It’s beginning to look like Governor Chris Christie’s Boulevard of Compromise is a dead end.
The 2% property tax cap is under attack, as the Trenton Democrats are on the verge of passing an “extension” of the Interest Arbitration Award Cap that eliminates the cap on most arbitration awards and increases the cap on the remainder of the potential awards by 50%.
In my piece last night about the Interest Arbitration Cap, I raised the hope that published reports that Assembly and Senate committees cleared an identical bill that guts the cap were inaccurate because Senator Mike Doherty was co-sponsor of the Senate bill and because of Senate President Steve Sweeney’s comments about the cap at his Town Hall Meeting in Keansburg last week. It turns out that was wishful thinking. MMM has learned the bills are identical and, inexplicably, Doherty is a primary sponsor of the Senate bill, giving Sweeney and Assembly Speaker Vincent Prieto “bi-partisan” cover.
Doherty has yet to return our call for comment. We’ve been told his attitude about the bill he is sponsoring with Sweeney is “a bill that will pass is better than no bill.”
Doherty has a point, albeit a minor one. If no bill passes by April 1, there is no cap on Interest Arbitration awards at all. If the bill that cleared through committees yesterday passes the full legislature and is signed by Christie, there will be a 3% cap on a minority of municipal government labor contracts for the next few years. If Christie vetoes the bill, even conditionally, there is no arbitration cap. Either way the property tax blaze is about to be reignited and/or the pain inflicted upon municipalities will be so great that consolidations and mergers will be forced indelicately. The backdoor destruction of municipal governments appears to be Sweeney’s undeclared plan.
New Jersey property taxes will likely resume the double digit annual growth that occurred under the McGreevey, Codey and Corzine Administrations if Assembly Speaker Vincent Prieto’s version of the of the Interest Arbitration extension becomes law. Either that, or municipal governments as we know them will cease to exist, succumbing to a long and painful death of higher crime and reduced services and capital improvements.
A 2% cap on interest arbitration awards in labor disputes was a key component of the 2% property tax cap negotiated between Governor Chris Christie, Senate President Steve Sweeney and Prieto’s predecessor, Sheila Oliver in 2010. It worked. Arbitrators made awards of less that 2% to police and fire fighters unions and property taxes rose less than 2% per year over the last four years.
The problem is Oliver insisted that the arbitration cap expire on April 1, 2014. Now, we’re a week before the arbitration cap expires and Prietro is gutting the cap by passing an extension of the law that exempts contracts that were awarded less than 2% during the last three years from any future caps and raises the cap to 3% on contracts that have not been negotiated since 2010.
The math will never work. If property taxes stay capped at 2% but the primary cost of property taxes, salaries, are not capped or are capped at 3%, municipal services will disappear. Police will be laid off, with the junior, lower paid officers being let go first, leaving the older and more highly paid officers to run drown the inevitable increase in crime. Towns will go bust. The state will take over municipal governments and force consolidations.
Monmouth County Freeholder Serena DiMaso, Keansburg Deputy Mayor Jimmy Cocuzza, Congressman Frank Pallone and Senate President Steve Sweeney talk before Sweeney’s Town Hall Meeting in Keansburg. Pallone was not impressed. Click for larger view.
Senate President Steve Sweeney told MMM today that he expects a key provision of New Jersey’s 2% property tax cap that is set to expire on April 1 to be extended.
The interest arbitration provision of the property tax reforms passed with bi-partisan support three years ago caps arbitration awards in government labor disputes to 2%. Since they’ve been implemented the average arbitration award resulted in salary increases for local government employees to 1.86%–the lowest in 20 years. The provision will expire on April 1 unless extended by legislation.
“It’s my bill,” Sweeney said, “I’ll pass it next week.” Ask if the arbitration cap would become permanent or extended with another sunset provision, Sweeney said, “That’s what we’re working on now. I’d just assume we done with it, but we’ll get the best we can.”
Sweeney said that while negotiating the original property tax reforms that he favored a 0% cap. “That would force municipalities to, if not consolidate, to share, to share services.”
Sweeney spoke to MMM after his sparsely attended Town Hall Meeting at the Bayshore Senior Day Center in Keansburg this afternoon.
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.
TRENTON — Mayors say a group with an obscure and achingly bureaucratic name has been the most important tool in slowing the growth of New Jersey’s property taxes, the highest in the nation. For the last three years, arbitrators who decide contract…
ASSEMBLY REPUBLICANS AGREE WITH GOVERNORS CALL TO
END BIG PAYOUTS FROM PROPERTY TAXPAYERS TO RETIRING PUBLIC EMPLOYEES
Assembly Republicans Caroline Casagrande, Nancy Muñoz, Donna Simon and Declan OScanlon, who sponsor legislation to end the practice of paying public employees for unused sick time, were pleased that Governor Christie remains committed to providing this vital property tax relief that has been blocked by some Trenton politicians.
We have capped property taxes and saved billions by reforming public employee benefits. Its time to finish the job and save property taxpayers from giving big checks to retiring public employees, Assemblywoman Caroline Casagrande, R-Monmouth, said. Anyone who is serious about winning the war against sky-high property taxes should embrace this common sense reform.
Governor Christie repeated his call for sick pay reform during yesterdays budget address as part of the items needed to further improve New Jerseys fiscal health.
The historic bipartisan reforms we supported resulted in the slowest growth of property taxes in 24 years, after a decade of crushing increases, Assemblywoman Nancy F. Muñoz, R-Union, Somerset and Morris, said. We can do even better for property taxpayers by enacting a sensible law that requires the use of sick days for what they were intended.
Assembly Bill 2495, sponsored by 23 Assembly Republicans, would prohibit payments to public employees for unused sick leave. The legislation would also prohibit sick leave for those who have been indicted and require medical documentation for absences of six or more consecutive days.
Bringing governments workplace policies in line with those in the private sector should be a no-brainer, Assemblywoman Donna Simon, R-Hunterdon, Somerset, Mercer and Middlesex, said. In the public sector, the taxpayer is the boss and we can improve the bottom line for both property taxpayers and our states finances with this logical reform.
A few recent examples have highlighted how much money unused sick time costs property taxpayers:
Governor Christie has proposed a budget with the highest level of school aid and largest debt payment in state history, while we have achieved the smallest property tax growth in state history, Assembly Republican Budget Officer Declan OScanlon, R-Monmouth, said. Governments throughout New Jersey could deliver even more for taxpayers if Democrats in the Legislature agreed to work with us to eliminate these grotesque payments that have no practical purpose other than personal profit.
Sweeney wants to pay for beach safety and maintenance by getting rid of cops and dpw workers
Photo credit: www.SignsByTheSea.com
MMM has called Senate President Steve Sweeney (D-Gloucester) three times since he jumped on board with the Senator Mike Doherty (R-Warren) in sponsoring legislation that would ban shoreline municipalites from selling beach badges or imposing other user fees to pay for lifeguards, beach cleanup and policing, if those towns accept federal and state money to rebuild from the destruction of Hurricane Sandy. He hasn’t called back. Steve Sweeney is a kitten. Kitten, kitten, kitten!
Given that he won’t talk to us, we’ll have to judge Sweeney’s crusade for free sand in his ass by what others report he says. The Senate President invited himself to a meeting with the Asbury Park Press Editorial Board earlier this week to make his case for free beaches.
“You don’t charge me to breathe air, why are you charging me to sit on a beach?”
We should be grateful that the top elected Democrat in New Jersey hasn’t figured out how to tax breathing (yet). But really now, our Senate President thinks breathing air (as opposed to grapefruit juice?) is analogous to sitting on a beach? That is something we should be concerned about, especially since this guy is considering a run for governor.
Sweeney told the APP that Belmar and the other shore communities that impose beach user fees should cover those costs by consolidating police forces and departments of public works. He said he would “beat up mayors down the shore” to make it happen “because its not acceptable, you know, to charge beach fees.”
Belmar Mayor Matt Doherty took Sweeney’s first beating:
“I asked (Doherty), how many people live year-round in his town,” Sweeney said. “He’s got a one-square mile town, he’s got 5,800 people. Now, could we run a shared police department? I met his public works director today, could we run a shared public works office?”
“You guys know how I feel about shared services,” Sweeney told the APP. We don’t know if the APP knows how he feels, but MMM thinks Sweeney is thwarting shared services and other methods that municipalities could use to reduce the size and cost of local government. If Sweeney was serious about property tax reduction and more efficient local government he would have passed Governor Christie’s property tax tool kit.
Conforms With 2% Cap Levy Law Absent Needed Tool Kit Reforms
MIDDLETOWN – The Middletown Township Committee anticipates introducing its 2011 municipal budget that is $3.87 million (5.9%) less than the Township’s 2010 budget.
“Middletown’s proposed municipal budget is very austere and in full conformance with the new 2% cap levy law despite the Legislature’s continued failure to enact the Governor’s tool kit reforms that would empower the Township to make further cuts,” said Middletown Mayor Tony Fiore.“We are hopeful to continue to rein in spending through ongoing negotiations with the Township’s collective bargaining units with a focus on decreasing the Township’s health care costs.”
“Cuts in the proposed budget include the layoffs of 26 employees, including 10 police officers, and the third consecutive year of salary freezes for the Township’s managerial employees,” continued Fiore.“Middletown will continue to focus on core governmental functions while seeking other ways to continue to reduce costs though interlocal agreements and the Township’s solar initiative that is currently under way.”
Proposed Budget Data and Facts
·The proposed 2011 municipal budget is $61,114,285 compared to the adopted 2010 budget that was $64,979,576.
·The proposed budget represents an actual decrease in spending of $3,865,291 (5.9%) from the 2010 budget.
·The largest cost drivers offsetting the Township’s $3.87 million in budget cuts are tax appeal refunds, State-mandated pension contribution increases of 22%, and costs associated with deferred charges due to numerous retirements last year.
·The proposed 2011 budget anticipates an increase in the total tax levy of $1,357,855 which complies with the new 2% cap levy law and will cost the average Middletown homeowner approximately $5 per month.
·The municipal budget makes up only approximately 22% of the average property tax bill, the remaining portion relates to the school and county tax levies.
Lastly, it’s important to note here as well, that this is the product of compromise. Now, compromise can be reached in a variety of different ways, through a variety of different paths, but I want to thank the Senate President and the Speaker and the Minority Leader of the Senate and of the Assembly for traveling on this journey to the compromise with me. It is extraordinarily important that we all stand up for the principles we believe in, but also recognize that we are sent here to get the work done that the people have sent us here to do. Mayors, council people, have been crying out for this reform for a long time. And I suspect that if myself, the Speaker, and the Senate President along with the minority leaders had told you back in January of 2010 that by December of 2011, we would have a 2% hard cap on property tax levies, and a 2% hard cap on interest arbitration awards, you probably would have told us we were crazy. This is the product of people standing up for their principles, listening to the people who voted for us, and compromise where compromise is needed. The last part which I forgot, is this mirrors the 2% levy cap in respect that pension and healthcare benefits are excluded from the cap. However, the other commitment that we have made to each other and all of this have said this repeatedly over time, is that when we return in January to our work that we are going to get pension and health benefit reform benefit done. Each one of these things is a building block to finally controlling property taxes in New Jersey. We’ve got the levy cap, we’re dealing with interest arbitration, we have some other tool kit items that we’re going to have to turn to as well and then we’re going to turn to pension and health benefits as well. We’ve made that commitment to each other both privately and publically. So again, I thank the leaders of the Legislature for their willingness to work with me, their willingness to compromise, and to come to an agreement that makes sense for the people in the state. There’s nothing more important than getting property taxes under control in this state and changing the system. And I think for the first time in a long time, we have taken meaningful steps towards doing that.
Conditional Veto Expands and Strengthens Bill Provisions to Better Protect Taxpayers and Provide Relief for Strained Local Budgets
Trenton, NJ – Governor Chris Christie today issued a conditional veto of Senate Bill 2220, a tool kit bill and element of the Christie Reform Agenda, to strengthen and improve upon the bill and more effectively stop the abuse of sick and vacation benefits, or supplemental compensation. While the bill accomplishes a large part of Governor Christie’s reform goals for these benefits, the Governor has identified provisions in the bill that can be improved upon to further assist strained local budgets and help meet the reality of Cap 2.0.
“This bill represents a good-faith continuation of the public employee benefits reform I signed into law earlier this year that will serve as a critical cost-savings tool for municipalities and school boards that must live within our property tax cap. I applaud the bill sponsors and the legislature for taking action on this critical reform measure. By working together, as we have in the preceding days, we are showing New Jerseyans and the country that real change is possible when to come together to work on real, meaningful solutions, in the public’s best interest,” said Governor Christie. “The changes I’ve put forward for this legislation make common sense and important improvements to strengthen the bill’s provisions and more effectively curb the unreasonable and abusive public employee payouts that come at the public’s expense.”
Governor Christie urged the legislature to act quickly to adopt the substantive changes in the conditional veto, and continue building upon the progress that has been made on critical elements of the Christie Reform Agenda, including comprehensive reforms to the interest arbitration system announced today.
“In these difficult economic and budgetary times, New Jersey taxpayers can no longer be asked to foot the bill for a system that is rife with waste and abuse. Sick days provide time off for employees who are sick, and do not represent an additional form of compensation for employees who are fortunate enough to remain healthy. Whatever rationale once justified this type of abuse, the time has come for the practice to end,” added Governor Christie. “Those individuals who abuse the public trust must not be allowed to further exploit the system for their own enrichment. The changes identified by my Administration and addressed in this conditional veto go further to put an end to these practices. I urge the legislature to continue the important progress we’ve made in delivering real reform to the people of New Jersey by acting quickly to adopt these changes and providing an important element of the tool kit to local governments.”
Governor Christie’s Conditional Veto makes the following improvements to S-2220, to improve and strengthen the legislation, better protect taxpayers and provide even greater budgetary relief to municipalities:
Strengthen the public trust by suspending supplemental compensation for any employee under indictment for a crime that involves or touches his or her public office, and mandate the forfeiture of any supplemental compensation if convicted;
Phase out the practice of distributing cash payouts for sick days by prohibiting supplemental compensation for sick days that accumulate after the effective date of the legislation for all state, local government and school district employees;
Require that sick days accrued prior to the effective date of this legislation be used before those days accrued after the effective date;
Expand to all current employees at any point during their employment, not just hires after the effective date of the bill in the twelve months before retirement, the requirement that a physician provide written verification for use of six or more consecutive sick days; and
Require that vacation days accrued prior to the effective date (those not subject to the one-year carry forward provision) of this legislation be used before those days accrued after the effective date (those subject to one-year carry forward restriction).
