New Jersey Gov. Christie Signs Law Capping Pay Through Arbitration

WAYNE, N.J. (AP) - Gov. Chris Christie signed a bill Tuesday that caps increases to police and firefighter pay awarded through arbitration, a measure he called the most important of the proposals in his so-called toolkit to help towns control costs.

With Democratic Senate President Stephen Sweeney looking on, Christie hailed the passage of the bill as a testament to bipartisan cooperation.

"We've proven over the last year that Republicans and Democrats can get things done together," he said. "Mayors have been yelling and screaming for these kinds of reforms for years."

The bill caps salary awards, including longevity pay and automatic step increases, for police and firefighters at 2 percent when their unions engage arbitrators to settle contracts.

It also fast-tracks the arbitration process by giving arbitrators a 45-day window to rule on disputes and limiting the appeal process to 30 days. In addition, arbitrators' pay will be capped at $1,000 per day or $7,500 per case, whichever sum is lower.

Christie said Tuesday that some cases in arbitration have dragged on for years, and that fear of excessive arbitration awards has hampered some towns' ability to conduct effective contract negotiations.

"Arbitration works when it's balanced," said Sweeney, who is an organizer for the International Association of Ironworkers. "But the system has gotten out of whack over the last 20 years."

Pension and health care costs are not included in the cap. Christie said the cap will lapse in April 2014, at which time lawmakers will review its effects and consider modifications.

"This is the most significant individual bill in the toolkit," Christie said.

Municipalities have been clamoring for tools to help them control costs since the Legislature approved—and Christie signed -- a 2 percent cap on annual property tax increases that goes into effect Jan. 1.

Christie said residents could see a difference in their tax bills by August, but that the effect likely won't be seen until the end of 2011 or beginning of 2012.

"It's one of the major issues we're dealing with," Hoboken Mayor Dawn Zimmer said after the signing. "This gives us the tools going forward to make sure it's fair for the residents of the city of Hoboken and of New Jersey."

In a statement, Anthony Wieners, president of the state Police Benevolent Association, was critical of the law.

"Arbitration awards are rare, and we hope this law doesn't lead to an explosion of arbitration cases resulting from local governments pushing their hard decisions onto arbitrators," he said. "But the reality is that taxpayers and law enforcement will face far more serious issues in 2011 as layoffs continue and crime increases due to a lack of funding."

The governor said another primary target is sick leave policies for public employees, some of whom routinely get tens of thousands of dollars in unused sick time when they retire. Christie noted a case in Parsippany in which four police officers reportedly were due a total of $900,000 upon retirement.

Christie signed a bill this year that limits state employees to receiving $15,000, and he said Tuesday a similar measure in the Legislature for school, government and public safety workers needs to be toughened.

"Sick leave is for when you're sick," he said. "It's not supposed to be a second taxpayer-funded retirement payment."

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