Tag: arbitration cap

Casagrande: Arbitration Compromise Good for Taxpayers

Press Release – (Trenton, NJ) – Assistant Assembly Republican Leader Caroline Casagrande, R-Monmouth, today issued the statement below following the General Assembly’s passage of interest arbitration legislation, A-3424, for police and firefighters:

Caroline Casagrande

“The extension of the 2 percent arbitration cap will assist our municipalities in their efforts to contain costs on behalf of their residents and is a positive step forward. We can’t hold down taxes without holding down expenditures. I will continue to work diligently to pass other vital reforms, including legislation to prohibit cash payments to government workers at retirement for unused sick leave which will deliver the long term property tax relief constituents have been demanding.”

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Bramnick at arbitration cap rally: ‘Lower our taxes’

Source: NJBiz - Gov. Chris Christie called on Assembly Speaker Vincent Prieto (D-Secaucus) Monday morning to post a bill seeking to readopt a now-expired law that would cap interest arbitration awards for police and firefighters at 2 percent per year.

“Speaker of the Assembly, if you post this bill, believe me it will pass,” Christie said.

Jon Bramnick

Flanked by a bipartisan mix of municipal, county and state officials at a rally in Trenton, Christie said the cap had previously afforded municipalities the ability to keep property taxes down…

But as Assembly Minority Leader Jon Bramnick (R-Westfield) noted at the event, now is “not the time to stop the momentum.”

“Read our bipartisan lips,” Bramnick said. “Lower our taxes.”

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O’Scanlon blasts committee vote on arbitration award cap

Source: Philadelphia Inquirer -

New Jersey Democrats are pushing a proposal through the Legislature to extend a cap on pay raises for police and firefighter unions set to expire at the end of the month.

But Republicans, who have championed the 2 percent cap as a key tool in slowing the growth of property taxes, say the bill includes provisions that would render the 2010 law useless.

The cap applies to an increase in base salaries for police and firefighter unions that decide to enter arbitration.

The law sunsets on April 1. The bill advanced Monday by Assembly and Senate committees would extend the interest-arbitration cap through 2017. Savings achieved through increased employee contributions toward health premiums and reductions in force would go toward salaries, though raises would be limited to 3 percent in such cases.

Declan O'Scanlon

“This bill is a cap-killing bill masquerading as a cap extension,” Assemblyman Declan O’Scanlon (R-Monmouth), who sits on the body’s budget committee, said in a statement after the 8-2-2 vote.

Crucially, Republicans say, the bill would exempt contracts negotiated under the 2 percent cap since the law took effect.

“Since we have negotiated for three years under the 2 percent cap, and most contracts are for three or four years, there will be very few contracts that haven’t already been subject to the previous cap,” O’Scanlon said.

That means costs could outpace revenues, particularly on property taxes, he said.

The bill, which sponsored by Speaker Vincent Prieto (D., Hudson) and Senate President Stephen Sweeney (D., Gloucester), is scheduled for a vote Thursday before the full Assembly and Senate. Christie has said he wanted to make the existing law permanent.

Gov. Christie has said property taxes grew an average of 1.7 percent last year, down from an average of 7 percent in the 10 years before he took office. The interest-arbitration cap took effect at the same time as a 2 percent cap on property tax growth.

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Budget hearing testimony echoes call for O’Scanlon’s arbitration legislation

Source: Inquirer -

Dozens of interest groups lobbied legislators Wednesday at a Senate budget hearing in Burlington County to maintain or increase funding for their favorite programs next fiscal year, even as New Jersey makes a record payment toward its pension fund.

Among the most pressing issues addressed was the scheduled April 1 expiration of New Jersey’s interest-arbitration cap, which sets a 2 percent limit on annual raises for police and firefighters.

Declan O'Scanlon

Gov. Christie and other supporters of the cap say it has helped slow property-tax growth. Assemblyman Declan O’Scanlon Jr. (R., Monmouth) said he would introduce legislation Thursday that would make the cap permanent.

“Unless the Legislature acts to extend the April 1 sunset, our taxpayers will lose essential protections,” Stone Harbor Mayor Suzanne Walters, who is also president of the New Jersey League of Municipalities, told the Senate Budget and Appropriations Committee on Wednesday at the Burlington County Institute of Technology.

The arbitration law took effect in 2011. For contracts completed between that time and September 2013, average raises were 1.86 percent, the lowest in 20 years, according to O’Scanlon, a member of a task force that studied the impact of the law.

The Senate and Assembly budget committees are holding a series of public hearings throughout the state as they prepare to take up Christie’s proposed fiscal 2015 budget. The state constitution requires the Legislature to pass a balanced budget by July 1.

Christie’s $34.4 billion budget calls for a record $2.25 billion payment to the pension system. The governor says 94 percent of new spending in his budget is allocated toward pension, health benefits, and debt-service costs.

Other interest groups attending Wednesday’s hearing included retailers who supported Christie’s proposal to require out-of-state online retailers to collect sales tax. The budget includes $28 million in new revenue from closing the loophole.

Brick-and-mortar retailers already required to collect the state’s 7 percent sales tax suffer a competitive disadvantage to online retailers, said John Holub, president of the New Jersey Retail Merchants Association.

Christie first announced his support for the controversial tax in 2012, when online retail giant Amazon said it would build two distribution centers in the state, bring 1,500 jobs, and start collecting sales tax from New Jersey residents in July 2013.

That has placed Christie, a potential contender for the GOP presidential nomination in 2016, at odds with other prominent Republicans, who consider the measure a new tax. Christie, by contrast, describes the issue as a matter of tax fairness.

A 2011 Rutgers University study projected that enforcement of the tax would generate about $310 million in revenue for New Jersey in 2015.

At the federal level, the Democratic-controlled Senate passed the Marketplace Fairness Act in 2013. The Republican-controlled House hasn’t taken up the bill. In December, the U.S. Supreme Court declined to hear a challenge to a New York law that enforces the tax, clearing the way for other states to follow suit.

“This is not a new tax. It’s not an increase in tax. A sale is a sale,” Holub told the budget panel Wednesday. “We’re simply asking for a level playing field.”

State Sen. Samuel Thompson (R., Middlesex), a budget committee member, supported the idea. “It’s only right that everybody pays the same amount for the same goods,” he said.

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DeCroce: Property Tax and Arbitration Caps ‘Perfect Together’

Press Release – Assemblywoman BettyLou DeCroce, lauding a report that shows property tax growth in 2013 was held to 1.7 percent, the second lowest in three years, today said the successful property tax cap is in danger of collapsing unless the state’s interest arbitration law is made permanent.

The governor’s office reported today that 2013 property tax data shows New Jersey experienced its third year of the lowest property tax growth in two decades. The low increases coincide with a two percent arbitration cap that took effect on January 1, 2011.

BettyLou DeCroce

“It’s no coincidence that property taxes have increased at their lowest rate in two decades at the same time that we implemented interest arbitration reform,” said DeCroce, R-Morris, Essex and Passaic. “In the years prior to the property tax and arbitration caps, property taxes were skyrocketing. The bipartisan property tax reforms we passed are working. It would be reckless and irresponsible to allow the arbitration law to sunset.”

Assembly Republican Budget Officer Declan O’Scanlon today announced a proposal to make the statute permanent. He was a primary sponsor of the original bill signed in 2010 and has served on the task force created to study and evaluate the effectiveness of the arbitration cap.

The Public Employment Relations Commission reports that the average raise awarded by arbitrators after the cap was in place dropped to 1.6 percent in 2013 from 3.8 percent in 2009. It is set to expire on April 1.

The average property tax increase last year was 1.7 percent. In 2012, it was 1.6 percent, down from 2.4 percent in 2011, a sharp contrast with 2004 through 2006, when rates increased at least 7 percent each year.

“Without this vital cost saving law, the property tax cap will become moot. Taxpayers will pay the price if the Legislature fails to act,” said DeCroce. “We have only one voting session scheduled before the law expires. Making interest arbitration reform permanent should be our top priority.”

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Source: Assembly Republican Press Release -

O’Scanlon to Introduce Permanent extension of interest arbitration reform

Republican Assemblyman Declan O’Scanlon warned of dire consequences if the Legislature fails to permanently extend interest arbitration reform set to sunset on
April 1st.

Declan O'Scanlon

“It will be a disaster at the local level if this doesn’t get done,” said O’Scanlon, R-Monmouth, who also serves as the Assembly Republican Budget Officer. “The cap on arbitration awards was a crucial part of our 2010 reforms and was the single greatest tool ever enacted to bring under control the never-ending, dramatic rise in property taxes.

“With only 19 days remaining before the law sunsets, I really hope politics doesn’t get in the middle of this.  The consequences of our failure to get this done will be stark indeed,” commented O’Scanlon. “Pressure on property taxes will rise dramatically, services will erode and layoffs of even more police and fire personnel will be inevitable.

“We would be turning the clock back on a critical reform and essentially delivering a gut punch to the hard-working families of New Jersey struggling to pay their property taxes. Taxpayers have a right to expect that their elected officials will be honest and have the guts to make the tough choices and do the right thing,” explained O’Scanlon. “This isn’t rocket science – it’s basic math. Without the arbitration award cap, the property tax cap will
eventually fail.  It’s that simple.”

O’Scanlon announced he will introduce legislation helping homeowners struggling to pay their property taxes – and local officials trying to provide efficient, sustainable government – by making the law permanent.  He was a primary sponsor of the original bill signed in 2010 and has served on the task force created to study and evaluate the effectiveness of the arbitration cap.

From January 2011, when the law took effect, to September 2013, average raises in contracts, whether through arbitration or negotiations, were 1.86 percent — the lowest in at least 20 years.  And property taxes went up at the lowest rate in two decades.

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O’Scanlon on need to continue the 2% cap on arbitration awards set to expire on April 1

Source: The Star-Ledger -

Mayors say a group with an obscure and achingly bureaucratic name has been the most important tool in slowing the growth of New Jersey’s property taxes, the highest in the nation.

For the last three years, arbitrators who decide contract disputes between towns and their police and fire unions — known collectively as the Interest Arbitration Task Force — have been limited to increasing the workers’ salaries by just 2 percent.

Declan O'Scanlon


“It will be a disaster for the operation of efficient government at the local level if it doesn’t get done,” O’Scanlon said. “The pressure on property taxes and the efficient delivery of local services will have a huge negative impact on taxpayers if it doesn’t get done.”


But if the Legislature doesn’t act by April 1, that limit will expire. That would leave towns constrained by a 2 percent cap in overall tax increases but with less control over how much to pay police officers and firemen.

“We’re playing a little Russian roulette here,” said Bill Dressel, executive director of the League of Municipalities. “We could see arbitration awards potentially exceed the 2 percent cap that would put a stranglehold on municipalities to the extent that they would have to cut services.”

Gov. Chris Christie in his January State of the State speech called on the Legislature to make the cap permanent.

The cap on the awards was a crucial part of the 2010 “tool kit” that Christie, a Republican, pushed and the Democrat-controlled Legislature approved.

Mayors say the cap has helped immensely in reining in the growth of property taxes, even when they are able to reach agreement with their unions without needing to go into arbitration.

From January 2011, when the law took effect, to September 2013, average raises in contracts, whether through arbitration or negotiations, were 1.86 percent — the lowest in at least 20 years.

And while property taxes continue to rise, in 2011 and 2012 they went up at the lowest rate in two decades.

Mayor John Ekdahl of Rumson, a Republican, said his town was able to negotiate an average annual raise for police of 1.5 percent without even going into arbitration. But, Ekdahl said, “the so-called threat of the 2 percent is what really sort of made it happen.”

“It definitely made it easier to reach an agreement,” he added.

The 2010 law set up an Interest Arbitration Task Force made up of appointees from the governor, lawmakers and union officials. Within the next couple of weeks, the panel is expected to release a report with recommendations on what to do.

Dominick Marino, president of the Professional Fire Fighters Association of New Jersey and a member of the task force, said he expected the report to be “one sided” and that he and other union officials might not endorse it.

“We have been — to say the least — arguing back and forth on how to proceed,” Marino said. “Obviously everyone knows we’re under the gun for April 1.”

Marino said he would like to let the 2 percent cap expire because it’s been a “detrimental tool to the workforce.”

“There’s no place to bargain,” he said. “There’s no place to negotiate. There’s this number hanging out there and there’s no room to work with. (Arbitrators) are hard pressed to go over that number, even if they wanted to. So it kind of hamstrings the entire process.”

Assemblyman Declan O’Scanlon (R-Monmouth), another task force member, said the extension “has to get done.”

“It will be a disaster for the operation of efficient government at the local level if it doesn’t get done,” O’Scanlon said. “The pressure on property taxes and the efficient delivery of local services will have a huge negative impact on taxpayers if it doesn’t get done.”

Kevin Roberts, a spokesman for Christie, said, “You’d have to ask the Legislature about their commitment to meeting the governor’s call to renew the cap that is controlling costs and delivering property tax relief to local taxpayers.”

Assembly Speaker Vincent Prieto (D-Hudson) and Senate President Stephen Sweeney (D-Gloucester) declined to comment.

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