Following up on the substantive property tax cap passed signed by the Gov. Chris Christie last July, the New Jersey Legislature’s next task is to control costs at the county and municipal levels. Unfortunately, Democrats in the legislature are attempting to distract from serious proposed reforms in New Jersey’s binding arbitration process by promoting a billthat does little to control sudden and drastic increases in public employee compensation at the local level.

Democrats are putting Assembly Bill 3393 up for a vote today. The bill is being touted as a serious set of reforms in how police and fire unions’ contracts are negotiated at the local level. In reality, it puts no limit on the binding arbitration awards given when government and union negotiators cannot reach an agreement on a labor contract. In refusing to put a hard cap on arbitration awards, those pushing AB 3393 are essentially ignoring the root of the problem.

As part of his 33 point “tool kit” of budget reforms, Gov. Christie has called for a 2 percent cap on the size of arbitration awards. This conforms with the 2 percent property tax cap passed in July. It allows local governments to limit property tax growth by removing a significant source of upward pressure on spending.

That’s why support for a cap has overwhelming bipartisan support. Elizabeth Mayor Christian Bollwage, and Essex County Executive Joseph N. DiVincenzo, Jr. are two locally elected Democrats who have come out in opposition to AB 3393 because it does not go far enough in controlling costs. Bollwage called for the governor to veto, while DiVincenzo called the bill “weak.”

Gov. Christie also opposes the bill, and has called on the legislature to move forward on bills in the Assembly and Senate that would impose a 2 percent cap on binding arbitration awards.

Dear Legislator:
Following the progress made by the legislature and Christie Administration on local property tax reform, the governor has sought to take the next step to control costs at the county and municipal levels. The most important measure is a hard cap on arbitration awards. Unfortunately, the “reform” legislation moving through the Assembly, AB 3393, does not include a hard cap on arbitration awards. I urge you to either amend this legislation to include a 2 percent hard cap, or reject this bill outright.
I commend the legislature and Gov. Christie for a number of positive steps taken in Trenton over the past year. The governor’s first budget cut over 8 percent in government spending. The subsequent tax cap was a welcome relief to taxpayers who have seen their property taxes skyrocket to the highest in the nation. And because tax increases are off the table, New Jersey’s businesses can appropriately plan to begin hiring again.
But serious cost controls at the local level are an immediate necessity. AB 3393 distracts from that goal. It does not seriously address the driving cost behind spiraling costs – binding arbitration. It must either be strengthened to include a hard cap on arbitration increases, or scrapped altogether in favor of meaningful bills sponsored by Senator Michael Doherty and Assemblymen Declan O’Scanlon and Gary Chiusano.
Serious arbitration reform has bipartisan support across the state. Democratic Mayors and County Executives have agreed that AB 3393 is “weak” and “does not go far enough.” The public overwhelmingly supports the governor’s Tool Kit reforms as well.
So much progress has been made in New Jersey over the past year. It has been especially refreshing to see elected officials in Trenton reaching across the aisle to achieve bipartisan reforms with a serious impact on New Jersey families. Binding arbitration reform is the next step in this important and transformative process.
I urge you to stand up for your constituents and their local elected officials. Reject any “arbitration reform” that does not include a hard cap on compensation increases.
Grover Norquist

For a PDF, click here.