- 1973 Campaign and Election
- The Byrne Income Tax Proposal
- Passage of New Jersey’s First State Income Tax
- Campaign and Election of 1977
- Governor Brendan Byrne’s Second Term and Legacy
- Back to Contents
1973 Campaign and Election
In part due to his support for a statewide income tax—in addition to allegations of corruption within his administration and the state Republican party in general—Governor William Cahill faced a primary challenge in his 1973 campaign for re-election. On June 5, 1973, Congressman Charles Sandman, who had run in the Republican gubernatorial primary two times prior, defeated Cahill, the first time in the state’s history an incumbent governor lost a primary. In the Democratic primary, meanwhile, former Essex County Prosecutor and Superior Court Judge Brendan Byrne defeated two other candidates (Anne Klein and Ralph DeRose). The income tax would play an important role in the general campaign of 1973; Sandman strongly opposed the creation of a state income tax, while Byrne said he did not anticipate that an income tax would be necessary “in the foreseeable future.” In the end, primarily due to the combination of the shadow Watergate cast over the Republican party and Byrne’s ability to run on an anti-corruption platform as “the man who couldn’t be bought,” Byrne easily won the governorship by the largest plurality in state history. Quickly, however, his statement on taxes would come back to haunt him.
The Byrne Income Tax Proposal
As Governor Byrne took office, the school funding issue—particularly in the wake of the New Jersey Supreme Court’s Robinson v. Cahill decision—became larger and larger. The State would need a mechanism to fund whatever school funding equation it devised to comply with the Court’s order. In May 1974, to help address the crisis, Governor Byrne suggested a state income tax, with the proceeds dedicated to property tax relief and school funding. One month later he called a special session of the state legislature and proposed that it pass an income tax, setting off a complex and difficult two-year fight that, in part, led to major Assembly losses for the Democrats in the 1975 elections.
The fight continued throughout 1975 and into 1976, with two key developments. First, the legislature passed a school funding formula in 1975, but with no mechanism by which to fund it. Second, after raising a number of small taxes in order to avoid dramatic spending cuts in the annual budget in the summer of 1975, in December 1975 the legislature also agreed on a compromise income tax bill. The Byrne administration, however, deemed the compromise tax insufficient to both cover the school funding formula long-term and provide property tax relief, and therefore dismissed it. The battle would continue.
Passage of New Jersey’s First State Income Tax
The issue came to a head in the spring and summer of 1976. In May 1976, the Supreme Court declared that if a school funding mechanism had not been passed by June 30th, the state would be enjoined from funding schools and all public schools would be shut down. The deadline passed and, at Governor Byrne’s urging, the Court shut down the schools. Faced with this crisis and after intense negotiations, on July 7, 1976, the Assembly and Senate passed a compromise income tax proposal and Governor Byrne signed it, creating the first state income tax in New Jersey history.
Campaign and Election of 1977
Predictably, the passage of the income tax hurt Governor Byrne’s approval ratings, making him an underdog as the 1977 campaign approached. A total of 10 Democrats—including Congressman (and future governor) Jim Florio—challenged the incumbent governor, often referred to as “one-term Byrne,” in the primary. In part due to the vote-splitting nature of such a large field, Byrne won the Democratic nomination on June 7, 1977. On the Republican side, former Senate President Raymond Bateman defeated Assemblyman (and also future governor) Tom Kean. Once again, the income tax would play a key role in the campaign. Byrne, for his part, would this time confront the issue head-on, explaining in an advertisement why he had supported the income tax despite deeming it unnecessary in the 1973 campaign, while simultaneously tying the tax to property tax rebates. Bateman, meanwhile, opposed the income tax, promoting a plan he developed to eliminate the tax. Byrne dismissed the plan, which he (due to the participation of Bill Simon in the press conference announcing it) referred to as the Bateman-Simon—or “BS”—plan. Despite an early deficit, Byrne won reelection on November 8, 1977, in the process ensuring that the income tax would survive.
Governor Brendan Byrne’s Second Term and Legacy
With the income tax secure, Governor Byrne largely turned to other issues in his second term. As the role of government continued to transform, however, the fiscal issues would not disappear. School funding remained an issue as the administration searched for more cost-efficient ways to provide a “thorough and efficient” education and, for the first time, the pension fund arose as a potential future problem. The lasting legacy of the Byrne administration from a fiscal standpoint, however, remains the passage of the first state income tax, a tax that, while revised, remains with the state today.
Links to full interviews:
- Governor Brendan Byrne
- Steven Perskie
- Orin Kramer
- Raymond Bateman
- Al Burstein
- Cliff Goldman
- Tom Cochran
- Cary Edwards
- Governor James Florio
- Chris Daggett
For more information on the Brendan Byrne Administration, click here.
Continue to Kean Administration