by Samantha Marcus | NJ Advance Media for NJ.com
After West Windsor’s police contract expired at the end of last year and negotiations with the township stalled, the union turned to an arbitrator to break the impasse.
The local union’s demands? Four percent annual pay hikes for sergeants and for patrolmen at the top of the scale and 2 percent annual wage increases for everyone else, in addition to the standard wage increases officers receive for additional years of service.
The township of course came in with a lower counter-offer. And, ultimately, the arbitrator awarded two years of 2-percent raises and two years of 2.25 percent raises for everyone.
Sound like business as usual to you?
No, say local government lobbyists.
They fear it could be a sign of bigger raises for police and firefighters who are emboldened to ask for more following the state’s controversial decision not to renew a law designed to help curb property taxes.
That law set a 2-percent cap on wage increases public-sector unions could win in interest arbitration.
The West Windsor arbitration award is one of just three to emerge since the cap expired in December 2017, opening the door for police and firefighters to get bigger raises when contract talks stall between their unions and municipalities.
The state’s League of Municipalities and Association of Counties continue to urge lawmakers to extend the cap, which they say helped slow the growth of the nation’s highest property taxes. Last year, the average residential property tax bill in New Jersey was $8,767.
Without the limits on arbitration, they said local government leaders would have to cut spending and reduce services to stay within the bounds of a separate 2 percent cap on increases in spending.
While the three arbitration awards issued so far indicate arbitrators are sticking pretty close to spirit of the 2 percent cap, the West Windsor award demonstrates the kind of “creep” that concerns local government employers, said Mike Cerra, assistant executive director of the New Jersey League of Municipalities.
In the decades before the cap was installed in 2011, arbitration awards ranged from 2 percent to nearly 6 percent.
Interest arbitration awards aren’t going to jump to 6 percent overnight, experts said.
Instead, Cerra said, “What we’re likely to see is over the course of time a creeping upwards. This community got 2.25 percent, for this reason this town should get 2.5 percent, and for that basis this town increases to 2.75 percent.”
A 2017 study — which was derided as one-sided by labor groups — determined the arbitration cap had saved taxpayers $530 million from police and firefighters salaries between 2010 and 2015.
Employers and unions head to arbitration when they can’t agree on contract terms, such as wages, health care contributions, vacation time or other conditions of employment. The vast majority of contracts are settled through voluntary negotiations.
That’s where the real impact is being felt, Cerra said.
“The level playing field we think the interest arbitration cap created has not been unleveled,” he said. “You are seeing these local bargaining units, who believe that they need to recapture what was lost, coming in with higher proposals across the board because they have the fallback option of interest arbitration.”
Local government leaders engaged in collective bargaining are reporting back with opening offers from police and fire unions of 4 percent and 5 percent, Cerra said.
“The police and firefighters in collective bargaining units are coming in very aggressive,” said John Donnadio, executive director of the New Jersey Association of Counties.
“You’re seeing in negotiations that the parties are starting further apart.”
Michael Freeman, vice president of labor relations for the New Jersey State Policemen’s Benevolent Association, said the unions’ asks have been within the context of what the municipalities can afford and with the interests of taxpayers in mind.
“We’re not asking for 6 percent. We understand the landscape. We understand there was a need to make some changes,” he said. “We’ve done our part, and we just want to recoup some of the losses that we’ve had.”
“We’re never going to go in with anything unreasonable.”
Between required increases in the pension and health benefit contributions, “our buying power has been decreased considerably,” he said. “And that money going back to municipalities comes out of our paychecks.”
Freeman said he expects most arbitration awards will be in line with the West Windsor award, more or less, as arbitrators are still required to weigh what the municipality can afford, employee morale, comparable pay and what the market will bear.
In Bedminster, Policemen’s Benevolent Association Local 366’s final offer included 2-percent raises for all officers every six months — on Jan. 1 and July 1 of each year — for the term of the four-year contract. The union argued its members had suffered financially under the 2 percent cap and by a state law requiring them to pick up a larger share of their health care costs and they needed to make up lost ground, according to the arbitrator’s decision.
Armed with data on the township’s finances, the local PBA said the township had amassed a healthy surplus and it could absorb the higher payroll costs.
Meanwhile, the township offered raises between 1.6 percent and 1.8 percent each year — and only for sergeants and officers at the top of the salary guide. All others would continue to receive annual increases tied to years of service.
The arbitrator’s final award, which has been appealed, would boost salaries for sergeants and officers at the top of the salary guide by 2 percent every year and granted one 2-percent across-the-board raise.
This, the arbitrator said, would “allow the township to continue to maintain its fiscal responsibility to the taxpayers while providing the officers a fair and reasonable increase and as such is in the public interest.”
Donnadio said he’s concerned unions are calling out local governments’ reserves in assessing their ability to pay — and that arbitrators will take this into account.
“I know that’s something that they believe they’re entitled to as well,” he argued. “The reserves are for rainy days and an emergency, not to pay general everyday operating expenses.”
But, Freeman countered, local governments were able to amass those reserves by paying police and firefighters less.
“They have more,” he said. “We’re making less.”
Samantha Marcus may be reached at smarcus@njadvancemedia.com. Follow her on Twitter @samanthamarcus.