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April 16, 2014

Re:       Update on Interest Arbitration Cap

Dear Mayor:

Tomorrow will be 3 weeks since the Governor conditionally vetoed and the State Senate immediately approved the bill extending the 2% cap on interest arbitration awards.  The League supports the Governor’s recommendations and Senate’s action to advance the interest arbitration reform.

Please contact Assembly Speaker Prieto and your Assembly representatives to urge them to return to Trenton and concur with the Governor’s conditional veto.

Local leaders need predictability in putting their budgets together, especially considering that in the overwhelming majority of municipal budgets the single largest expense is for Public Safety wages. The unnecessary delay of extending the Interest Arbitration cap adds uncertainty and unpredictability, and quick action is warranted. 

The League supports a permanent extension to this cap, and believes it should be linked directly to the property tax levy cap.    In the spirit of compromise, local leaders agreed to again sunset this provision, a compromise reflected in the Governor’s conditional veto which extends the interest arbitration cap until December 31, 2017.   

We all depend on the service of our police, firefighters and first responders, and greatly respect and admire their service.   This debate, however, is to how best to budget within our means, to comply with the 2% property tax levy cap and maintain a level playing field at the bargaining table.   The interest arbitration cap has been a successful tool in ensuring that the largest budget line-item, in most municipalities, remain within the 2% property tax levy as well as assisting local budget makers by providing predictability for future budgets.  

We thank you for your outreach on this issue and it has made a difference.  The Governor acted immediately to conditionally veto the original bill and the Senate, acting in a bipartisan manner, immediately concurred.    Editorial boards across the State have called for immediate action. 

We urge you to join us as we re-double our efforts to assure the immediate extension of the interest arbitration cap.    

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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