Lower Supports Christie’s Cap 2.5, Beck Questions Interest Arbitration

VILLAS — Lower Township Council, in a 4-1 vote Mon., June 21, passed a resolution supporting Gov. Chris Christie’s call for a constitutional amendment to cap property tax increases at 2.5 percent annually.
Councilman Wayne Mazurek, the lone Democrat on council, cast the sole “no” vote. He said the 2.5 percent cap was “wrong for the township.”
Mazurek said if the cap were enacted next year, it would force the township to cut personnel in public safety, recreation and public works to a point where it is going to be impossible to maintain the current level of township services. He said if Christie enacts the 2.5 percent cap, the township would be short $1 million to fund its budget next year and the only solution would be cutting employees.
“The township has made cuts to its budget close to a ‘bare bones’ level with fewer employees,” he said.
Mazurek said under a 4 percent cap, the township would still lose a couple of police officers next year.
He said Lower Township does not have extremely high taxes compared to surrounding towns and counties.
Councilman Tom Conrad said Christie needed to provide a number of other solutions for municipal budgets referred to as a “toolbox.” He said if the governor provides “tools,” he would support the 2.5 percent cap.
Mazurek said it is possible Christie would not provide “tools” to municipalities and fight for the 2.5 percent cap. He suggested the cap be phased in as the governor phased in financial “tools” for municipalities.
Councilman Glenn Douglass said he agreed with Mazurek that Christie has not supplied “tools,” and phasing in the cap was a good idea.
Deputy Mayor Kevin Lare said all indications are the 2.5 percent cap is coming. He said the township could exceed a 2.5 percent cap with voter approval.
Mayor Michael Beck said he favored the cap as long as the township received the “tool kit.”
Township Council’s resolution contains some conditions for the governor before voters are asked to approve a 2.5 percent cap including statutory reforms relating to binding arbitration, civil service, public employee pensions and benefits, disciplinary procedures, school and special district elections. The township’s resolution notes statutory health benefits reforms must conform future health benefit costs to the 2.5 percent cap.
The resolution notes the cap must allow local units some flexibility to deal with pension costs, utility costs, disaster and emergency response costs and other costs beyond the control of local leaders.
Beck sent a letter to Christie last week in which he said the interest arbitration system in our state needs to be drastically overhauled or eliminated.
“It is the number one municipal economic problem,” said Beck.
Business Dictionary.com defines interest arbitration as “submitting (those) disputes for arbitration that arise from disagreement over what terms or conditions should be included in an agreement.”
In the letter to Christie, Beck said “You cannot compare police salaries/wages in New Jersey by looking at other towns in New Jersey. All the towns are in the same boat. Therefore, I will use Philadelphia, a department I know well since I retired from there as a police lieutenant in 1995. Our town budget this year is approximately $24 million, and I estimate that the extra money, if we had the same salary/benefit package for our police as Philadelphia does, is over $2 million.
The analysis comes from the following: salaries: our median W-2 this past year was $95,000. Our town simply cannot afford this. If you compare with Philadelphia, our base salaries in Lower Township are $25,000 higher per officer. This alone, in a force of 43 officers, generates an additional cost to our town of over $1 million. A 2.5 percent cap on arbitration awards will not reduce the cost of our Police Department; it will merely limit the rate of increases. The only way to reduce the cost is to allow the municipalities to seek reductions through collective bargaining without having to worry about the hammer of interest arbitration.”
In the letter, Beck said he supported the governor’s attempt to limit terminal leave to $15,000 per person but it must cover all existing employees to have any real impact.
“In Lower Township, we have an unfunded liability of more than $1.6 million because of the terminal leave payments that will be paid to retiring officers,” he said.
Beck suggested a minimum retirement age for police officers of 50 years old instead of 45.
“When a police officer retires at age 45 with a health benefit package costing close to $20,000 per year, it adds another $400,000 for each officer before you even factor in the additional increases plus the cost of benefits past age 65. Accordingly, there needs to be legislative reform that limits the amount of post retirement benefits that municipalities can provide,” said Beck in his letter to Christie.
The mayor noted in the past two years, through attrition the township reduced its workforce by almost 10%.
“As I have said publicly, “What do you want, 40 officers at $100,000 or 50 officers at $80,000?” The problem is, our residents deserve the 50 officers but we cannot afford these salaries.”
Beck asked if it is fair to correct past problems on the backs of the future workforce.
“Do you want a workforce where people are paid differently for doing the same job? And is it fair to ask the other unions to share a larger part of the burden than the police who are protected by the binding arbitration? Should the other unions alone pay 25% of the health care premium cost? Binding arbitration not only inhibits our ability to control police contracts, but those of all the other employees,” said Beck in the letter.
At Monday’s meeting, Beck said until the township can bring salaries under control, there would be fewer township employees. He said through interest arbitration, holding someone who is earning $95,000 per year to a 1 percent increase is not going to help the township.
Lower Township Taxpayers Association President Janet Pitts said the organization endorsed the cap. She said neither school or town consolidations took place under the Corzine Administration.
Pitts said the 2.5 percent cap would force municipalities to look at consolidating with neighboring towns and using more shared services. Whatever became of a proposal of a countywide police dispatch system here, she asked.