Trenton, NJ – November 6, 2009 – (RealEstateRama) — The people of New Jersey have spoken. Their priorities are still tax relief and cost cutting at all levels of government. The new Administration will surely need to tackle the factors that drive public spending. Local officials, through the League of Municipalities, stand ready and willing to help.
For decades, through many administrations, we have offered ideas for reforms to limit local costs and to provide meaningful and consistent property tax relief. We were extremely pleased to read that Lieutenant Governor-elect Guadagno has been charged with identifying unfunded mandates, and, come January, Governor Christie’s first executive order will freeze enforcement of unfunded mandates and new regulations for ninety days.
That’s a great beginning. During those ninety days, we will advocate for more permanent mandates relief in several priority areas. These include:
COAH Reform – There is little doubt that affordable housing is a real and persistent need in our state. However, the assessments and calculations by COAH are the subject of current controversy. New Jersey municipalities have already spent tax payers’ money, preparing plans based on faulty data and on projections that conflict with other State planning priorities. With two dozen current appeals of the COAH 3rd round regulations pending, it seems likely that local governments will again be forced to expend additional resources preparing new plans. The League would welcome the opportunity to work with the Christie Administration to reform the COAH process, to harmonize housing policy with other State planning priorities, and to reduce the financial obligation on our taxpayers.
Binding Interest Arbitration – This is a State mandated process for settling collective bargaining disputes between a local government and a police or fire employees’ union.
The process allows a union to bring in a third-party arbitrator whenever economic issues, such as salary percentage increases, longevity pay, or shift and rank differentials, remain unresolved after at least three negotiation sessions. After considering guidelines contained in the law, the arbitrator has the power to impose the terms of a new contract. Since 2000, salary schedule increases have averaged approximately 4% per year. (Previous arbitration awards ranged upwards of 8%.) However, the movement between the salary steps, which can cost as much as $15,000 per officer, is not considered by interest arbitrators as a cost to employers. As a result, a 4% increase to the salary guide can cost an employer upwards of 10%, depending on the way the award is structured.
Almost all other local government employees have benefited from this, though to a lesser extent. When the police are receiving a 4% increase to their guide, which is costing the municipality 6 to 10%, it is difficult for a governing body to justify only 1 to 2% for other public employees. At times, municipal collective bargaining units will wait for the municipality to settle with the police or fire union prior to negotiating, so as not to “lose out” on any benefits, including percentage increases, given to the police or fire unions.
Civil Service – The voters of a municipality can choose to place their public employees into the civil service system. However, once they make that decision, the State statute mandates that future generations of citizens are bound by it. We can amend our Constitution – our basic framework of civil rights and self-government – but we cannot rescind a personnel policy decision made decades ago. Requirements imposed on local management by civil service rules can often times increase local personnel costs and limit the municipalities’ ability to create shared services. Our citizens should have the right to withdraw from Civil Service.
Municipal Stormwater Regulations – The New Jersey Department of Environmental Protection developed these regulations in response to the U.S. Environmental Protection Agency’s Phase II Rules. Among other mandates, the regulations require municipalities to distribute annual notices to residents on stormwater management, to label catch basins, to reclaim water from washing municipal vehicles and street sweeping, to adopt and enforce stormwater control ordinances, and dictates use of salt storage structures. These regulations, while noble, have increased public works department’s budget throughout the state.
Pension contributions – Currently, the municipality must contribute a percentage determined by the Division of Pension. Given the ability to negotiate an employee “match” by contract, we could save the taxpayers some money.
More than ever, in tough economic times, the people need property tax relief. The State can provide through immediate relief from unfunded mandates.
