This section references a major influence peddling scandal at New Jersey’s State Housing Finance Agency, whose primary role was to provide low-interest loans to developers that would build housing for low and middle-income residents. In the late 1970s and early 1980s, journalists and government investigations found that agency officials took bribes from developers trying to secure loans for projects. The scandal led to the resignation of HFA's Executive Director, William Johnston. For more information, see the investigatory report compiled in 1981

In 1976, New Jersey voters approved a referendum that legalized casino gambling in Atlantic City, making New Jersey the only state outside of Nevada with casinos. Atlantic City had a long history dating back to the early 20th century as a gathering place for revelers thanks its boardwalk, restaurants, hotels, and nightclubs—and saw its fair share of illegal drinking and gambling during the Prohibition era of the 1920s and 1930s. Proponents of legalization in the 1970s thought casino gambling could create tax revenue for the state and contribute to Atlantic City’s economic revitalization.

he Hackensack Meadowlands refers to a large sports complex that was built in the New Jersey suburbs across the Hudson River from New York City. 1976 saw the opening of the Meadowlands Racetrack and Giants Stadium (home to the National Football League’s New York Giants). This was an example of an economic development initiative that was outside New Jersey’s struggling urban centers. It ultimately took decades before construction could be completed on a major shopping complex mentioned in the news report. As mentioned in the clip, some opponents argued that the development would harm urban shopping districts; environmental groups also raised concerns about ecological destruction of the wetlands area.

The city of Camden joined Newark as one of the prime examples of urban blight in New Jersey. In the early 20th century, Camden was a major industrial center with a major shipbuilding industry and thousands of manufacturing jobs at firms like the Campbell’s Soup Company and the electronics company, RCA. Like so many Northeastern cities, deindustrialization and the flight of white middle-class residents hit Camden hard in the 1960s and 1970s. Between 1950 and 1980, the city’s population fell by more than 30% from around 125,000 to 85,000, and the number of manufacturing faced a similarly steep downward trajectory. The construction of a major prison in Camden provides a sad irony; desperate for money, Camden took on a state project that was arguably made necessary by the rise in crime in decaying cities like Camden.

Like many states in the mid-1970s, New Jersey was in dire fiscal straits and the state’s public schools were underfunded. At the same time, New Jersey residents were frustrated by rising property taxes, the major mechanism for funding schools at the time. In this environment, advocates who had spent years fighting for a statewide progressive income tax finally won the day. They argued that the tax could help the state provide more funding to schools and thus relieve pressure to further raise property taxes. They also argued that a state income tax was more equitable. It was structured as a “progressive” tax, so higher-income residents paid higher rates than low-income residents. And unlike property taxes collected at a more local level—in which wealthier localities could collect far more per capita revenue than struggling cities—a state tax could distribute money to help constrain the pattern in which suburban school districts were much better funded than poor urban districts. After much political wrangling, the New Jersey legislature established the new income tax in 1976.

Across the United States during a time of growing inflation, there was mounting frustration with taxation. The passage of the famous “Prop 13” referendum in California capped property tax rates in that state and placed the steep requirement that any tax increase required a two-thirds majority in both houses of the state legislature. Rather than directly limit property tax levels, the New Jersey legislature passed a law intended to stifle public spending: county, school, and municipal governments were not allowed to increase their budgets by more than 5% in any given year.

In the 1970s, the Federal government provided significant funding to municipal governments to help them deal with the fiscal challenges of the economic stagnation that had hit cities particularly hard. After Ronald Reagan’s victory in the 1980 election, federal policy moved in a different direction. Under what became known as “New Federalism,” Reagan argued that more government programs should be funded and operated at the local and state level, with the federal government playing a smaller role in funding these efforts. The resulting changes in policy led to declines in federal “block grant” programs, in which local governments and organizations used federal money to fund community development and services programs. Critics argued that this change denied necessary federal aid to cities at the time they needed it most; deindustrialization and suburbanization undermined the budgets of urban centers at the same time as struggling urban residents were most in need of government-funded social services.