Action needed to address ‘bono fide severance of employment’ problem

During Wednesday’s Mayors’ Day session, Alpine Mayor Paul Tomasko asked State Legislative leaders about a matter that is important to municipalities all around our State. It involves the ability of retired public employees to continue to serve their fellow citizens, in volunteer capacities.

In 2014, the State’s Division of Pension and Benefits issued guidance on post retirement employment restrictions for public employees.  The guidance noted that there must be a “bona fide severance of employment”, a complete termination of the employee’s employment relationship with the employer for a period of at least 180 days, in order not to jeopardize the employee’s retirement benefits.  The Division considers re-employment by a different unit of the same public entity, whether the position is covered by the same retirement system or a different retirement system, to be employment by the same employer. If an employee holds more than one position with the employer they must separate from all employment in order to retire, even if the positions are covered by different retirement systems, or the second position is not subject to pension contributions.

If an individual returns to public employment with the former employer, even as a volunteer,  prior to satisfying the requirements of a bona fide severance from employment, the employee will be required to repay all retirement benefits received from the date of retirement and may be required to re-enroll in the same or different retirement system.  As a result, volunteer firefighters and first aid members, and volunteer parade, event or celebration committee members or volunteers serving the PTA, to name a few; who were also public employees, have been required to resign from their volunteer position in order to receive their retirement benefits.

Volunteers are the backbone of communities providing services to the residents at no cost to taxpayers while freely giving of their time and expertise.  Employees affected by the Division of Pensions ruling generally are at least 55 years of age. In their volunteer positions, they often serve as mentors to the new and younger members, typically providing guidance and direction.

While well intended the Division of Pensions has created an unintended consequence which, if not changed, will impact every public employee who volunteers in the state and will not only drive up property taxes, but would also reduce the quality and level of essential public services.

In November, 2014, the League of Municipalities adopted a Resolution, urging action to direct the Division of Pension and Benefits to permit retirees and local elected officials to continue as volunteers, without impact to their retirement, and to not require the complete 180 day separation from volunteer service.

In response, two pairs of companion bills have been introduced.

Last year, the State Senate unanimously passed S-2107 (companion to A-536), which would permit a person with a pre-existing volunteer relationship as a firefighter or first aid with their employer to retire from service covered by PERS or PFRS and continue to serve that employer as a volunteer.  We support this bill, which would address part of the problem.

Other legislation, however, goes all the way in resolving the problems created by the Division of Pensions’ ruling on ‘bono fide severance.’

A-3223/S-2446 would allow public employees in state-administered retirement systems who continue any preexisting volunteer relationships with employers from whom they retire, to continue to volunteer for their prior employers without jeopardizing their pensions.  Legally speaking, this bill would clarify that such a relationship does not vitiate a bona fide retirement.

S-2107, A-536 and A-3223 all await action in the Assembly State and Local Government Committee. S-2446 has been referred to the Senate State Government, Wagering, Tourism and Historic Preservation Committee.

We commend the sponsors of these bills and would urge action to remedy the problem, once and for all.

Contact:  Mike Cerra, Asst. Executive Director, mcerra@njslom.org or 609-695-3481 x120.

Executive Order on Sanctuary Cities/Immigration Enforcement

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On January 25 President Donald Trump issued an Executive Order on “Enhancing Public Safety in the Interior of the United States.”  The Executive Order takes steps to “ensure the public safety of the American people in communities across the United States as well as to ensure that our Nation’s immigration laws are faithfully executed.”

That same day, the National League of Cities (NLC), the national affiliate of the League, hosted a conference call with most State League executive directors and NLC staff to identify concerns and questions with the Executive Order.  It is unclear if there is a new affirmative obligation to provide local law enforcement personnel to conduct immigration investigations, which potentially creates an unfunded mandate.  It is also unclear what is considered to be a sanctuary jurisdiction.  It appears they are reinstating the Secure Cities program but it is further unclear whether participation will continue to be voluntary or mandatory.  There is uncertainty regarding what federal funds and how much federal funds are at stake.  It is also unclear regarding the impact on previous legally declared sanctuary jurisdiction.

NLC will engage with the administration to get answers and clarification on the executive order on various outstanding questions and concerns with the Executive Order.   As we learn more detail we will continue to advise you.

The Executive Order:

  • Gives the Secretary of Homeland Security (Secretary) up to 1 year to issue rules and guidance to ensure the assessment and collection of all fines and penalties from individuals unlawfully in the country and from those who facilitate their presence;
  • Directs the Secretary to engage with Governors as well as local officials to enter into section 287(g) agreements, which allows the US Immigration and Customs Enforcement (ICE) to enter into agreements with state and local law enforcement agencies and train officers to carry out immigration law enforcement functions;
  • Instructs the Secretary, with the consent of local officials, as appropriate, to take appropriate action to authorize State and local law enforcement officials to perform the functions of immigration officers in relation to the investigation, apprehension, or detentions of individuals illegally in the United States;
  • States that any agreement structured by the Secretary shall ensure that any jurisdiction that fails to comply with applicable federal law does not receive Federal funds, except as mandated by law;
  • Requires the Secretary to prioritize removal of individuals illegally in the United States based on federal statute;
  • Obliges the Attorney General and the Secretary to ensure that jurisdictions that willfully refuse to comply with 8 U.S.C. 1373, which states that a Federal, State or local government entity or official may not prohibit, or in any way restrict, any government entity or official from sending to, or receiving from, the Immigration and Naturalization Service information regarding the citizenship or immigration status, lawful or unlawful, of any individual;
  • Directs the Secretary to hire 10,000 additional immigration officers;
  • Requires the Secretary to weekly make public a comprehensive list of criminal actions committed by individuals illegally in the United States and any jurisdiction that ignored or otherwise failed to honor any detainers;
  • Directs the Office of Management and Budget to obtain and provide relevant and responsive information on all Federal grant money that is currently received by any sanctuary jurisdiction;
  • Directs the Attorney General and the Secretary to develop and implement a program to ensure that adequate resources are devoted to the prosecution of criminal immigration offense in the United States;
  • Directs the Secretary to establish within ICE an office to provide proactive, timely, adequate, and professional services to victims of crime committed by removable individuals illegally in the United States and requires quarterly reporting studying the effects of victimization by criminals illegally in the United States;
  • Requires the Attorney General and the Secretary to submit a 90 day report and 180 report on the progress of the directives under the Executive Order.

Depending on how the Executive Order is implemented, the Order could raise Constitutional concerns.

In 1984, the United States Congress passed the National Minimum Drinking Age Act, which withheld 5% of federal highway funding from states that did not maintain a minimum legal drinking age of 21. South Dakota, which allowed 19-year-olds to purchase beer containing up to 3.2% alcohol, challenged the law, naming Secretary of Transportation Elizabeth Dole as the defendant.

In its 1987 decision, the Supreme Court held that the statute represented a valid use of Congressional authority under the Spending Clause and that the statute did not infringe upon the rights of the states. The Court established a five-point rule for considering the constitutionality of expenditure cuts of this type:

  1. The spending must promote “the general welfare.”
  2. The condition must be unambiguous.
  3. The condition should relate “to the federal interest in particular national projects or programs.”
  4. The condition imposed on the states must not, in itself, be unconstitutional.
  5. The condition must not be coercive.

Writing for the majority, Chief Justice William Rehnquist wrote that the Congress did not violate the Tenth Amendment because it merely exercised its right to control its spending. Rehnquist wrote that the Congress did not coerce the states because it cut only a small percentage of federal funding. It thus applied pressure but not irresistible pressure.

And more recently, in NFIB v. Sibelius (2012), Chief Justice Roberts famously described the federal government’s plan to withhold all Medicaid funding, if states refused to agree to the Obamacare Medicaid expansion as a coercive “gun to the head.” In that case, states stood to lose over 10 percent of their overall budget by not agreeing to the Medicaid expansion. Many sanctuary jurisdictions would stand to lose that percent of their budget—and more—if they lost all federal dollars.

NLC will engage with the administration to get answers and clarification on various outstanding questions and concerns with the Executive Order.   As we learn more details we will continue to advise you.

Contact:

Michael Cerra, Assistant Executive Director, mcerra@njslom.org, 609-695-3481 x120.

League statement on Supreme Court “gap” Ruling

Today the New Jersey Supreme Court in a unanimous but nuanced ruling affirmed but modified the Appellate Division’s July 11 decision, which reversed a lower court’s misinterpretation of the Fair Housing Act by assigning a new and unrealistic affordable housing obligation on municipalities.

This is a complicated decision, which will be discussed and debated for months to come.  But there are some readily made observations:

  • The Supreme Court affirmed but modified the Appellate Division ruling.  In doing so, the Court further expanded the Mount Laurel doctrine to include a new obligation on municipalities, which will be folded into present need. The Court wrote:

“…the trial courts must employ an expanded definition of present need.   The present-need analysis must include, in addition to a calculation of overcrowded and deficient housing units, an analytic component that addresses the affordable housing need of presently existing New Jersey low-and-moderate income households, which formed during the gap period and are entitled to their delayed opportunity to seek affordable housing.”  (Page 31 of decision.)

  • At the same time, the Court rejected the arguments of certain housing advocates and developers to further expand the “gap” obligation and double count certain households.    The Court wrote,

The trial court must take care to ensure that the present need is not calculated in a way that includes persons who are deceased, who are income-ineligible or otherwise are no longer eligible for affordable housing, or whose households may be already captured through the historic practice of surveying for deficient housing units within the municipality.” (Page 31 of decision.)

  •  The Court ruling, however, has added to a very complicated, process, which will require the expenditure of further resources at the local level. The Court in this decision once again invited the Legislature to revisit the issue and provide necessary reforms.

The so-called “gap” period does not result from any failures of local government.  This “gap issue” arises out of Council on Affordable Housing’s inability to promulgate third round regulations from 1999 to the present or make any final determination as to state and regional housing need, as well as constant litigation by certain groups    The Fair Housing Act defines a municipal obligation to include present and prospective need, and when it has developed a plan to address both those needs, a town should be deemed compliant and allowed to proceed.

League Executive Director Michael J. Darcy, CAE offered the following comment:

“While the Supreme Court attempts to forge a middle ground, this decision is vague as to how to determine this additional present need obligation.   Thus, the ruling provides little guidance and will likely result in additional property tax resources being expended.    We again call upon the Administration and Legislature to craft long-overdue reforms and promulgate a reasonable, rational state housing policy.”

 

Contact: Michael Cerra, Assistant Executive Director at 609-695-3481 ext. 120 or mcerra@njslom.org

 

Follow the League on Twitter at: http://twitter.com/NJ_League

Federal Infrastructure Policy Will Impact New Jersey Municipalities

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Local officials appreciate the need to keep an eye on policy developments in our State’s and our Nation’s Capitals. In our Federal system, many decisions made on other levels of government inevitably have consequences for municipalities. As the 115th Congress and the 45th President begin to shape America’s future, New Jersey Mayors and municipal governing body members will need to react to any proposals that could help, or hinder, their ability to meet the needs and promote the interests of their citizens.

One area of interest is investment in our decaying infrastructure.

President-Elect Donald Trump has vowed to deliver a major rebuilding package to Congress within his first 100 days in office. He has called for transportation investments, ranging, on different occasions, from $500 billion to $1 trillion.

His nominee to lead the U.S. Department of Transportation, Elaine Chao, echoed the call to repair the nation’s crumbling infrastructure, during her confirmation hearings, last week. At that time, she indicated that one of her top priorities will be to establish an infrastructure “task force.”

But, aside from the promise of fast action and a proposed level of investment, the Administration has yet to provide specifics on the plan. Based on reactions from Congressional leaders and on hints provided during the transition, this is what we know so far.

It appears that no consensus on an infrastructure package will take shape during the new President’s first 100 days in office.

Pennsylvania Congressman Bill Shuster, who Chairs the House Transportation Committee, has stated the Congress would consider ways to pay for the program during the first 100 days, then consider specific investment alternatives and enact the infrastructure package over the next 100 days. Speaker Paul Ryan has also indicated that the issue is likely to get addressed later in the year. It seems reasonable to anticipate action on infrastructure investments before Congress’ traditional August recess.

Further, though candidate Trump had called for massive transportation investments, with proposals ranging from $500 billion to $1 trillion, the final package could end up being smaller than those initial figures. Congressional Republican leadership, along with rank-and-file Members, has been suspicious of increased spending and the impact it would have on the deficit.

However, those concerns could be abated by the incoming Administration’s strong preference for luring private sector investments in our Nation’s crumbling infrastructure. The new President believes the private investors can complete projects more efficiently and economically than can the public sector.

During the transition, one possibility that was mentioned would provide $137 billion in federal tax credits to companies that finance transportation projects. It was estimated that this could generate up to $1 trillion in investment over 10 years. Additionally, through Public Private Partnerships, investors could bid on projects, agreeing to build and maintain them for a set amount of time, and recover their costs through tolls or set state payments.

Further, we should expect any new infrastructure program to include a roll-back of any regulatory impediments that add costs and delay swift completion of transportation projects. This is a priority for both the incoming Administration and Congressional Republicans. During her confirmation hearings, Transportation Secretary-nominee Chao expressed support for streamlining regulations in any infrastructure proposal. And House Committee Chairman Shuster also views regulatory reform as an important component of any infrastructure plan, saying there are “hundreds” of regulations that should be repealed.

Finally, the new Chief Executive has vowed to follow “two simple rules” when he is in office: buy American and hire American. That, however, could force a show-down between the Administration and the House leadership. Speaker Ryan dropped a so-called Buy America provision from a waterways bill last year. That provision would have required American steel and iron to be used in certain drinking water projects. Critics of the steel provision were concerned that directing federal funding to American providers would create an artificial system of winners and losers, and that it would increase costs.

Lawmakers from both parties have shown willingness to work with the new Administration on rejuvenating the nation’s aging infrastructure. So, on infrastructure matters, it’s fair to say that our 45th President will be in the driver’s seat.

With that in mind, we note one important component of an infrastructure investment program that, to our knowledge, has been discussed by neither Congressional nor Administration officials. We believe it extremely important that a significant portion of any Federal Aid flow directly to local projects. Local officials are responsible for the vast majority of our State’s vital infrastructure. Yet all too often, revenues funneled through State Treasuries never reach the projects most important to local citizens and businesses.

Let’s hope the specifics that emerge – on transportation and on other infrastructure needs – will allow New Jersey municipalities to better serve the people, and protect the future, of our Garden State. We’ll be watching. You should, too.

Contact:  Jon Moran, Senior Legislative Analyst, jmoran@njslom.org, 609-695-3481 x121.

New Jersey Selected to Take Part in USDA Pilot

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Thanks, in large part, to the efforts of New Jersey Mayors and municipal governing bodies; our State has been selected, as one of three, to participate in a United States Department of Agriculture (USDA) pilot program.

Each day, thousands of New Jersey residents struggle to put healthy food on the table for their families. As of July 2016, there were 858,572 persons in New Jersey receiving SNAP benefits, which is approximately 10 percent of our state’s population.  A significant number of our constituents are dependent on these benefits to provide nutritious and affordable food for their children and families. According to the USDA, 524,000 individuals, or 6 percent of New Jersey’s population, live in food deserts with little access to healthy food options.

We thank those of you who visited the Mayors’ Information Booth at the League Conference in November, where you had the opportunity to sign on to our letter to USDA Secretary Tom Vilsack. In that letter, we urged Secretary Vilsack to include the Garden State in the upcoming two-year pilot that will enable (SNAP) participants to purchase their groceries online. We also thank those of you who responded to our follow-up request on this matter. (Please see our fact sheet on the SNAP pilot program, for further details.)

We thank Senator Cory Booker for involving the League in this effort to include New Jersey in the pilot. We believe that this will bolster the initiative being spearheaded by League President and Bridgeton Mayor Albert Kelly, to ensure better nutrition for children and families living in need of assistance all around our Garden State.

Contact:  Jon Moran, Sr. Legislative Analyst, jmoran@jslom.org, 609-695-3481 x121.

Governor Signs E-Waste bill

Thanks to your efforts and countless county and municipal officials,  we are very pleased to advise you that earlier today Governor Christie signed S-981 into law.

The League supported S-981A-2375, regarding so-called “e-waste.”   Specifically, this legislation would require each manufacturer of “covered electronic devices” to provide for the collection, transportation, and recycling of its market share in weight of all covered electronic devices collected in a program year.

This new law will ensure that manufacturers provide for a “free and convenient” recycling program for all of the covered electronic devices that are collected and further eliminate the need for local governments, and by extension our property taxpayers, to either absorb these costs or eliminate their programs.

Thank you to all who reached out to your Legislators and the Governor on this timely initiative.    Our thanks also to our partners at the New Jersey Association of Counties for their efforts in advancing this legislation.

Keep an eye out for an advisory from the League on this new law.   In the meanwhile,  click here for a copy of S-981.

You can also click here for our earlier blog postings on this new law.

Contact:   Michael F. Cerra, Assistant Executive Director, 609-695-3481 x120, mcerra@njslom.org.

UEZ UPDATE

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February 10, 2017 Update:   We’re disappointed to advise that the Governor vetoed this compromise legislation.    We do thank the the countless stakeholders, including impacted businesses, who joined us in supporting this legislation.   While these 5 zones are expired, 32 more are still in effect and the next expiration is in 2019.     We will continue to work with the Mayors in UEZ communities to enhance the positive economic impacts of UEZs.

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If you have not done so already, click here to ask the Governor to sign the UEZ compromise into law.

On December 20, the State Senate approved  A-4189/S-2670, compromise legislation that will extend, for two years, Urban Enterprise Zone (UEZ) authorization in municipalities where the program is scheduled to sunset at the end of this year. (Those municipalities are Bridgeton, Camden, Newark, Plainfield and Trenton.)  Previously, the NJ General Assembly approved the bill by a vote  of 56-15.

The bill now heads to the Governor for his consideration.  Earlier this year, Governor Christie conditionally voted A-2576/S-1080, which would have extended UEZ designation for participating municipalities for another 10 years.  With his conditional veto, the Governor asked instead that the Legislature direct the Commissioner of the Department of Community Affairs to conduct a study of the UEZ program “… which shall include, without limitation, an assessment of whether an alternative, location-based program to assist fiscally distressed municipalities is appropriate, and, if so, recommendations for the parameters of such a program …”

Respecting the Governor’s desire for a comprehensive analysis of the program, A-4189/S-2670 has been introduced as a compromise. The new legislation accepts the Governor’s recommendation regarding a DCA study of the program and research into alternatives. However, the bill provides a two year extension to the five UEZs that are set to expire at the end of this year.

The UEZ Program – first created in 1983 – offers incentives to participating businesses, designed to encourage business growth and stimulate local economies. Approximately 6,800 certified UEZ businesses participate and benefit from the advantages of the UEZ program statewide. These include a number of tax and financial incentives, including tax credits to hire local workers. The program authorizes qualifying retail businesses in the UEZs to charge and collect the State’s sales and use tax at one-half of the normal rate.

Those incentives allow businesses to attract customers to, and create employment opportunities in, economically distressed municipalities. UEZ designation is a vital tool in the tool kit of local leaders, working to bring their communities back from decades of decline, caused by housing and transportation policy decisions over which they had no control.

Absent action on these bills, businesses in five municipalities will lose UEZ benefits at the year’s end.

Contacts:    Michael F. Cerra, Asst. Executive Director, 609-695-3481, x120, mcerra@njslom.org

Jon Moran, Sr. Legislative Analyst, 609-695-3481 x121, jmoran@njslom.org

 

Support S-2670/A-4189, Extends UEZ authority in certain municipalities

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On Monday, November 21, the Assembly passed A-4189, a compromise bill that will extend, for two years, Urban Enterprise Zone (UEZ) authorization in municipalities where the program is scheduled to sunset at the end of this year. (Those municipalities are Bridgeton, Camden, Newark, Plainfield and Trenton.) The vote in the Assembly was 56-15.  The Senate Economic Growth Committee will consider this bill on December 12.

Earlier this year, Governor Christie conditionally voted A-2576/S-1080, which would have extended UEZ designation for participating municipalities for another 10 years.  With his conditional veto, the Governor asked instead that the Legislature direct the Commissioner of the Department of Community Affairs to conduct a study of the UEZ program “… which shall include, without limitation, an assessment of whether an alternative, location-based program to assist fiscally distressed municipalities is appropriate, and, if so, recommendations for the parameters of such a program …”

Respecting the Governor’s desire for a comprehensive analysis of the program, S-2670/A-4189 has been introduced as a compromise. The new legislation accepts the Governor’s recommendation regarding a DCA study of the program and research into alternatives. However, the bill provides a two-year extension to the five UEZs that are set to expire at the end of this year.

The UEZ Program – first created in 1983 – offers incentives to participating businesses, designed to encourage business growth and stimulate local economies. Approximately 6,800 certified UEZ businesses participate and benefit from the advantages of the UEZ program statewide. These include a number of tax and financial incentives, including tax credits to hire local workers. The program authorizes qualifying retail businesses in the UEZs to charge and collect the State’s sales and use tax at one-half of the normal rate.

Those incentives allow businesses to attract customers to, and create employment opportunities in, economically distressed municipalities. UEZ designation is a vital tool in the tool kit of local leaders, working to bring their communities back from decades of decline, caused by housing and transportation policy decisions over which they had no control.

Please SUPPORT S-2670/A-4189. Absent action on these bills, businesses in five municipalities will lose UEZ benefits at year’s end.

For more, click here to read our post of September 23 and November 7 update. 

Contacts:

Michael Cerra, Asst. Executive Director, mcerra@njslom.org, 609-695-3481 x120

Jon Moran, Sr. Legislative Analyst, jmoran@njslom.org, 609-695-3481 x121

N.J. Supreme Court Issues Decision that Narrows Previous Ruling on Labor Negotiations

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The issue over whether or not municipalities must negotiate temporary layoffs during periods of economic distress is back on the table. On November 29, the New Jersey Supreme Court decided IMO Robbinsville Twp BOE v. Washington Twp Educ. Assoc. , in the plaintiffs’ favor. Docket No. A-32-15 (2016).  IMO Robbinsville BOE sharply narrows the Court’s 2015 decision in IMO Borough of Keyport. 222 N.J. 314 (2015).

In Keyport, the Court upheld temporary layoffs by three Civil Service communities that were done pursuant to Civil Service regulations. At the time, Civil Service regulations allowed temporary layoffs during periods of economic distress. And, the Court held that such layoffs, and the regulations that allowed them, represented a “managerial prerogative” that could supersede required negotiation with public employees.

In Robbinsville BOE, the Court clarified that its decision in Keyport turned on the existence of applicable Civil Service regulations that allowed temporary layoffs during periods of economic distress. Ibid., Slip. Op. at 14-15. In Robbinsville BOE, the school district had argued that Keyport’s holding expanded beyond just Civil Service communities. The Robbinsville Court clarifies that this interpretation is incorrect and that Keyport’s impact is much more limited.

While the prospects for an economic downturn in the near future may be slight, non-civil service municipalities should understand the risks associated with this decision. Without further legislative or regulatory action taken on the state level, akin to the Civil Service regulations in Keyport, these towns may be stuck between a rock and a hard place.

A copy of this decision can be found here.

Contacts: Edward Purcell, Esq., Staff Attorney, epurcell@njslom.org, 609-695-3481 x137,

Michael Cerra, Assistant Executive Director, mcerra@njslom.org, 609-695-3481 x120.