New Jersey Looks to Cap Fire, Police Pay Raises

The new bill extends the two percent cap on salary increases in arbitration awards through the end of 2017.


June 17--TRENTON -- Rules that limit the size of raises an arbitrator can award if a New Jersey municipality's contract negotiations with police officers or firefighters stall are on the cusp of being reinstated.

A 2 percent cap on arbitration awards that was put in place in 2010, to line up with the cap imposed that year on property tax levy increases, expired in April after Gov. Chris Christie vetoed the version of the extension that has been approved by the Legislature. Assembly Speaker Vincent Prieto, D-Hudson, and Christie finally struck a compromise on the concept last week.

The new bill extends the cap on salary increases in arbitration awards through the end of 2017 but allows the awards to be compounded for each year of the contract. Time periods from the original law would be doubled -- arbitrators would have 90 days to make a decision, a losing party would have 14 days to appeal and the Public Employment Relations Commission would have 60 days to rule on appeals.

"We got for them compounding that was able to be able to grow by another 2 percent of whatever that contract was during that year, as municipalities are offered compounding in their own budget-wise for their tax levy," Prieto said. "So I think it was a fair compromise for everybody."

"It couldn't come at a more opportune time," said William Dressel Jr., executive director of the State League of Municipalities. "Most of the contracts expire in December, and per the law mayors have got to begin discussions with the unions over the contracts this month. So this is a tremendous signal that the Legislature is serious about the spending cap. That will go a long way in saving property taxes."

The bill was approved Monday by the Assembly in a 78-0 vote and is expected to be approved Thursday by the Senate.

New Jersey State Policemen's Benevolent Association executive vice president Keith Dunn called the proposal "unnecessary interference in the fair and open collective bargaining process."

"The passage today of a bill to extend the cap on arbitration awards is merely a continuation of the myth that arbitration is a leading cause of tax increases. There has not been a shred of any data to show that this cap has caused anyone's taxes to go down or that any arbitration has led to taxes going up," Dunn said.

Lawmakers credited Prieto for reaching a compromise with Christie.

"It's not often enough that any one of us in this chamber gets to stand up and say, 'This is how government ought to work,' but this is one of those instances," said Assemblyman Declan O'Scanlon, R-Monmouth.

Michael Symons: 609-984-4336; msymons@app.com

Copyright 2014 - Asbury Park Press, N.J.