Task force study on arbitration reform confirms law works – and is essential

Following up on his comments last week that allowing the interest arbitration law to expire on April 1st would have disastrous consequences on towns and property taxpayers, Assemblyman Declan O’Scanlon will introduce legislation on Thursday that would make the law permanent.

From January 2011, when the law took effect, to September 2013, average raises in contracts, whether through arbitration or negotiations, were 1.86 percent — the lowest in at least 20 years. O’Scanlon was a member of the task force charged with studying the effects of the law since its inception and said there is no doubt the cap has been the single most significant tool responsible for the stabilization of municipal budgets.

“The data contained in the task force report is irrefutable that the interest arbitration law works and is an essential element in helping towns control costs,” said O’Scanlon, R-Monmouth. “The cap on arbitration awards was a critical part of our 2010 reforms and was the most important tool ever enacted to bring under control the never-ending, upward pressure on property taxes and the gradual strangling of local government services.  One simply cannot logically argue that we can maintain a cap on property taxes without providing this tool for municipal officials to control their largest expense categories.

“This law was a bipartisan effort, and the Legislature needs to come together once again to make the arbitration law permanent to prevent the erosion of services and the potential layoffs of police, fire and other public works personnel,” said O’Scanlon, who was a primary sponsor of the original legislation. “Taxpayers expect their elected officials to have an honest debate and do the right thing. Without the arbitration cap, the property tax cap levy will eventually fail.  It’s that simple.”

O’Scanlon, noting the average property tax gain for 2013 was a modest 1.7 percent, said the data shows the importance of interest arbitration reform and the need to make it permanent. In 2011, the average bill went up 2.4 percent, and in 2012, the increase was 1.6 percent — a contrast between 2004 through 2006, when the bills went up at least 7 percent each year.

A copy of the bill is attached and the link to the task force report is below.