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October 14, 2010

Re: Trenton Press Conference/Senate Committee Hearing Highlight Arbitration Reform Efforts

Dear Mayor:

League President, Mayor Jim Anzaldi of Clifton, led a delegation of Mayors to present testimony in favor of S-2310. The bill, introduced by State Senator Mike Doherty, is designed to reform binding interest arbitration and implement a reasonable limit on future local government employee compensation costs. The bill was scheduled for discussion (but not a vote) in the Senate State Government Committee. Joining Mayor Anzaldi were Mayors Eldridge Hawkins, Jr. of Orange, John Ekdahl of Rumson and Ken Pringle of Belmar.

Prior to that hearing, the Mayors joined Somerset County Freeholder Peter Palmer, President of the New Jersey Association of Counties at a Press Conference, on the steps of the State House Annex. Mayor Anzaldi reminded the Senators and the Press that New Jersey taxpayers pay the highest median property tax in the country and New Jersey police officers and firefighters are among the highest paid in the country. This is no coincidence. Binding interest arbitration is the primary reason for this never-ending rise in the cost of government.

Mayors urging action, see caption below photo
Left to Right - Peter Palmer, Somerset County Freeholder, John Ekdahl, Mayor of Rumson,
League President and Mayor of Clifton, Jim Anzaldi, Eldridge Hawkins, Jr, Mayor of Orange and Kenneth Pringle, Mayor of Belmar

Personnel and related costs account for the majority of municipal spending, and have increased at faster rates than all other local government costs. The New Jersey League of Municipalities encourages the governor and Legislature to make binding interest arbitration reform the hammer in the cost control tool kit.

Back in July, following the passage of the new 2 percent property tax levy cap, Rumson was one of the first towns to receive an Arbitrators award. The award calls for 3.5, 3.5 and 3.25-percent pay increases retroactive to when the union’s contract expired at the end of 2006. For 2010, officers would get increases of 3 percent, and 2.75-percent next year.

At the time, Mayor John Ekdahl stated that the award created a “privileged class” of employees.  Rumson has appealed the award to the Public Employment Relations Commission (PERC).

Then last week, the Borough of Belmar learned that it will have to pay its police officers a 15 percent increase over a five-year period that dates back to 2008, despite the 2 percent cap.

"This equates to a 3 percent increase per year, not withstanding the 2 percent cap we now have to meet," said Mayor Kenneth Pringle, who is on record supporting the cap. "I saw it as a way to force municipalities to share services."

"I don't know what we are going to do," Mayor Pringle continued. "We can no longer afford to maintain the size of our Police Department."

And Mayor Hawkins emphasized that, “In this economy, with this cap, we can no longer afford the kind of awards routinely given by independent arbitrators.”

Personnel and related costs account for the majority of municipal spending, and have increased at faster rates than all other local government costs. The New Jersey League of Municipalities encourages the governor and Legislature to make binding interest arbitration reform the hammer in the cost control tool kit.

Senator Doherty’s bill, S-2310, among other improvement, would:

  • Implement the Governor’s “Tool Kit” proposals for public employer – public employee arbitration.
  • The proposal imposes a 2.0 percent cap on interest arbitration awards and collective negotiations agreements. 
  • The new language specifically prohibits any mediator, fact finder or police/fire interest arbitrator from recommending or awarding any settlement that would exceed by more than 2.0 percent the aggregate amount expended by the public employer on economic issues for the members of the affected employee organization in the immediately preceding employment year. 
  • The proposal further provides that no public employer or public employee organization can enter into any agreement on economic issues that exceed the 2.0 percent cap.
  • Economic issues are defined as
    • wages, salaries, hours in relation to earnings, and
    • other forms of compensation, such as
      • paid vacation,
      • paid holidays,
      • health and medical insurance, and
      • other economic benefits accruing to the employees represented by the affected employee organization.

We want to thank Mayors Anzaldi, Ekdahl, Hawkins and Pringle for coming to Trenton to advocate for essential reforms. We salute Senator Doherty for his leadership on this. We urge you to contact your own Legislators in support of S-2310. We will keep of any further developments. For more information, contact Lori Buckelew at 609-695-3481, ext. 112, or Jon Moran at 609-695-3481, ext. 121.

Testimony by League President - Mayor James Anzaldi

Very truly yours,

 

William G. Dressel, Jr.
Executive Director

 

 

 

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