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(TRENTON) — Senate President Stephen M. Sweeney and Assembly Speaker Sheila Y. Oliver on Tuesday announced an agreement on a plan to cap salary arbitration awards at 2 percent for at least the next three years.

“While it may have taken longer than anyone would have preferred, talking out issues and carefully crafting policy that will protect both taxpayers and employees was the right course of action,” said Sweeney (D-Gloucester/Cumberland/Salem). “Reform that can speak for itself is always preferable to plans that just follow the sound bites.”

“What New Jersey taxpayers want and need is reform that both controls property taxes and treats fairly the brave men and women who protect our safety and our lives,” said Oliver (D-Essex/Passaic). “We’ve built a strong consensus around a responsible plan that will help taxpayers and protect the rights of police and firefighters. It’s now time for everyone to finally put the theatrics aside and join us in doing what’s best for New Jersey.”

The plan was endorsed by key mayors.

“For mayors, our concern has always been that arbitration must be narrowly tailored to the requirements of the new two-percent cap,” said Lambertville Mayor David DelVecchio, former president of the League of Municipalities and incoming president of the state Conference of Mayors. “This proposal will still allow arbitrators to be creative in how they decide cases, but require them to take local fiscal concerns into account and always work within the cap. It’s a good deal for local officials, public employees and, most importantly, property taxpayers.”

“If municipal officials are to be held to a 2 percent cap, then so should arbitrators,” said Buena Vista Mayor Chuck Chiarello. “Mayors and councils who already are trying to work their budgets within the constraints of the cap should not see their efforts blown-up by excessive arbitrator awards. This plan will help protect essential services — and essential employees — from being put on the chopping block, and that’s a good thing for property taxpayers.”

The legislation would:

  • Impose an average 2 percent cap on salary increases for all police and firefighter arbitration awards;
  • Sunset the cap in three years — the average length of police and firefighter contracts — to allow the state to gauge its effectiveness;
  • Only affect interest arbitration, not collective bargaining;
  • Require pay for longevity, length of service, salary increments and other similar compensation to be included in the 2 percent cap;
  • Require all contracts that expire in the three-year window to adhere to the cap. This will prevent the purposeful stalling of contract negotiations;
  • Change the process for selecting an arbitrator for interest arbitration to ensure a more varied and impartial group of arbitrators makes decisions;
  • Change the process by which judgments are appealed and speed up the timeframes under which arbitration must be resolved; and
  • Require arbitrators to meet stringent professional responsibility, impartiality and ethics guidelines.

The Legislature has advanced more than 20 property tax reform bills this year, including many in Gov. Chris Christie’s so-called tool kit. The legislative leaders stressed that lawmakers are continuing to work toward reforming the state’s civil service system and other issues such as local government consolidation and shared services.

“We will continue pushing forward with our reform agenda, but unfortunately nothing will undo the damage from the cuts in state aid to schools and municipalities and the decision to eliminate property tax rebates this year,” Oliver said. “Those decisions are driving up property taxes throughout our state, but we are committed to long-term reforms that will especially benefit working class New Jerseyans.”

“With these reforms, we can begin to put the final pieces into the tool kit,” said Sweeney. “When the property tax cap was signed, we said we would get municipal officials the tools they would need to make it work, and we have delivered on that promise. Local officials must do their part by continuing to make tough decisions, to share services and to do right by their taxpayers.”