The arbitration reform compromise of Governor Christie’s toolkit to help municipalities cope with the new 2.0% property tax cap has been finalized. Assuming it gets approval in the legislature, the bill will work as follows
- Arbitrators will be selected randomly for each case
- Cap on arbiter compensation
- Agreement to close loopholes when discovered
- 45-day fast track to lower the costs of, and speed up, arbitration proceedings
- Non-salary items will be able to be included in the arbitration solution
- The cap on arbitration will be 2%, just like the property tax cap
- The cap will include all salary items, but will exclude health benefits and pensions (unfortunately)
- Raises can be averaged over the life of the contract, but the total raise can still only equal 2%
- The reform will expire in 2014
In a week that has been bursting at the seams with compromise, this is a bit easier to swallow than the Bush Tax Rate compromise that came out of the White House. However, the exclusions of health benefits and pensions is disappointing considering those are the two factors that are driving the costs increases for public contracts across the state. Also, the idea that these reforms should expire in 2014 and not force the democrats to repeal them if they don’t like them is an unfortunate provision. Governor Christie referred to it as a “product of compromise” that he would have preferred not be included in the bill. Hopefully the sunset clause does not reverse the closing of loopholes that are found in the arbitration system that will have a process of being closed under the new law.
Republicans in the legislature were generally pleased with the move. Here are some public statements on the compromise:
Senator Addiego –
“Taxpayers are the winners under this agreement. The compromise proposal reached between legislative leaders and the Governor is a major milestone for reform in New Jersey- one that too many residents thought would never come. Placing a realistic cap on arbitration awards, speeding up the time in which cases must be resolved, and requiring that arbitrators be chosen at random will reduce labor costs and the pressures they exert on local budgets. I look forward to supporting this bold property tax reform measure when it comes to the floor of the Senate.”
Senator Doherty
“For more than four decades middle-class families in this state have been clamoring for true, permanent property tax reform; today we delivered the first piece of that needed reform. However, much more needs to be done, particularly in the areas of healthcare and benefits reform.”
Assmebly Republican Leader DeCroce
“Today’s historic bipartisan agreement between Gov. Christie and legislative leaders represents another victory in the effort to control government spending. Interest arbitration is an important component in the governor’s property tax reform tool kit which taxpayers and local government officials have been rightfully demanding for a long time.”
“Game changing Governor Christie has again displayed his strong leadership by doing what is in the best interest of New Jersey taxpayers. Going forward, Assembly Republicans will continue to push for the other key elements of the Tool Kit which are also necessary to contain local government costs.”
Senate Republican Leader Tom Kean
“By working together, we have restored balance to the arbitration process to better control property taxes for middle-class families,” said Senator Kean. “Too many families have reached a breaking point with their ability to afford the costly expenses of local government. With this agreement, public employees and taxpayers can continue to live, work, and raise their families in a state that is more affordable for all. This is truly a historic day for New Jersey.”
the only true property tax reform is by abolishing it ,and replacing it with a local income tax …everyone pays the same percent of income ,what's more fairer than that !