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New Jersey Democrats , including Phil Murphy Reject  2% Police and Fire Arbitration Cap Dooming taxpayers to Huge Increases in Property taxes

Ridgewood Police

September 30,2017
the staff of the Ridgewood blog

Trenton NJ, The  2% cap on the raises police and fire unions can win in arbitration saved property taxpayers nearly $3 billion and should be renewed before it expires in December, but Top Democrats in New Jersey including Phil Murphy, the party’s nominee for governor quickly rejected  the idea .

A report released on Thursday concluded the law limiting the raises that police and fire unions can win in arbitration should be renewed in an effort to keep property taxes in check.

From the executive summary …. in order to enable public employers to restrain increased costs within the 2% tax levy cap, public employers needed a tool to restrain increases to police and fire salaries, especially when labor disputes are submitted to interest arbitration. The data reviewed by the Task Force confirms that the 2% cap has provided that tool. Since the inception of the law, the average annual base salary increase provided in interest arbitration awards subject to the 2% cap is 1.85%. Even in voluntary settlements to which the 2% cap does not apply, the data confirms that the cap law has had a profound effect.

Indeed, the data shows that for interest arbitration cases subject to the 2% cap settled before an interest arbitration award was issued, the average annual increase to base salary was 1.80%. These numbers are a stark contrast to the average annual increases that were reported to PERC prior to the effective date of the 2010 amendments.2 Not surprisingly, with the right reforms in place, the rate of property tax growth in New Jersey has declined significantly.

While the cap law significantly reduced the growth of labor costs, the Governor Appointees have not uncovered any evidence that these reductions have negatively impacted crime rates or the ability of public employers to recruit qualified candidates for police and fire positions. In summary, the Governor Appointees conclude that the 2010 and 2014 amendments to interest arbitration have effectively addressed the concerns that were at the heart of this bi-partisan legislation. Accordingly, its recommendations set forth herein include the permanent continuation of the most critical elements of those amendments – namely, the procedural changes requiring expeditious resolution of all interest arbitration proceedings and the 2% cap – to ensure that the progress made over the last five years is not lost. ( )