Senate President Stephen Sweeney, D-3rd of West Deptford, and Assembly Speaker Vincent Prieto, D-32nd of Secaucus, introduced identical bills Monday to extend the 2 percent cap on arbitrator awards until Dec. 31, 2017, while also giving arbitrators some leeway to grant slightly larger increases accounting for larger employee contributions toward health insurance benefits or savings yielded through layoffs or other forced reductions.
The bills also extend the deadlines involving arbitrator decisions and appeals, increase the pay arbitrators can receive from a maximum $7,500 to $10,000, and change the initial selection process to allow both unions and municipalities to first submit names from a panel that they may agree on rather than going directly to a random selection.
Both bills were advanced in the afternoon by the Assembly Budget Committee and the Senate Government, Wagering, Tourism and Historic Preservation Committee, clearing them for votes before the full chambers.
The Senate and Assembly have scheduled voting sessions for Thursday.
The cap, which was created in 2010 at the behest of Gov. Chris Christie, is scheduled to expire April 1.
Without it, local mayors claim their towns and taxpayers again will be at the mercy of arbitrators who are called on to settle contract disputes involving police and firefighter unions.
The cap prevents those arbitrators from awarding base salary increases greater than 2 percent annually.
Mayors and Christie have said the limit has provided crucial protection that has helped keep New Jersey’s notoriously high property taxes from growing significantly during the past four years, and have called on the Democratic-controlled Legislature to extend the cap and make it permanent.
A report released last week by a state task force created to study the arbitration cap found that it was successful in staving off large awards. However, the task force was split on whether it should be made permanent, with some union members appointed to the panel arguing that it has impacted arbitration awards as well as negotiations prior to contract disputes.
Sweeney’s and Prieto’s bills extend the cap, but don’t make it permanent. They also require arbitrators to consider employee contributions toward health benefits as well as savings from a reduction in force when computing base salary increases. In those instances, arbitrators are permitted to award pay hikes up to 3 percent.
Prieto said the changes attempt to be fair to the needs of municipalities to control spending and to compensation for police officers and firefighters.
“We’re trying to strike a balance to keep property taxes low but be able to compensate our firefighters and our police — basically they put their life on the line every day — to make sure that they’re properly compensated and we make sure that there’s that happy medium,” Prieto said in a statement.
Representatives from the New Jersey State League of Municipalities and the New Jersey Association of Counties expressed reservations about some of the proposed changes, but they still supported the bills during the committee hearings.
“The cap has really leveled the playing field and allowed us to provide services in a more cost-effective manner,” said John Donnadio, executive director for the counties association.
The measure cleared the Assembly Budget Committee by a 9-2 vote. Troy Singleton, D-7th of Palmyra, supported it, but Assemblyman Chris Brown, R-8th of Evesham, abstained.
“This is not about the services (police and firefighters) provide; it’s about what municipalities can live with,” Brown said Monday, adding that there are still some loose ends with the measure.
The Senate panel released its bill by a 5-0 vote.