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New Jersey League of Municipalities
Media Advisory

April 14, 2014

Trenton, NJ


The interest arbitration cap has proven to be an essential tool for local budget makers.  It has helped local budget keep a lid on property taxes and allowed local governments to govern within the 2% levy cap.    That interest arbitration cap passed with bipartisan sponsorship and support and continues to enjoy backing from both sides of aisle.   

It has been over two 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. 

Unless the cap is reinstatedarbitrators will be able to impose awards, for all future expiring contracts, similar to those issued prior to the implementation of the 2% cap.  Such excessive awards could immediately threaten funding for all other municipal services. And, in the not-too-distant future, such awards could force local budget makers to reduce public safety staffing levels, as fewer local employees steadily take home higher percentages of local funds.

League President Suzanne M. Walters, Mayor of Stone Harbor, offered the following comment,

“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 will force local budget makers to make deep cuts in services.    The Interest Arbitration cap is about budgeting within our means, keeping a control on local taxes and providing a level playing field at the bargaining table.     We call on the Assembly to return to Trenton as soon as possible and approve the extension of the interest arbitration cap.”


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For further information contact: Michael F. Cerra, Director of Government Affairs at (609) 695-3481, extension 120



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