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December 19, 2017

Re:  Press Conference on Interest Arbitration Cap

Dear Mayor:

Yesterday, with only 13 days until the expiration of the 2% Interest Arbitration Cap, the League of Municipalities was joined by the New Jersey Association of Counties, the New Jersey Conference of Mayors, New Jersey Chamber of Commerce, New Jersey Business and Industry Association, New Jersey Realtors Association and Assemblyman Declan O’Scanlon at a press conference urging the Legislature and Governor Elect Murphy to support permanently extending the 2% cap Interest Arbitration Cap.  We highlighted that an expired cap will have a negative impact on property taxes and jeopardize the continued delivery of critical services, as well as adversely impact residential and commercial property taxpayers, working class families, and those on fixed incomes.

League President James Cassella, Mayor of East Rutherford, noted that the 2% Interest Arbitration Cap has controlled cost and without the cap municipalities could see costly arbitration awards that will force local officials to reduce services or lay off employees to satisfy the arbitrator’s award and stay within the 2% levy cap. 

New Jersey Association of Counties President Heather Simmons, Gloucester County Freeholder, noted that failure to permanently extend the 2% cap on binding interest arbitration awards will inequitably alter the collective bargaining process in favor of labor at the expense of taxpayers, and will lead to awards by arbitrators with no fiduciary duty to deliver essential services in a cost effective manner.

New Jersey Chamber of Commerce President and CEO Tom Bracken noted that the 2% cap on salary awards is in line with private industry as their employees are receiving 2-3% salary increases.

Assemblyman O'Scanlon, a member of the Interest Arbitration Task Force, noted that the Interest Arbitration cap has resulted in over $500 million in savings to New Jersey’s property taxpayers. 

We received terrific coverage on the event, which appeared in several media outlets, and we intend to keep up the pressure despite the approaching deadline.  Although it’s unlikely at this point that the cap will be extended before then, we faced this same scenario in 2014 with the cap being extended at that time for an additional three years several months after the original one sunset.  Please keep the letters and resolutions coming; and, add calls to the Governor Elect at 609- 292-4075, your legislative delegation, and legislative leadership, which include both the current Speaker of the General Assembly and the incoming one. 


Michael J. Darcy, CAE
Executive Director


Created: 12/19/17