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).
With 12 Days Left in the Legislative Session, Governor Christie Praises Legislative Leadership for Working Together and Taking Action
Trenton, NJ – With just 12 days left in the legislative session, Governor Chris Christie has reached a bipartisan agreement to enact critical elements of the Christie Reform Agenda. Working together with Senate President Steve Sweeney, Assembly Speaker Sheila Oliver, Senate Minority Leader Tom Kean and Assembly Minority Leader Alex DeCroce, the result is action on transformational, long-overdue interest arbitration reform that will provide municipalities with the help they need to keep property taxes down for New Jerseyans.
As part of the Christie Reform Agenda, the Governor unveiled an aggressive plan to curb property tax costs through comprehensive arbitration reform. Arbitration reform, in addition to other pieces of the Reform Agenda, get at the root of the problem facing many local governments struggling to live within their means – ever-expanding operational costs. The Governor has been traveling the state since September, talking about the importance of enacting a tool kit of reforms to help local government leaders directly address cost drivers and manage within Cap 2.0 without adversely impacting core government services. Since the introduction of these reforms in May, hundreds of mayors and local elected officials across political parties have voiced their support for the tool kit, and underscored the tool kit’s importance in helping them manage their local budgets.
“Today we have shown that once again by putting the interests of New Jersey’s hard working men and women first we can achieve real, sustainable reform. Building on the first steps we took to reduce property taxes with “Cap 2.0,” we are transforming the interest arbitration process and providing a long-term solution that will help local governments keep property taxes down and costs under control,” said Governor Chris Christie. “New Jerseyans have waited a long time to see real reform happen in Trenton, which is why they deserve nothing less. Today’s agreement is a positive step in that direction, but we still have more work to do before the end of the year.
“There is no doubt that by going after the issues normally considered to be off limits politically, we are changing the conversation in New Jersey and getting results. Now we’re showing the rest of the country that if you work together on substantive solutions, you can change the way government works. We’re just starting to turn Trenton upside down and I’m confident that if we keep this same pace and continue to work together on what matters, we’re going to be able to go even farther,” concluded Governor Chris Christie.
The Christie bipartisan agreement on interest arbitration reform mirrors the Governor’s call for a meaningful cap that matches the tax levy cap of 2.0. This 2 percent cap will be applied to all salary items, such as across the board and cost of living increases, step increment payments and longevity pay. While pension and health costs are exceptions, as part of the Reform Agenda, the Governor has called for considerable measures to modernize and improve the pension and benefit system and has received assurances from Democratic leadership that these reforms will be passed in 2011.
Moreover, important to Governor Christie’s commitment to delivering meaningful and substantive reform, there will be no additional exceptions for non-salary economic terms moving forward. The agreement creates a prohibition on allowing non-salary economic issues to be arbitrated above the cap, unless already included in an existing contract. This is an important provision because arbitrators will no longer be able to create new cost items in successor contracts.
The agreement also creates fast track interest arbitration that will transform the system by establishing concrete deadlines to help accelerate the impact of the new cap.
The Christie Bipartisan Agreement on Interest Arbitration Reform
·Meaningful Cap 2.0 That Mirrors Tax Levy Cap. Provides a meaningful cap of 2 percent that will be applied to all salary items, such as the cost of across the board and cost of living increases, step increment payments and longevity pay.
·No Exceptions for Additional Non-Salary Economic Terms Moving Forward. The agreement prevents arbitrators from awarding any new economic items moving forward. The agreement creates a prohibition on allowing non-salary economic issues to be arbitrated above the cap, unless already included in an existing contract. All salary items are subject to a maximum 2 percent cap. This is an important provision because arbitrators will no longer be able to create new cost items in successor contracts
·Eliminate Accruing Labor Costs By Improving the Arbitration Process. The agreement transforms the system by putting in place concrete deadlines to help eliminate delays in the arbitration process, from contract negotiation to the receipt of the actual award. Traditionally, once a contract expires, labor costs continue to mount until a new contact is reached. Enforcing deadlines and speeding up the process will ensure timely implementation of new contracts and the cap on interest arbitration awards.
o45 Day Fast Track on Arbitration. Establishes a concrete deadline of 45 days from the filing of a request for interest arbitration to the date of award without any extensions. Both parties may request interest arbitration on the day the contract expires and awards will be implemented on the same day. All appeals must be decided within 30 days, if arbitrators do not comply with the 45 day deadline, they will be penalized.
oCaps Arbitrator Pay. The agreement will cap arbitrator compensation at $1,000 per day and $7,500 per case. Capping arbitrator pay will further incentivize speedy resolution of arbitration cases.
oIncreases Ethical Standards and Training for Interest Arbitrators.
oRandomizes the Selection of Interest Arbitrators.
·2011 Effect with 2014 Sunset. The law takes effect on January 1, 2011 and is set to sunset on April 1, 2014.
·Ensuring Responsible Implementation. The agreement also creates a Task Force to examine the impact of interest arbitration reform and the effectiveness of the cap on restricting municipal spending. The taskforce will study the impact of the cap on taxes, services, expenditures, public safety, recruitment, retention and professionalism. The Governor will directly appoint four members and two members will be directly appointed by the Senate President and Assembly Speaker. The Task Force will provide its recommendations no later than December 31, 2013.
Senator Jennifer Beck, Assemblyman Declan O’Scanlon and Assemblywoman Caroline Casagrande will be making a presentation on Governor Christie’s Tool Kit tomorrow, Tuesday, October 26th at 8 p.m. at Greenbriar Retirement Community in Marlboro.
This is the third such presentation the 12th District Legislators have given on the Tool Kit, which consists of more than 30 initiatives to cut waste and streamline government in order to control the tax burden in New Jersey.
The Democratic leadership of the State Legislature went along with Governor Chris Christie in capping NJ’s property tax increases at 2% last July with the understanding that they would get to work on and pass the governor’s “tool kit” which enables municipal leaders to responsibly reduce the cost of local government in September.
Rather than focusing on municipal government reform, the Democratic leadership is focusing on the Christie administrations failed “Race to the Top” application for $400 million in federal education dollars. Nothing that the Democrats discover in their “Race to the Top” circus will bring NJ the $400 million the Christie administration applied for. That $400 million is not coming, just as Frank Pallone’s $400 million to count fish is not coming.
Trenton Democrats need to put policy over politics. They can hold hearings on the Race to the Top snafu after they have passed the tool kit. They will get just as much political mileage and just as much money (none) from Race to the Top hearings held in December or January as they will from hearings held now.
Failure to pass the tool kit will lead to massive municipal layoffs and service cuts throughout New Jersey while property taxes increase by 2%. This week, just in Monmouth County, we have seen two clear examples of why the tool kit is necessary. In Belmar a mediator awarded the police department a 15% salary increase while Highlands announced that they might layoff 12 of their 53 employees, including three police officers. There will be literally hundreds of stories like this throughout the state if the legislature doesn’t pass the tool kit legislation before municipal leaders start crafting their 2011-2012 budgets.
Maybe that is what Senate President Steve Sweeney and Assembly Speaker Sheila Oliver want to happen. Maybe their focus is on next year’s state legislative elections and they think they have a better chance of keeping control of the legislature if New Jersey’s municipalities are in chaos next year with rising crime and garbage piling up on the streets because only the most highly paid municipal employees are still working while their former junior colleagues are collecting unemployment or moving out of state to take lower paying government jobs elsewhere.
Sweeney and Oliver wouldn’t do that, would they? Will it work if they do? I don’t think so.
