News Release
For Release: December 14, 2010
Contact: Frank Baraff

Mayor Hawkins hails passage of legislation to reduce municipal spending

Mayor Eldridge Hawkins, Jr. said today that binding arbitration legislation passed yesterday by the State Senate and State Assembly will reduce costs for New Jersey cities. Governor Christie has said that he will sign the “toolbox” legislation shortly.

Mayor Hawkins helped organize the effort by New Jersey’s mayors to seek passage of binding arbitration reform. He is chair of the New Jersey League of Municipalities’ Management Reform Committee and had testified before legislative hearings and advocates forcefully for new legislation to enable mayors to reduce municipal costs.

League of Municipalities’ Executive Director Bill Dressel credited Mayor Hawkins and his Management Reform Committee with keeping State policy makers focused on this item. “Five months had passed, after agreement was reached on the new cap law,” said Dressel. “We were approaching the New Year’s deadline for action on this reform. The testimony presented by Mayor Hawkins and his colleagues provided the impetus for this crucial compromise.”

Statement by Mayor Eldridge Hawkins, Jr.
“I am pleased that the legislature and the governor were able to agree on arbitration reform. In Orange, we’ve lost over $3 million in state aid. While this legislation will not help us with this year’s budget, in the future it will enable Orange to reduce the need for layoffs and reduce the burden on property tax payers. Salaries and benefits are by far the largest part of city spending.

The only way for cities to hold down property taxes while Governor Christie is slashing state aid is to give our cities and towns the power to control the vast majority of our spending that is presently off limits and beyond our reach. Now, it is critical for Trenton to pass the other legislation we need to keep costs down including civil service reform, benefits reform, elimination of unfunded mandates, and help in developing shared services.”

Background
The bill limits pay raises by municipalities to 2 percent if negotiators can't reach an agreement during contract negotiations. It helps municipalities deal with the impending 2 percent property tax cap.

When negotiators reach an impasse in contract negotiations with municipal governments, a third-party arbitrator is selected to try to get the two to agree to a settlement and, if that’s impossible, to make a determination on what it should be. Under the bill, the arbitrator would have to limit pay increases to 2 percent over the life of the contract. Pension and health care costs, which were exempted from the 2 percent property tax limit Governor Christie signed over the summer, will also be exempted under the bill. Arbitrators would be selected randomly and would have 45 days – down from 120 – to make a ruling. They would be financially penalized if they exceeded that time.