Republican is their shepherd in Jersey City : A white, Bible-quoting GOP mayor is trying to lead this Democratic bastion through a valley of urban woes. His stellar start has been slowed.

Four years ago, Bret Schundler was elected mayor of Jersey City, ending more than 75 years of Democratic rule with a promise to turn this battered city across the Hudson River from Manhattan into “a little slice of heaven.”

By any yardstick, he was an odd choice: a Republican in a Democratic bastion; a white in a city that is 65% minority; a Harvard sociology major and millionaire Wall Streeter in a city where two-thirds of high school students do not graduate and per capita income is $10,000; a squeaky-clean, Bible-quoting idealist in a county that had sent 14 of its mayors off to jail over 20 years.

“A lot of people in Jersey City had been abused by the corrupt urban machine for so long, they still refuse to believe anybody in government is anything but a crook,” Schundler, 37, said recently. “So I have to deal with the prejudice that I am a crook too. Then there are people who think because I am a Republican I am going to be heartless.”

Schundler, a former Democrat who ran Gary Hart’s 1984 New Jersey campaign, won a special election in 1992 after Mayor Gerald McCann was forced from office after conviction on mail fraud and income-tax evasion charges.

For Republicans, stung by the perception that theirs is a party of white suburbia with little compassion for the problems of the inner city, Schundler became an overnight GOP star as he raced through his first six months in office, cutting property taxes, slashing spending, putting more cops on the beat and setting up “neighborhood improvement districts” where residents made decisions usually reserved for city hall bureaucrats.

Perhaps most important, Schundler dismantled the patronage system, battled the powerful municipal unions and reached out to every segment of one of America’s most ethnically diverse cities.

The City Council slate he put together for the regular election in 1993--he won with a record 68% of the vote, including 40% of the black vote--included two African Americans, two Latinos and three women.

House Speaker Newt Gingrich (R-Ga.) called him one of the most exciting Republicans in the country. Time magazine included him in its 1994 list of 50 future leaders under 40. The Wall Street Journal lauded him and his Jack Kemp-style economic policies. He was proof, supporters said, that empowerment, not entitlement, was the key to rescuing the nation’s troubled cities.

“You don’t want government to make itself strong,” Schundler says. “You want government to make the weak strong.”

Now Schundler is facing his most difficult challenge. Although housing starts are up and poverty, according to one study, has dropped substantially, Jersey City faces a $20-million shortfall this year. Property taxes have crept back up in the wake of a court order that Jersey City pay back $102 million in taxes collected illegally by the previous administration. And the schools, where only 16% of ninth-graders can pass proficiency tests, remain under state control.

Schundler now endorses a payroll tax for people who work in Jersey City. He says it will raise $20 million without hurting the middle class.

His cherished program of school vouchers, enabling parents to choose what school their children attend, appears unlikely to win approval. It was applauded by Republicans nationally but drew limited support at home.

“Schundler started very strong,” said Stephen Salmore, a professor of political science at Rutgers University’s Eagleton Institute of Politics.

“He took advantage of a split in the Democratic Party and he came across as someone with fresh ideas. He had the opportunity to recast Jersey City politics, but I’m not sure he’s really done that. The problem is that he’s been unable to bring municipal spending in line with revenues, and in going back for a tax increase, he undercut his basic message. Jersey City is still a Democratic bastion, and I think you have to build more support in grass-roots ways than Schundler has been able to do.”

But undeniably, Schundler’s entrepreneurial approach to local government is changing the structure, and maybe the heart, of a city long cited as a example of urban despair.

“In my 18 years here I don’t think another Jersey City mayor has provided the kind of opportunities Mayor Schundler has,” said Eleanor Watson, president of the Hudson County Urban League.

“In dealing with him, I find he’s relatively forthright as far as politicians go. He says he can or he can’t.”

Asked how he would rate his performance as mayor, Schundler answers without a blink, “A-plus.”

Still, with the Democratic machine reorganizing, he faces a tough campaign for reelection in May 1997. No Jersey City mayor has been reelected and served out his second term since the days of Frank “I am the law” Hague, who ruled from 1917 to 1949.

Hague put his opponents in jail and kept a safe in his office stuffed with bribe money. By contrast, in Schundler’s office is the Bible and the Koran, the Muslims’ holy book.

When asked why he and his wife, Lynn, an attorney, choose to make Jersey City home when most successful Wall Street executives head off to places like Greenwich, Conn., or Westchester, N.Y., Schundler replies with the same combination of pragmatism and idealism he brings to his job.

First, he says, Jersey City was so convenient to Manhattan, just 10 minutes away by subway under the Hudson. And second, “my sense as a Christian was simply that one of the great charges Jesus has for us is that you are supposed to serve the poor and feed the hungry.”