As reported in NJ.COM on September 2, 2013, Police and Firefighters across New Jersey are walking away from the negotiations table with much less money.

Since January of 2011 — following a wave of reforms that capped municipal spending and arbitration awards — Police and Firefighter Unions have signed at least 160 new contracts, according to the New Jersey Public Employment Relations Commission.

The average annual wage increase for those contracts was around 1.86 percent, the lowest bump in at least two decades, PERC records show. The drop is happening in all contracts, whether negotiated or awarded by an arbitrator, and suggests a seismic shift in police and fire negotiations.

After reviewing the figures a Christie spokesman stated “We all know that the key and reasonable complaints of many in New Jersey is property taxes, and one of the key drivers was arbitration awards that were in the 3 and 4 percent range,” “Reasonable salaries are important to police and fire personnel, but the indisputable result was runaway increases that were not sustainable, particularly when we entered a period of recession.”

In 2010, Christie and Democratic lawmakers who control the Legislature enacted a 2 percent cap on local tax growth. But they said the levy cap would be impossible to manage if arbitrators awarded new contracts to police and fire unions — the biggest expense in many towns — that included salary increases above 2 percent.

So, Christie and lawmakers took the dramatic step of capping arbitration awards at 2 percent, too, the only state in the nation to enact such a restriction. They also dramatically sped up the arbitration process and required arbitrators to consider the full compensation package, such as longevity pay and step increases — not just salaries — as counting toward the cap.

The arbitration caps are set to expire in April unless the Legislature extends them, setting up one of the first legislative battles of the year. A task force was created to evaluate the caps, and its most comprehensive report is expected to be issued next month.

Christie wants to extend them, but his opponent, state Sen. Barbara Buono (D-Middlesex), who supported the 2010 reform, is taking a wait-and-see approach.“Sen. Buono believes that the only responsible way to address this issue is to review the findings of the interest arbitration task force, evaluate revenues and sit down with stakeholders,” Buono spokesman David Turner said. “Then, as governor, she will weigh in after analyzing their final report.”

Assemblyman Declan O’Scanlon (R-Monmouth), one of the most vocal supporters of the cap, said any lawmaker who doesn’t support its extension “needs to go back to remedial math.” “You can’t have a levy cap without an arbitration award cap. It’s completely contradictory,” O’Scanlon said. “You can’t say we are going to cap the amount you can raise to pay your bills and then let an arbitrator hand out higher awards on your biggest budget line item.”

O’Scanlon also said the real power of the reform law is that it requires arbitrators to consider the full compensation package. He said historical records of salary increases are misleading because they fail to take into account other perks like longevity pay and step increases.