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March 27, 2014

Re:       Arbitration Cap Reform Developments

Dear Mayor:

We have some positive news to report on interest arbitration but our work is not done yet. 

Earlier today, S-1869/A-3067, which extends the arbitration cap to December 31, 2017 but had a number of serious issues, which would undermine the effectiveness of the cap (see our March 25 Dear Mayor’s letter), passed both houses.  In the Senate the vote was 28 to 7 and in the Assembly the vote was 47 to 23, with three members abstaining.

We want to express our gratitude to Assemblyman Declan O’Scanlon, who made a motion to advance the needed amendments. Sadly, that motion failed, being tabled on a vote of 41 to 31. We would also thank all Legislators in both Houses who supported our efforts to amend the bill to provide real relief to property taxpayers.

Later in the day, the bill was conditionally vetoed by Governor Christie.  The State Senate then accepted and approved the Governor’s recommendations.  

In the Governor’s veto message he stated “Regrettably, the bill in its present form would weaken the cap on arbitration awards by imprudently permitting salary increases in excess of 2% under certain circumstances. These proposed exceptions to the 2% limitation will necessarily impact the ability to provide other necessary municipal services while adhering to the overall 2% property tax levy cap.”

The Governor’s conditional veto does the following:

  • Removes the “one bite at the apple” language
  • Extends the deadline from April 1, 2014 to December 31, 2017
  • Removes the entire section of the bill, which included in the definition of base salary the savings the employer realized due to the employee’s chapter 78 health benefits contribution and any savings from the reduction in force.
  • Removes the ability of an arbitrator to increase salary awards up to 3% due to the savings of health benefits contributions and reduction in force.
  • Keeps the random selection of arbitrators on the first business day following the receipt of an interest arbitration petition.
  • Changes the language on the mandatory mediation upon the filing of the petition for arbitration to make the initial meeting a mediation session to effect a voluntary resolution of impasse.  It also removes the prohibition to begin the arbitration process for 14 days following that initial meeting.
  • Keeps the Task Force and requires the final report due on or before December 31, 2017.
  • The changes that were recommended in the Interest Arbitration report by both parties – 90 calendar days for arbitration decision, 14 calendar days for an appeal, 60 calendar days for a decision of an appeal, and arbitrator salary increase remain in the bill.

We want to thank the Governor and Senate President Sweeney for their leadership on this issue as well as the full Senate for acting swiftly on this important time sensitive issue. 

Although today’s developments were certainly good news, the General Assembly must also consider the Governor’s conditional veto. Even though we are optimistic that they will return to Trenton to vote on the measure before the April 1st deadline, please contact your Assembly representatives as soon as possible to urge them to concur with the Governor’s conditional veto as time is of the essence.

Questions on this legislation can be directed to either Lori Buckelew at 609-695-3481 or  x112 or Mike Cerra at 609-695-3481 x120 or

Very truly yours,

William G. Dressel, Jr.
Executive Director


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