As reported by, the state law that for the last three years has capped the raises that local police officers and firefighters can get if they take contract disputes to interest arbitration will soon expire, and lawmakers have yet to propose a bill to extend what local officials say has been a key tool in the effort to keep property tax bills in check.
Governor Christie signed the 2 percent cap on interest arbitration awards into law in late 2010 after Democratic legislative leaders inserted a provision allowing the rule to sunset after three years. Now the cap will expire on April 1 unless lawmakers take new action. At the same time, legislators have drafted a measure that would increase the salaries for Cabinet officials and judges and boost the budget for their own staffs’ salaries, which haven’t increased for several years.
The salaries of police officers and firefighters account for much of a municipality’s spending, and local officials warn that a failure to extend the arbitration cap could bring on cuts in services, since the broader two percent cap on local property taxes increases, also passed in 2010, remains in effect. “If you aren’t going to have an arbitration cap, then you are going to force municipalities into making potentially draconian cuts in quality-of-life services,” said Bill Dressel, executive director of the New Jersey State League of Municipalities. “There does not seem to be a willingness to do this by April 1,” he said.
Matt Watkins, the city manager in Clifton, said the cap was the most important cost-savings measure for local towns in places like Bergen and Passaic counties passed in the last 10 years. “It has helped a great deal,” he said.
Christie, in his State of the State address in January, stressed the need to extend the arbitration cap. Dressel said he fears that the cap extension could become a bargaining chip in lawmakers’ upcoming battle with the Republican governor over the state budget this spring.
In New Jersey, public employee labor unions and local officials go into binding arbitration if they can’t agree on a contract. In such cases, an arbitrator is asked to consider each side’s argument and come up with a fair decision. After the limits were enacted in 2010, the average raise awarded by arbitrators dropped to 1.6 percent in 2013 from 3.8 percent in 2009, according to the Public Employment Relations Commission.
Not everyone is in favor of extending the cap in its current form, including some of the state’s public employee unions. The 2 percent limit hinders the ability of unions and towns to enter into balanced negotiations said Dominick Marino, president of the Professional Firefighters Association of New Jersey. He said the cap has hurt his members, who often start their careers with low pay. The union recognizes the economy is sluggish and sacrifices are needed, Marino said, adding that at a minimum, changes how the cap is calculated should be considered. Currently, the math provides for very few exceptions to the 2 percent ceiling.