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February 7, 2014

Re: Urgent Legislative Action Needed on Arbitration Cap

Dear Mayor:

As indicated in our January 21 letter (, unless the Legislature acts to extend the April 1 ‘sunset’ of the limitation on  arbitrator awards for police and fire personnel salaries, steps and longevity payments to an average of 2 percent annually over the life of a contract, our taxpayers will lose that essential protection.

That expiration date is only 54 days away, and we have yet to see the introduction of a bill that will meet the needs of our property taxpayers.

Leadership in both houses has acknowledged that the sunset should not expire.  We have received bi-partisan support from key legislatures.  However, it is essential that we have broad base support in order to have legislation adopted prior to April 1.

As Senate President Sweeney said in 2010, as the arbitration reform bill was moving through the Legislature, “Reforming the arbitration system is essential if communities are going to be able to live under the property tax cap. For too long, the system has been tilted in favor of the public unions and arbitrators have enjoyed too free of a hand in crafting contracts that did not even have to consider a town's ability to pay. This compromise legislation will ensure that taxpayers are protected and that workers are treated fairly.”  And as Assemblyman O’Scanlon said recently in the February League Magazine, “It doesn’t take more than an understanding of grade school mathematics.  If your budget is constrained, in this case by tax caps, while at the same time your largest budget line item (labor costs) is ordered to increase by an amount greater than your revenue increase, at some point you will go bankrupt.  It’s that simple”.

Please contact your State Legislators, without delay, and ask them to sponsor or co-sponsor legislation. Please adopt the sample resolution, available at as a pdf or at as word, urging the swift passage of legislation to permanently extend the cap on arbitration awards. 

If you have any questions, contact Senior Legislative Analyst Lori Buckelew at 609-695-3481, ext. 112 or

Very truly yours,

Wilda Diaz                                                           
Chair, Management Reform Committee
Mayor, Perth Amboy

Suzanne Walters, President
NJLM, Mayor, Stone Harbor



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