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June 24, 2014

Re: Governor Signs Extension of Interest Arbitration Cap

Dear Mayor:

This afternoon the Governor signed A-3424, which will reinstate the 2% cap on interest arbitration awards and help provide needed relief for our taxpayers, into law.  The law takes effect immediately and is retroactive to April 2, 2014.  The extension of the cap was the League’s top legislative priority for the first half of 2014.

The interest arbitration cap has proven to be an important tool in curbing escalating property taxes, and the extension of the cap will assure immediate tax relief.   The interest arbitration cap allows for a level-playing field between municipalities and collective bargaining units. 

The law:

  • Extends the 2% hard cap on interest arbitration awards to December 31, 2017;
  • Removes the “one bite at the apple” provision.  As a result any contract that goes before an arbitrator will be subject to the hard 2% cap;
  • Changes the calculation of the 2% cap from the aggregate amount to compounding at the end of each agreement year;
  • Increases the time for the arbitrator to render a decision in the case from 45 days to 90 days;
  • Requires the arbitrator to conduct an initial meeting as a mediation session to effect a voluntary resolution of the impasse;
  • Extends the time for an aggrieved party to file a notice of appeal of the arbitrator’s decision from 7 days to 14 days;
  • Increases the time frame for PERC to render its decision in an appeal of an arbitration award from 30 days to 60 days;
  • Increases the maximum pay for arbitrators from $7,500 to $10,000;
  • Extends the reporting requirements of the Police and Fire Public Interest Arbitration Impact Task Force to December 31, 2017.

We all depend on the service of our police, firefighters and first responders, and greatly respect and admire their service.  But we also respect and admire the service of all public employees, and a failure to extend the cap on interest arbitration would have force local budget makers to make deep cuts in services.

The League expresses its deepest appreciation to Governor Christie for signing the bill as well as Senate President Sweeney, Assembly Speaker Prieto, Assembly Republican Leader Bramnick, Assemblyman O’Scanlon, Senate Republican Leader Kean, the State Senate and Assembly for the passage of the bill.

I would also like to thank you for your outreach to your Senators and Assembly representatives on this important issue.  The bipartisan support for this legislation at the municipal and the county level was a significant factor in its passage.

We would also like to thank those who participated in the press conference on the State House steps and come before the committees to testify - League President and Stone Harbor Mayor Suzanne Walters, League 1st Vice President and Eatontown Mayor Gerald Tarantolo, League Management Reform Chair and Perth Amboy Mayor Wilda Diaz, Fair Haven Mayor Ben Lucarelli, Woodland Park Mayor Keith Kazmark, Elmwood Park Mayor Richard Mola, Fair Haven Council President Jonathan Peters, Ewing Township Administrator Jim McManimon, Pequannock Township Administrator and Chief Financial Officer David Hollberg, President of the Government Finance Officers Association and Millburn Chief Finance Officer Jason Gabloff, South Brunswick Chief Financial Officer Joe Monzo,  League Labor Counsel Joe Hannon, New Jersey Urban Mayors’ Association, the Government Finance Officers Association of New Jersey, the New Jersey Municipal Managers Association and New Jersey Association of Counties.

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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