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March 17, 2014

Re:       URGENT LEGISLATIVE ALERT
Extension of 2% Cap on Interest Arbitration Awards
Only 2 Voting Sessions Left

Dear Mayor,

With only two voting session left before the 2% cap on interest arbitration awards expires, it is imperative that your State Legislators hear from you on this important issue.  Please call your State Legislators, without delay, and ask them to sponsor or co-sponsor legislation making the 2% Interest Arbitration cap permanent.

The interest arbitration cap has taken a playing field that was weighted heavily to the benefit of the unions and leveled it so that collective bargaining was once again a “give and take” between the parties.  There are many examples where municipalities negotiated contracts with significant savings because the unions recognized that if they went to arbitration they would only receive a 2% increase.  Steps were lengthened, sick leave incentives were reduced or eliminated, and vacation time was reduced, providing savings to taxpayers.

For example, one municipality gave raises ranging from 1.8% to 2% over a four year period.  But because of the give backs the total contract package increased by just 0.23%.  Another municipality was able to establish a second salary guide that greatly reduces the level of compensation for new hires at each step, saving taxpayers in that municipality thousands of dollars per employee throughout their careers.  Yet, another municipality settled a contract with 0% increases all four years while increasing the step guide from 5 steps to 13 steps.

Absent further action by the Legislature, any contract that expires on or after April 1, 2014, will not be subject to the 2% awards cap.  Without those limits, arbitrators will be able to impose awards similar to those issued prior to the implementation of the 2% hard cap.  As such, municipalities would still have to comply with the tax levy cap and the appropriations cap without the aid of the 2% hard cap.  Such awards would immediately threaten funding for all other municipal services. And, in the not-too-distant future, such awards could force local budget makers to reduce public safety staffing levels, as fewer local employees steadily take home higher percentages of local funds.

Clearly, the arbitration cap has done more to contain property taxes than other enacted “tool kit” reforms.   Please contact your State Senator and Assembly representatives today urging them to support a permanent extension of the 2% cap on arbitration awards.  The expiration date is only 2 weeks away.   In addition, please contact your local media to explain that this reform needs to be enacted as soon as possible.

If you have any questions or need additional information please contact Lori Buckelew at 609-695-3481, ext. 112 or lbuckelew@njslom.com.

Very truly yours,

William G. Dressel, Jr.
Executive Director

 

 

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