The deal struck to preserve the 2 percent cap on police and firefighter pay raises comes as a relief. Without it, New Jersey towns were at a real risk of losing the control over budgets and property taxes they’ve exercised since 2011.
On Monday, Assembly lawmakers agreed to extend the 2 percent cap on arbitration awards — limiting the raises third-party arbitrators may grant police and firefighters in contract disputes. The cap, which expired in April, is key to maintaining the mandatory 2 percent lid on municipal and school budgets that have helped slow the rapid rise of property tax rates.
The bipartisan deal now heads to the Senate, then to Gov. Chris Christie’s desk. Over the years, New Jersey police and firefighters have negotiated lucrative pay packages, with salaries at or close to the highest in the country. State law bars them from striking, so arbitrators are called in when negotiations break down. Over time, thearbitrators’ awards favored unions at taxpayers’ expense.
Unions hate the arbitration cap, claiming it robs them of leverage. Why should towns bargain if the law stops their losses at 2 percent?
But local governments say they’re hamstrung, too — by the state’s 2 percent budget cap — and without the arbitration law, it would be impossible to build predictable annual budgets.
Unions are correct to say property taxes are still up, but there’s no disputing the increase has slowed. Average property tax bills rose just 1.7 percent in 2013 and, from January 2011 to September 2013, average municipal contract raises were their lowest in decades.
In the compromise, unions salvaged a small win: Instead of capping arbitrators’ awards to 2 percent over the life of a contract, raises may be compounded each year — amounting to a slight increase.
But in their rhetoric, police and firefighters couched the arbitration cap as anti-public servant. They’re wrong. The 2 percent budget caps are working. The property tax burden has slowed. Without the arbitration caps, unexpectedly high contract awards could force towns to make sudden, drastic cuts.
The arbitration cap is the linchpin of a sensible spending policy that has put the brakes on rising property taxes. The Senate should approve this compromise bill tomorrow, extending the cap through 2017, and Christie shouldn’t hesitate to sign it.