News Flash

2% Interest Arbitration

Posted on: May 24, 2019

Reminder: Interest Arbitration Permanent Extension Effort Still Underway

The temporary 2% cap on police and fire arbitration contract awards was an effective tool to control increasing salary costs and provided a solution to assist local governments in keeping property taxes down and costs under control. As predicted, the failure to permanently extend the 2% cap on binding interest arbitration awards in December of 2017 has inequitably altered the collective bargaining process in favor of labor and at the expense of property taxpayers. 

 In fact, municipal and county officials from across the State are once again urging State leaders to permanently extend the 2% cap on binding interest arbitration awards as police and fire unions have been aggressively leveraging the expiration of the Interest Arbitration cap to win contracts in excess of the 2% tax levy cap imposed on local governing bodies for nearly a decade. 

 As has been well documented, the 2% cap on binding interest arbitration awards established clear parameters for negotiating reasonable successor contracts that preserved the collective bargaining process and took into consideration the separate and permanent 2% tax levy cap.  The equation is clear; failure to renew and permanently extend the 2% cap on binding interest arbitration awards is unsustainable without increasing property taxes or eliminating essential services.

 The League continues to work with our partners to permanently extend the 2% cap on binding interest arbitration awards.

 Contacts:

•    Lori Buckelew, Senior Legislative Analyst, lbuckelew@njlm.org, 609-695-3481 x112

•    Michael F. Cerra, Assistant Executive Director, mcerra@njlm.org, 609-695-3481 x120.


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