Image: Eagleton Institute of Politics, Rutgers University
Clifford Goldman served as State Treasurer during the administration of Governor Brendan Byrne from 1976 to 1982. Previously, he was the first executive director of the Hackensack Meadowlands Development Commission in the administrations of Governors Richard Hughes and William Cahill andan assistant to Commissioner Paul Ylvislaker of the Department of Community Affairs. He has worked as a financial consultant to many state, county and local government agencies and authorities and taught public finance as a Visiting Professor at the Woodrow Wilson School of Public and International Affairs at Princeton University, where he was awarded a Ph.D and masters degree, and also holds a B.A. degree from Rutgers University.
The fight over the income tax dominated the news, so Byrne's other accomplishments were largely unnoticed. Governor Cahill had started the State Lottery as a 3-number pick, based on the illegal numbers racket. But, the lottery machine, not the buyer, picked the number. This took away the romance of the customer playing his or her lucky number, birthday, address, or whatever. Byrne introduced the technology for "pick your own number" and lottery revenues soared. He created the Economic Development Authority which financed hundreds of millions of dollars in worthwhile projects during a period when steep interest rates chilled private financing.
As a former judge and prosecutor, Byrne took special interest in rewriting the State's archaic criminal code and reforming sentencing and parole procedures. He also created the nation's first public advocate, a member of his cabinet heading a department empowered to take action on its own to advance citizen interests in challenging utility rates and procedures, restrictive housing policies and local ordinances barring outsiders from access to such common resources as coastal beaches. Byrne also initiated the nation's first public financing of gubernatorial campaigns, weakening the traditional influence of political bosses and large contributors in the election of the state's chief executive, and signed the Sunshine Act to make authority and agency meetings open to the public. During the period of gasoline shortages, he was one of the first governors in the nation to shorten gas station waiting lines by instituting a plan based on odd or even vehicle license numbers to allow drivers to purchase gasoline on alternate days, a model quickly followed by other states. In the years when New Jersey's sewage plants still were discharging raw sewage into the ocean and nearby waterways, Byrne directed a billion dollars into self-financing new or upgraded sewage treatment plants to end such discharges, restoring the quality of both offshore and inland waters.
In health care, Byrne pioneered a system for hospital rate setting that was adopted nationally by Medicare, ending the traditional system for paying for each service by setting standard fixed rates for treating common conditions, thus forcing hospitals to absorb excessive costs. To reduce the State's historic reliance on confining mentally ill and severely disabled in large, outmoded institutions, the Department of Human Services began moving patients out to community care facilities, group homes and other services, a much more humane and effective method to care for those with special needs.
In Byrne's first year in office in 1974, an oil tanker broke apart on the Delaware River, creating a hectic search for money to pay for booms to contain the oil and protect the riverfront marshlands. In the absence of any immediate source of funds, Byrne authorized the use of the Governor's Emergency Fund to avert the disaster. That episode later led to the New Jersey Spill Compensation Fund, financed by a tax on oil and chemical companies, along with rules to disburse the funds in the event of future spills and to clean up toxic sites. After New Jersey enacted the law proposed by Byrne, then Congressman Jim Florio introduced legislation in the Congress largely modeled on the state’s program which became the federal Superfund—the primary mechanism for cleaning up toxic spills and sites throughout the nation.
On occasion, even small actions which gained little public notice set a tone for larger themes. One day, for example, Byrne called me to say that a box of hand soap had been delivered to his residence and that each bar had a 5-cents off coupon. He wanted to know if the State had gotten those nickels. He had worked for Governor Robert Meyner and often related how Meyner would look at both sides of a nickel before spending it--Meyner’s way of encouraging economy ingovernment. During the Byrne years, taking his anecdote on Governor Meyner and others to heart, we had workers caulking windows, testing the temperature of hot water, measuring the lumens of lighting fixtures, turning off unneeded lights on streets and highways, and taking away State cars which missed servicing dates. State workers drove Chevy Chevettes without air conditioning, all to save energy and money.
These measures—largely implemented without the typical public promotion of present-day politicians—were coupled with major efforts to reform how the state spent its funds. We saved millions of dollars by insisting on bidding instead of awarding no-bid contracts during emergencies such as the serious drought we suffered, as if stagflation and the gasoline crisis were not enough to contend with.
In 1975, New York City's near bankruptcy threatened the financial viability of cities throughout the country. New Jersey invented and enacted the Qualified Bond program by which State Aid would be routed to the trustee for municipal bonds rather than to the cities. This cost essentially nothing, gave New Jersey cities and school districts an ‘A’ credit rating, and saved millions of dollars in interest costs to this day. The next year, the School Bond Reserve Act passed and gave all school districts a ‘AA’ rating by insuring them with the assets of the 19th Century School Fund, derived from the sale of coastal riparian lands.
Also in 1975, the New York Urban Development Corporation defaulted on "moral pledge" notes issued without a guarantee of repayment by the New York state government. Housing finance agencies across the country went bankrupt. They had relied on such notes rather than bonds to finance their projects and could not roll over the notes or issue bonds. New Jersey faced the same prospect. But the State decided to sell bonds secured only by the revenues of the projects rather than the "moral pledge" of State backing. Governor Byrne invited the major state bankers to breakfast, imploring them to buy the bonds. Some did. The bond issue succeeded, leading to a housing boom. New Jersey thus gained access to almost unlimited federal housing aid that would have gone to the bankrupt agencies in the other states.
After a voter referendum had rejected a poorly-designed state bond proposal, Byrne created the Capital Budgeting and Planning Commission to review and propose future bond issues. To emphasize its bi-partisan nature, he also appointed Governor Cahill, his Republican predecessor, as its chairman. After the Commission’s creation, twenty of twenty-one bond proposals were approved by the voters.
In other areas, the Governor restructured how New Jersey financed and managed State buildings. The Medical School in Newark, under development since the Newark riots, had been financed with indirect State backing. In 1977, Byrne asked the voters to approve a "full faith and credit" State bond issue to refund those bonds, which unlike the prior financing pledged that the State would fully stand behind repayment and thus secured much lower interest rates. The refunding saved many millions of dollars, which were used for medical education in New Brunswick. Then, in 1978, the voters approved a State bond issue to replace the "moral pledge" bonds issued to build the Sports Complex. The savings paid most of the cost of the Meadowlands arena, bringing the Nets and the Devils to New Jersey.
Previous administrations had been tarnished by the State's leasing of private office space. Under Byrne, the State shifted to State-owned offices, first the Justice Complex, leased from the Mercer County Improvement Authority and owned by the State when the bonds were paid. Later, the State created its own Building Authority to finance, build, and own its office buildings beginning with Environmental Protection, Community Affairs, and Commerce. The State now owns those facilities instead of renting them.
The voters also approved casino gambling in Atlantic City, an approval which casino advocates agreed would not have taken place without Byrne's endorsement. Byrne's oversight system for reviewing casino applicants and gaming operations worked so well that it became the model for other states,including Nevada. Despite the City’s more recent problems, we should not forget that after Byrne supported casinos in Atlantic City—a decision opposed internally by key members of his cabinet and staff—the City enjoyed a 30-year boom in development, the creation of over 40,000 jobs and its casinos generated millions in tax relief and in support of services for senior citizens and the disabled. It is unfortunate that during those decades of growth, decision-makers at the state and local levels--as well as within the casino-hotel industry itself--did not act to pursue Byrne's goal of diversifying Atlantic City beyond gambling to make it a true "family resort."
New Jersey's bicentennial celebration in 1976 took place in Liberty State Park. The restoration of the Jersey City waterfront—fouled over the years by dumping of garbage and other pollution—had been talked about for decades by local gadflies and politicians, but there had been no action. When Byrne took office, he made the area a top priority, with his environmental commissioner David Bardin overseeing a comprehensive cleanup and redevelopment so that the Park created on bankrupt railroad land became the most visited park in New Jersey, the home of the New Jersey Science Center, a restored Jersey Central Railroad Terminal, the site of major events and festivals and a spur to the economic development of Jersey City.
In other areas of the state, Byrne took actions which permanently changed how New Jersey’s pattern of how it used its limited land and natural resources would evolve. He rejected a plan to build a New Jersey Turnpike spur through the Pinelands and then followed up with controversial legislation to save the million-acre Pinelands, perhaps his greatest accomplishment. He also killed a proposal to dam the Delaware River at Tocks Island, preserving the free-flowing river while also implementing an alternative plan to develop reservoirs and a network of connecting pipelines to meet future water supply needs. He signed legislation to finance the purchase of development rights to farmland, thus easing pressure on farmers to sell their land to developers.
When Byrne took office, New Jersey had been subsidizing struggling privately-owned bus and rail lines for over two decades, most of which provided steadily deteriorating service for their passengers. In the face of strong opposition from the companies and labor unions, Byrne created the New Jersey Transit Corporation, buying the major bus lines at very low cost. Governor Kean then added the rail lines to the new agency. Until the recent disclosures of its underfunding and mismanagement, New Jersey Transit served for many years as a national model of an efficient, effective public transit system.
Despite his diverse achievements, Byrne was in no way a popular governor. While he overcame the brand of "One-Term Byrne" in his surprising re-election, his stubborness, refusal to cater to perceptions of political correctness and identification with controversial issues like the income tax left their mark; throughout his tenure as governor, he endured low voter approval ratings and continued attacks by politicians and media critics. In his final year in office, he faced condemnation over his refusal to overrule the decision of the Sports Authority to label the new Meadowlands Arena--his own initiative adding to the original Meadowlands concept--with his own name.
But looking back, and comparing his record with others, he left New Jersey a proud legacy. When his second term ended, New Jersey had a balanced budget, a sizable surplus, its pension funds were 105% funded, and it was rated AAA by all rating agencies. As Byrne would say, people even started waving at him with all five fingers.