shirt and conservative tie, he looks more like an investment banker than mayor of a city with annual average income of $10,000 per person.

He moved to Jersey City and in 1992 switched parties and ran on the issue of education reform, especially the idea of giving residents vouchers that can be used at the schools of their choice.

Under Schundler's plan, vouchers would be worth more for public than private schools. But the vouchers would also benefit private schools since it would help relieve some of the financial burden of the tuition.

Schundler, however, has little control over the Jersey City school system since the state took it over in 1988 after decades of low student scores. He says the state takeover has been a failure.

"We still have the same high drop-out rate, the same low ability to pass standardized tests and the same amount of people leaving the school system without skills and unable to find work," says Schundler. A bill is being pushed to return the schools to local control.

To try to get his voucher program enacted, Schundler went to Gov. Christine Todd Whitman (R), who initially favored the idea but has since decided to hold hearings.

To counter opposition from the powerful state teachers union, Schundler has formed a group called "Save Our School Children," which is composed of more than 40 business, non-profit, and religious groups.

The Federation of Teachers has opposed the concept which the union claims serves as a way that parents can send the best students to private schools. "It leaves behind those least able to get admitted," says Jewell Gould, director of research for the American Federation of Teachers in Washington, D.C.

Schundler's critics question how much he has been able to accomplish since he was elected mayor in 1992. "A lot of people have said, look the schools are still rotten, we've still got crime, taxes are still too high and the city is still in a financially difficult situation," says Schundler. He replies, "All of it is true." But, he quickly adds, that turning around such a large system as Jersey City is like reversing an ocean liner.