Are Democrats Dragging Their Feet on Arbitration Cap for Cops, Firefighters?

Republicans argue if interest arbitration cap is allowed to expire, salary increases won by public-safety employees could mushroom

Taxes are a perennial top issue for New Jersey voters, and public-opinion polls indicate they remain so this year with the governor’s office and the full state Legislature on the November ballot.

Yet the top Democrats in both the Assembly and Senate are continuing to say they have yet to decide if a limit on public-safety salary increases that local officials have called a key tool in the fight to contain New Jersey’s highest-in-the-nation property tax bills should be renewed before it is set to expire at the end of the year.

The Democrats’ reluctance to take a firm position on the future of what’s commonly known in Trenton as the interest-arbitration cap is drawing heat from the Legislature’s minority Republicans, who are trying to use the issue to get noticed by voters in a year where even the gubernatorial candidates are having a hard time generating much attention.

Call for action planned

The fate of the interest-arbitration cap is also a key concern for municipal and county government leaders from both parties, and they are now planning to gather on the steps of the State House in Trenton tomorrow to call on lawmakers to take action to renew the cap before its December 31 expiration date.

“We know that it works,” said Michael Darcy, executive director of the New Jersey State League of Municipalities, one of the groups set to participate in tomorrow’s news conference.

Right now, state law sets a 2 percent limit on the salary increases that police officers and professional firefighters can receive from arbitrators if they reach a contract impasse with their government employers and choose to go into binding arbitration. That limit went into effect in 2011 as part of a broader agenda that Gov. Chris Christie sought to enact in an effort to curb property-tax increases in the wake of the Great Recession and ensuing real-estate collapse. Christie, a Republican, and Democrats who control the Legislature, also put in place a 2 percent limit on overall property-tax increases as part of the same initiative.

But the two caps are completely separate as a matter of law, and importantly, they do not operate on the same timeline. While the broader cap on property-tax levy hikes was enacted as a permanent cap, the limit on interest-arbitration awards was instead given a sunset date. The interest-arbitration cap was renewed once before, after an initial sunset date was reached in 2014, and now it is set to expire once again, on December 31, 2017.

Christie and the cap

Christie has indicated he wants to extend the cap, and so has Lt. Gov. Kim Guadagno, who is running as the GOP’s nominee to succeed the term-limited governor. But Democratic gubernatorial candidate Phil Murphy has yet to indicate his position on extending the cap, providing some hope for the members of public-safety unions — who’ve also been forced by Christie and lawmakers to contribute more toward their health coverage in recent years — that the cap could eventually be cast aside.

Also clouding the issue is the pending submission of a final report on the cap’s effectiveness that is due to be released by a task force of experts that was impaneled by law to closely review the cap’s impact. The report, however, is due on the same date that the cap is set to expire, meaning there may be little time for lawmakers to closely review the task force’s recommendations before the limit is no longer in place.

Assembly Speaker Vince Prieto (D-Hudson) said in a statement yesterday that he wants to first review the findings of the task force before making a final decision on whether to renew the cap.

‘Policy and policy only’

“That report is due by December 31, and because I am approaching this issue responsibly and seriously, I will not make any judgements until I get those findings,” Prieto said. “For me, this is not about politics or rhetoric. This is about policy and policy only.”

For his part, Senate President Stephen Sweeney (D-Gloucester) is also indicating he’s yet to make a final call. Sweeney said in a statement that he’s awaiting the results of the November 7 gubernatorial election.

“We will have a new administration taking office very soon,” Sweeney said. “We will give deference to the new governor and discuss this issue after the election.”

Assembly Minority Leader Jon Bramnick (R-Union) speaks to reporters about property taxes during a news conference in the State House yesterday.
But Assembly Minority Leader Jon Bramnick (R-Union) suggested the Democrats’ reluctance to take a firm position on the fate of the arbitration cap before the election should be a cause for alarm among New Jersey voters. Their indecision comes at a time when the average New Jersey property tax bill is $8,549, and as federal Bureau of Labor Statistics data indicates, the annual mean wage for patrol officers in New Jersey last year was $87,490, with the figure rising to $128,000 for supervisors and detectives. For professional firefighters in New Jersey, the annual mean wage last year was $81,730 — $117,290 for supervisors. Meanwhile, the median household for New Jersey was $76,126 last year.

Bramnick said voters’ longstanding concerns about high taxes can be addressed this fall by shifting the power in the Legislature to Republicans, especially with recent polls indicating Murphy is way ahead in the gubernatorial race.

“The special interests in this state will absolutely gather together, and if you have one-party rule in this state, you will see an increase in property taxes, absolutely, no question about it,” Bramnick said.

Property-tax cap

Yet even if the arbitration cap is allowed to expire, that won’t mean that overall property tax bills will automatically rise by huge margins across New Jersey. That’s because the 2 percent limit on property tax increases will continue to be in place, and under the broader cap law, only voters can authorize a tax levy increase of more than 2 percent in a public referendum.

However, what local-government leaders say the arbitration-cap’s expiration could open the door to is a scenario that would see municipal and county leaders forced to cut other government services in order to cover increased public-safety salaries in the wake of an arbitration ruling that would award raises above 2 percent. In fact, the New Jersey Association of Counties warned in a recent news release that governments would be forced to “further reduce or even eliminate essential services, critical personnel, and long-overdue capital improvement projects.”

Officials from the League of Municipalities, meanwhile, are also warning that if the arbitration cap is allowed to expire while the permanent cap remains in place, it could lead to a host of future ballot questions, putting voters in the difficult position of having to choose between paying higher taxes or getting reduced services.

“When an arbitrator decides an award, there is no choice there, it’s a requirement,” Darcy said. “There would be true choice if the (arbitration) cap were still in place.”