As reported in the Trentonian on October 19, 2010, New Jersey lawmakers failed to reach an agreement with the Governor’s office over how to ensure that police and firefighters’ raises are based on economic conditions in the towns where they work without trampling on their right to negotiate contracts.

Governor Chris Christie has been pushing for a 2 percent cap on annual salary and benefits increases for police and firefighters to help municipalities budget within a 2 percent cap that goes into effect January 1, 2010. Many mayors support the cap on arbitration awards, but police and firefighter unions are bitterly opposed. Unions indicate annual increases in health care costs would more than eat up the 2 percent increase.

Assembly Budget Committee Chairman Lou Greenwald emerged after about two hours in the office of the Governor’s counsel saying talks were continuing. “We’re going to talk throughout the night,” Greenwald said. “I think we had a productive conversation. I do not think we’re far away in our baseline numbers.”

Christie, a Republican, has made arbitration reform a centerpiece of his property tax stabilization efforts. He’s also identified changes in affordable housing rules, eliminating some state-imposed costs to towns and allowing towns to opt out of civil service rules for hiring workers as key components of his agenda.

Since police and firefighters are prohibited from striking, their contract disputes are settled by an arbitrator. Towns have been complaining that the process favors public workers. They say contract awards greater than 2 percent will force them to cut services elsewhere, unless changes are made.

Greenwald’s bill would require an arbitrator to resolve contractual impasses by selecting among “fair and final” offers submitted by each party in the dispute. It would also change the way arbitrators are selected. A competing bill, by Republican Assemblyman Declan O’Scanlon of Monmouth County, mirrors the Governor’s proposal for a 2 percent cap on salary and benefits increases, and prohibits either side from proposing more.