TRENTON, N.J. – When pressed by Assemblyman Ned Thomson at Monday’s budget hearing, Lt. Gov. Sheila Oliver revealed the Murphy administration has yet to even discuss the 2 percent arbitration cap, which was allowed to expire at the end of 2017 even though it was widely credited for keeping down property taxes.
“We also have another problem, the arbitration cap has run out,” said Thomson (R-Monmouth). “What does the state intend to do with the arbitration cap at this particular point?”
Oliver responded, “I have not participated in any discussions with the administration as it relates to the arbitration cap. I have not heard from anyone, in terms of the hierarchy that I report to, anything as it relates to the cap.”
The 2 percent arbitration cap on annual raises for police officers and professional firefighters coincided with a permanent 2 percent property tax levy cap. Now that the arbitration cap has expired, municipalities are forced to reduce or eliminate services or seek voter approval to exceed the property tax cap to fund an arbitration award, which have been as high as 5.65 percent.
Thomson asked if the administration would support a reinstatement of the cap.
“I have not heard a thing,” Oliver said.
Moody’s Investors Service has called the expiration of the cap credit negative for all municipalities.