NJ Says Police/Fire Arbitration Cap Saved Taxpayers $500M — Will They Get Rid of It?
TRENTON — Half of a state task force set off a whole bunch of debate Thursday when, unexpectedly early, it released a report that calls for continuing a cap on the salary increases an arbitrator can award to police officers and firefighters.
The report by Gov. Chris Christie’s appointees to the task force estimates the arbitration cap has saved taxpayers $531 million since 2011 by lowering salary increases. They say the cap should be renewed indefinitely before it expires Dec. 31.
Police and fire officials make up half the task force, appointed to the panel by legislative leaders, but their input wasn’t included. They had asked at a Monday meeting for additional information to be included and voted against releasing the report prepared by administration appointees.
Despite the 4-4 deadlock, the report was made public Thursday, first by panelist Assemblyman Declan O’Scanlon, R-Monmouth, and then by Christie’s office.
O’Scanlon said the broader 2 percent property tax cap can’t work if limits on arbitrators are allowed to expire.
“The effect would first be a reduction in services. But then you’d have an evisceration of the tax cap,” O’Scanlon said, as officials accommodate first-responder raises that exceed the 2 percent cap on increases in the property tax levy. “Eventually the cap would have to go away, or else municipal government would then fall apart. It would have to stop providing other services.”
Unions sought information about the broader savings that taxpayers have realized from Christie-era reforms, particularly a requirement that public workers pay more toward their health benefits. Some pay as much as 35 percent of the cost.
“Show us what towns lowered taxes by this interest arbitration cap. Let us see what effect the cap has had,” said Patrick Colligan, president of the New Jersey State PBA. “We don’t have a full picture of what it’s done. We have a one-sided picture from half the committee.”
“It’s a sham. It’s a one-sided piece of information that should have never been released,” said Eddie Donnelly, president of the New Jersey Firefighters Mutual Benevolent Association.
The report said the arbitration cap has helped localities adhere to the 2 percent levy cap. Average raises have fallen to 2.2 percent for negotiated contracts and 1.85 percent under contracts decided by an arbitrator. There are far fewer arbitration cases, and they’re settled more quickly.
It says reductions in the growth of property taxes since 2010 have saved taxpayers $2.9 billion. It estimates that $429 million of that comes from slowing the growth of police salaries and $102 million from slowing the growth of firefighter salaries.
Less than six weeks remain until the election, and Democrats, including gubernatorial nominee Phil Murphy, have said they want to wait for a final report from the task force before deciding if they’ll support extending the cap.
They said Thursday the report from half of the task force isn’t sufficient for them.
O’Scanlon said calls to wait for a final report are a lame excuse, given both tax-cap math and arbitration history. He said unions and Democrats are stalling.
“Any legislator who’s going to permit those stalling tactics to succeed is punching property-tax payers right in the face,” O’Scanlon said.
Donnelly of the firefighters union pushed back at O’Scanlon’s claim, saying the report is missing relevant data that could easily be compiled over the next few months.
“That is a complete and outright lie,” Donnelly said. “If anybody’s doing anything with political agendas and ulterior motives, it’s that side of the committees. It’s those guys that came out with this report that’s half done.”
O’Scanlon said the debate needs to start now, not in the post-election lame-duck legislative session, because when the cap lapsed temporarily in 2014, the number of arbitration filings by worried municipalities jumped three-fold.
“We saw what was very likely hundreds of thousands of dollars of property taxes wasted,” said O’Scanlon. “We don’t want that to happen again because again, you may as well just be taking property taxes and setting them on fire.”