2% Interest Arbitration Extension

Unanimously approved by the Legislature and the Governor in June 2014, the extension on the 2% cap on Interest Arbitration awards is set to expire on December 31, 2017. While the 2% property tax levy cap will continue, the cap on Interest Arbitration awards will expire on the same day that the final report and recommendations of the Police and Fire Public Interest Arbitration Impact Task Force is due, unless the Legislature and Governor act.

Controlling Costs

The temporary 2% cap on police and fire arbitration contract awards has been an effective tool to control increasing salary costs and provide a solution to assist local governments in keeping property taxes down and costs under control. However, we recognize that this change in arbitration reform needs a longer time to mature in order to see the benefits of the legislation and its actual impact on the cost of local government budgets and the impact on taxpayers.

We urge you to pass a resolution urging the State Legislature and Governor to extend the 2% cap on Police and Fire Arbitration Contract Awards for an additional five years, at which time the Legislature will have hard data to examine and then make a final decision as to whether this law should be made permanent.

If the cap on interest arbitration expires, while the 2% property tax levy cap remains in effect, municipalities will be forced to reduce or eliminate municipal services in order to fund interest arbitration awards.

League Advisories

December 8, 2017 

September 28, 2017 

September 22, 2017 Joint Press Conference to Extend the 2% Interest Arbitration Cap

The League, the New Jersey Conference of Mayors (NJCM), and the New Jersey Association of Counties (NJAC) held a joint press conference urging the extension of the 2% interest arbitration cap (PDF). The press conference, which includes the Officers of the League, is part of our public campaign to educate the Legislature and the general public on the importance of extending this critical tool, which has proven to be an effective curb on property tax increases.

August 25, 2017 Take Action

  • Sample Resolution urging the State Legislature and Governor to extend the 2% cap on Police and Fire Arbitration Contract Awards for an additional five years