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Media Advisory

Wednesday, October 13, 2010
Trenton, NJ

MUNICIPALITIES AND COUNTIES SUPPORT ACTION ON ARBITRATION REFORM

Tomorrow in Trenton, Mayor Jim Anzaldi of Clifton, President of the League of Municipalities, will lead 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 is scheduled for consideration in the Senate State Government Committee, in Committee Room 6 of the State House Annex, at 1:00 p.m., tomorrow. Joining Mayor Anzaldi will be Mayors Eldridge Hawkins, Jr. of Orange, John Ekdahl of Rumson and Ken Pringle of Belmar.

Prior to that hearing, the Mayors will join officials from the Association of Counties at a Press Conference, scheduled for

Time:         11:00 a.m.
Location:   On the Front Steps of the State House Annex
State Street, Trenton, NJ (Rain Location: Press Availability inside
State House Annex Lobby)

It has now been three months since the Governor signed the new 2% levy cap into law. The League had asked the Governor and the Legislature to delay action on the cap until after they had agreed on management reforms and mandates relief items that would make that cap workable.

Now is the time for progress. Going forward, the situation can only improve IF serious reforms are enacted and unfunded mandates are relieved or repealed. Attention to the Binding Interest Arbitration mandate should top the list of State priorities for meaningful property tax relief.

Binding interest arbitration is a state-mandated process for settling collective bargaining disputes between local governments and police and fire employee unions.

When a town or other public employer can’t reach a contract agreement with a union representing the civilian workers, it can impose its final offer. But in an impasse with a police or fire union, a third-party arbitrator is called in to decide the terms of the new contract.

Since 2000, the current binding arbitration process has resulted in reported salary schedule increases averaging nearly 4 percent per year. Only in the last six months have those average salary increases been reduced.

And those figures don’t represent the full cost. Salary steps based on years of service — which can amount to as much as $15,000 per officer — often are not considered by the interest arbitrator as a cost to the employer. As a result, a 4 percent increase to the salary schedule can cost an employer upwards of 10 percent, depending on the way the contract is structured.

Awards like this to police and fire personnel can put pressure on the governing body to give similar increases to other public employees. On the other hand, it can also result in layoffs or furloughs of other government workers to pay for the police and fire contract awards.

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.

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, in accord with an 86-page arbiter's report, 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."

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For further information contact: William G. Dressel, Jr., Executive Director at (609)695-3481, extension 122 or 609-915-9072.

 

 

 

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