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correct size blogOn September 28, the 2017 Report of the Governor’s appointees to the Police and Fire Public Interest Arbitration Impact Task Force was released. The report was issued, following the Task Force’s September 25 meeting, where the eight-member committee was deadlocked on adopting the report and delivering it to the Governor and Legislature. All four of the Governor’s appointees supported the adoption and release, while all four legislative appointees were against the adoption and release. The Governor’s appointees decided that the “information was too important to keep from the public” and released the report.

Click here for the report.

And click here for the copy of the report tabs, which includes significant and relevant data.

The Legislative appointees, who are all public safety union representatives, released a statement denouncing the release of the report without their consent.    The Legislative appointees stated that at the same September 25 meeting, a motion was also “made to obtain additional information to provide a clear and concise final report.”   That vote resulted in a 4-4 tie, as well.

The Governor’s appointees to the Police and Fire Public Interest Arbitration Impact Task Force made the following recommendations:

  • Permanently impose the 2% cap well in advance of the current December 31, 2017, expiration.
  • Eliminate the dynamic status quo doctrine to require that increment and longevity schemes cease upon the expiration of a collective negotiations agreement.

This most recent report continues to again demonstrate what the previous Interest Arbitration Task Force reports found; that the “amendments have had a profound effect on limiting interest arbitration to a procedure of last resort, leaving it to the parties to settle labor contracts through direct negotiation and within budgetary constraints.”

In addition, the underlying data continues to show that Interest Arbitration cap works and has not adversely impacted crime rates or recruitment of public safety personnel. In fact, the report also found that while the rates of the police and fire salary increases have slowed, New Jersey firefighters’ average salaries remain the highest in the nation while police officers’ salaries are the second highest in the nation.

The report noted that from 2012 to 2016 there was 90 interest arbitration awards. 36 of the 90 awards were subject to the 2% cap, with an average salary increase of 1.6%. Over the same period of time, 46 voluntary settlements were reached with an average increase of 1.80%.

Using Civil Services data, the report found that there has been an increase in the number of individuals taking both the police and fire exams – a 43% increase in the number of applicants and eligible candidates for police and a 90% increase in the number of applicants and eligible candidates for fire. The increase in candidates is at a time when NJ’s unemployment rate dropped from 9.5% to 5%.

In addition, the caliber of candidates has not suffered. In fact the number of applicants with Bachelor’s, Master’s or Doctorate degrees has increased as follows:

Police:

Year Applicants Admitted to Exam Eligible Candidates Applicant with Bachelor’s Degree Applicants with Master’s or Doctorate
2010 (Pre cap) 26,066 25,526 18,568 4,941 311
2013 (cap) 27,852 26,763 20,443 6,016 511
2016 (cap) 37,393 36,117 26,696 7,812 608

Fire:

Year Applicants Admitted to Exam Eligible Candidates Applicant with Bachelor’s Degree Applicants with Master’s or Doctorate
2010 (Pre cap) 18,170 17,606 6,392 1,984 116
2015 (cap) 19,075 18,365 12,272 2,988 229

 

The report found that using data from the Division of Pensions, the average annual pay for all police pre-cap (2006-11) increased 18.3%, from $75,301 to $89,066. Post cap (2011-16) it increased 4.8%, from $89,066 to $93,360. In addition, using data from the US Bureau of Labor Statistics from 2012-14, the report found that the average mean wage of police in New Jersey was the highest in the nation. In 2015-16, New Jersey moved to 2nd place behind California.

For all fire personnel, using data from the Division of Pensions, the report found that the average annual pay for all fire pre-cap (2006-11) increased 21.8%, from $78,079 to $95,107. Post cap (2011-16), it increased 4.8% from $95,107 to $99,674. In addition, using US Bureau of Labor Statistics data, from 2013-16 the average mean wage of fire service employees in New Jersey was the highest in the nation.

In regards to crime rates the report found, using data from the Uniform Crime Report, that crime rates fell before and after the cap. Precap (2006-11), there was a 5.8% decrease in crime rates. Post cap (2011-16), crime rates decreased by an additional 22.3%.

Finally, while noting that “it was impossible to cull out and quantify the precise impact of any single one of the major reforms enacted in 2010 and 2011, the dramatic significance of the arbitration award and property tax caps is undeniable.” The report found that the average annual increase in municipal property taxes from 2005-10 (pre-cap) was 7.19% or $129 average per year per taxpayer, compared to 2.41% or $56 per year per taxpayer from 2011-16.

Once again, the underlying data reaffirms the continued success of the interest arbitration cap in containing property tax increases and facilitating negotiations between local governments and the respective public safety unions, including a reduction in the number of petitions, a reduction in open interest arbitration matters, and a reduction in appeals. Further, the data demonstrate that not only has the number of recruits for both police and fire increased, but the number of applicants with Bachelor, Master or Doctorate degrees has also increased, and crime rates have continued to fall.

It is imperative that the Legislature take prompt action to extend the cap when they reconvene. The possible sunset of the interest arbitration cap in December is of great concern, and we look forward to working with our state and public safety union leaders on this issue.

Contacts:

Michael Cerra, Assistant Executive Director, mcerra@njslom.org, 609-695-3481 x120;
Lori Buckelew, Senior Legislative Analyst, lbuckelew@njslom.org, 609-695-3481 x112.

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