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Center on the American Governor > On Governors > New Jersey Governors > Governors and State Finance: Hughes and Cahill Administrations

Governors and State Finance: Hughes and Cahill Administrations

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A transcript of all interview excerpts on this page is available here. Links to full interviews are also available.

 

Gov. Richard Hughes and the Changing Nature of State Government

When Richard Hughes won the New Jersey governorship in 1961, he took over a state in transition. Consistent with other states in the 1960s, New Jersey was beginning to fund more services at the state level, particularly in the areas of transportation infrastructure and education. As a result, the state needed more money; the state budget rose from $164.1 million in 1951 to $590 million in 1964. Hughes first proposed a $750 million capital construction bond referendum, but the bond issue was rejected by voters in November 1963. Talk then turned to the possibility of instituting the state’s first broad-based tax, a question that became a significant issue in Hughes’s race for re-election in 1965 and throughout his second term.

 

Richard Leone on the changing nature of state government and early attempts at a statewide broad-based tax in New Jersey. Leone was special assistant to Governor Richard Hughes and State Treasurer (1974-1976) under Governor Brendan Byrne. Interview on June 9, 2015. (3:56)

 

Gov. William Cahill and Early Broad-Based Tax Proposals

While the budget continued to grow, the state continued to look for new sources of revenue. Gov. Hughes’s successor, William Cahill, called for a 2-cent increase in the sales tax as a stop-gap measure, and then created a Tax Policy Committee headed by State Senator Harry Sears to create a plan for long-term tax reform in the state. In the final year of what would turn out to be his only term, Cahill faced increasing pressure in the wake of the NJ Supreme Court’s 1973 decision in Robinson v. Cahill, which declared the state’s education funding system unconstitutional, stating that every student in the state had the constitutional right to a “thorough and efficient” education. The case—and that phrase—would echo for decades, as the State searched for a funding system the Court would find equitable. But in the near-term, Cahill would support the conclusion of the Sears Commission that a state income tax was necessary. Cahill’s income tax plan would ultimately fail in the legislature, but not before splitting his own party and helping lead to his defeat in the 1973 Republican primary.

 

Governor Thomas Kean, Speaker of the New Jersey Assembly from 1972-1973, discusses his support for the Cahill tax package. Interview on March 16, 2009. (2:06)

State Treasurers Dick Leone (1974-1976) and Cliff Goldman (1976-1982) on the Sears Commission, the Cahill tax package, and its impact on Governor Cahill's reelection effort. Interview on June 9, 2015. (2:21)

 

Steven Perskie, state assemblyman from 1971-1977, on the benefits and political challenges of the Cahill tax package. Perskie left the Assembly in 1977 to successfully run for the State Senate and later became a Superior Court judge and chief of staff to Governor Jim Florio. Interview on June 29, 2009. (2:29)

Assemblyman Al Burstein (1972-1982) on the political intricacies of the Cahill tax plan. Interview on June 6, 2006. (7:48)

Links to full interviews:

For more information on Governors Hughes and Cahill, click here.

 

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