Bill Text: NJ A4864 | 2014-2015 | Regular Session | Introduced
Bill Title: Links police and fire interest arbitration base salary cap to property tax levy; makes cap permanent.
Spectrum: Partisan Bill (Republican 16-0)
Status: (Introduced - Dead) 2015-12-10 - Introduced, Referred to Assembly Law and Public Safety Committee [A4864 Detail]
Download: New_Jersey-2014-A4864-Introduced.html
Sponsored by:
Assemblyman DECLAN J. O'SCANLON, JR.
District 13 (Monmouth)
Assemblywoman HOLLY SCHEPISI
District 39 (Bergen and Passaic)
Assemblywoman CAROLINE CASAGRANDE
District 11 (Monmouth)
Assemblywoman MARIA RODRIGUEZ-GREGG
District 8 (Atlantic, Burlington and Camden)
Co-Sponsored by:
Assemblymen Clifton, Auth, McGuckin, Assemblywomen N.Munoz, Handlin, Assemblyman C.J.Brown, Assemblywoman Simon, Assemblymen Carroll, Bramnick, Peterson, Space and DiMaio
SYNOPSIS
Links police and fire interest arbitration base salary cap to property tax levy; makes cap permanent.
CURRENT VERSION OF TEXT
As introduced.
An Act concerning police and fire interest arbitration and amending P.L.2010, c.105.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1 Section 2 of P.L.2010, c.105 (C.34:13A-16.7) is amended to read as follows:
2. a. As used in this section:
"Base salary" means the salary provided pursuant to a salary guide or table and any amount provided pursuant to a salary increment, including any amount provided for longevity or length of service. It also shall include any other item agreed to by the parties, or any other item that was included in the base salary as understood by the parties in the prior contract. Base salary shall not include non-salary economic issues, pension and health and medical insurance costs.
"Non-salary economic issues" means any economic issue that is not included in the definition of base salary.
b. An arbitrator shall not render any award pursuant to section 3 of P.L.1977, c.85 (C.34:13A-16) which, in the first year of the collective negotiation agreement awarded by the arbitrator, increases base salary items by more than [2.0 percent] the allowable percentage increase to the adjusted tax levy, as set forth in the municipal purposes property tax levy cap pursuant to sections 9 and 10 of P.L.2007, c.62 (C.40A:4-45.44 and C.40A:4-45.45), of the aggregate amount expended by the public employer on base salary items for the members of the affected employee organization in the twelve months immediately preceding the expiration of the collective negotiation agreement subject to arbitration. In each subsequent year of the agreement awarded by the arbitrator, base salary items shall not be increased by more than [2.0 percent] the allowable percentage increase to the adjusted tax levy, as set forth in the municipal purposes property tax levy cap pursuant to sections 9 and 10 of P.L.2007, c.62 (C.40A:4-45.44 and C.40A:4-45.45), of the aggregate amount expended by the public employer on base salary items for the members of the affected employee organization in the immediately preceding year of the agreement awarded by the arbitrator.
The parties may agree, or the arbitrator may decide, to distribute the aggregate monetary value of the award over the term of the collective negotiation agreement in unequal annual percentage increases, which shall [not] be no greater than the compounded value of [a 2.0 percent increase per year] annual increases at the rate of the allowable percentage increase to the adjusted tax levy, as set forth in the municipal purposes property tax levy cap pursuant to sections 9 and 10 of P.L.2007, c.62 (C.40A:4-45.44 and C.40A:4-45.45), over the corresponding length of the collective negotiation agreement. An award of an arbitrator shall not include base salary items and non-salary economic issues which were not included in the prior collective negotiations agreement.
(cf: P.L.2014, c.11, s.2)
2. Section 3 of P.L.2010, c.105 (C.34:13A-16.8) is amended to read as follows:
3. a. There is established a task force, to be known as the Police and Fire Public Interest Arbitration Impact Task Force.
b. The task force shall be comprised of eight members as follows:
(1) four to be appointed by the Governor;
(2) two to be appointed by the Senate President; and
(3) two to be appointed by the Speaker of the General Assembly.
c. All appointments shall be made within 30 days of the effective date of P.L.2010, c.105 (C.34:13A-16.7 et al.). Vacancies in the membership shall be filled in the same manner as the original appointments. The members of the task force shall serve without compensation but may be reimbursed, within the limits of funds made available to the task force, for necessary travel expenses incurred in the performance of their duties.
d. (1) The task force shall organize as soon as is practicable upon the appointment of a majority of its members and shall select a chairperson from among the appointees of the Governor and a vice chairperson from among the appointees of the Legislature. The Chair of the Public Employment Relations Commission shall serve as non-voting executive director of the task force.
(2) The task force shall meet within 60 days of the effective date of P.L.2010, c.105 (C.34:13A-16.7 et al.) and shall meet thereafter at the call of its chair. In furtherance of its evaluation, the task force may hold public meetings or hearings within the State on any matter or matters related to the provisions of this act, and call to its assistance and avail itself of the services of the Public Employment Relations Commission and the employees of any State department, board, task force or agency which the task force determines possesses relevant data, analytical and professional expertise or other resources which may assist the task force in discharging its duties under this act. Each department, board, commission or agency of this State is hereby directed, to the extent not inconsistent with law, to cooperate fully with the task force and to furnish such information and assistance as is necessary to accomplish the purposes of this act. In addition, in order to facilitate the work of the task force, the Public Employment Relations Commission shall post on its website all collective negotiations agreements and interest arbitration awards entered or awarded after the date of enactment, including a summary of contract or arbitration award terms in a standard format developed by the Public Employment Relations Commission to facilitate comparisons. All collective negotiations agreements shall be submitted to the Public Employment Relations Commission within 15 days of contract execution.
e. (1) It shall be the duty of the task force to study the effect and impact of the arbitration award cap upon local property taxes; collective bargaining agreements; arbitration awards; municipal services; municipal expenditures; municipal public safety services, particularly changes in crime rates and response times to emergency situations; police and fire recruitment, hiring and retention; the professional profile of police and fire departments, particularly with regard to age, experience, and staffing levels; and such other matters as the members deem appropriate and necessary to evaluate the effects and impact of the arbitration award cap.
(2) Specifically, the task force shall study total compensation rates, including factors subject to the arbitration award cap and factors exempt from the arbitration award cap, of police and fire personnel throughout the State and make recommendations thereon. The task force also shall study the interest arbitration process and make recommendations concerning its continued use in connection with police and fire labor contracts disputes. The task force shall make findings as to the relative growth in total compensation cost attributable to factors subject to the arbitration award cap and to factors exempt from the arbitration award cap, for both collective bargaining agreements and arbitration awards.
f. The task force shall annually report its findings, along with any recommendations it may have, to the Governor and, pursuant to section 2 of P.L.1991, c.164 (C.52:14-19.1), to the Legislature. [The task force's final report due on or before December 31, 2017 shall include, in addition to any other findings and recommendations, a specific recommendation for any amendments to the arbitration award cap. Upon the filing of its final report on or before December 31, 2017, the task force shall expire.]
(cf: P.L.2014, c.11, s.3)
3. Section 4 of P.L.2010, c.105 (C.34:13A-16.9) is amended to read as follows:
4. This act shall take effect January 1, 2011[; provided however, section 2 of P.L.2010, c.105 (C.34:13A-16.7)] and shall apply [only] to collective negotiations between a public employer and the exclusive representative of a public police department or public fire department that relate to negotiated agreements expiring on that effective date or any date thereafter [until or on December 31, 2017, whereupon, after December 31, 2017, the provisions of section 2 of P.L.2010, c.105 (C.34:13A-16.7) shall become inoperative for all parties except those whose collective negotiations agreements expired prior to or on December 31, 2017 but for whom a final settlement has not been reached]. This act also shall apply to collective negotiations between a public employer and the exclusive representative of a public police or public fire department where there had been no prior collective negotiations agreement between the parties as of the effective date of the act.
(cf: P.L.2014, c.11, s.4)
4. This act shall take effect immediately.
STATEMENT
The two-percent cap on base salary increases in interest arbitration awards in police and fire contract disputes was enacted in 2010 shortly after enactment of the two-percent cap on increases in the property tax levy. The arbitration award cap was one of the most significant tools provided to local governments to control expenses in order to comply with the property tax cap. The Legislature recognized that the arbitration system in place when the two-percent property tax cap was enacted often forced increases of greater than two percent in the largest single portion of many local budgets.
Since its enactment, experience has shown that the arbitration award cap is indispensable to the effectiveness of the property tax cap. It is mathematically unsustainable to require a local government to increase its largest budgetary line item by an amount greater than its rate of revenue increase. Therefore, in order for the property tax cap to remain viable, the arbitration award cap should be made permanent and tied directly to the property tax cap.
The two-percent cap on police and fire interest arbitration awards that was initially established by P.L.2010, c.105 expired on April 1, 2014, but subsequently was extended by P.L.2014, c.11 to December 31, 2017. Under current law, an arbitrator may not render an award which, in the first year of the collective negotiation agreement increases base salary items by more than 2.0 percent of the aggregate amount expended by the public employer on base salary items for the members of the affected employee organization in the year immediately preceding the expiration of the collective negotiation agreement subject to arbitration. Base salary items in each subsequent year of the agreement are not to be increased by more than 2.0 percent of the aggregate amount expended by the employer on base salary items. The amount awarded may be distributed in unequal amounts over the years of the agreement, but is not to be more than the compounded value of a 2.0 percent increase.
This bill amends the current interest arbitration law by linking the cap on interest arbitration awards to the property tax levy cap, which currently is two percent. The bill also makes permanent the cap on interest arbitration awards by repealing the December 31, 2017 "sunset" provision established by P.L.2014, c.11. The bill further clarifies that the two-percent cap applies not only to expiring contracts, but also to all police and fire collective negotiations, including those cases in which there was no initial collective negotiations agreement prior to January 1, 2011.
Finally, to comport with the permanent cap, the bill requires the Police and Fire Public Interest Arbitration Impact Task Force to indefinitely continue its work and issue annual reports. Under current law, the task force is required to issue a final report by December 31, 2017 and then expire.
