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Sweeney & Oliver Unveil Key Arbitration Reform Emphasizing Fairness To Taxpayers

(TRENTON) – Senate President Stephen M. Sweeney and Assembly Speaker Sheila Y. Oliver on Thursday unveiled new property tax reform legislation that would revise the state’s arbitration system by requiring the emphasis be placed on protecting taxpayers.

In announcing the legislation, the Democratic legislative leaders noted the overhaul is necessary and overdue to put the system back in balance.

“Rare, outlandish arbitrator awards that have caused property taxes to spike in some communities do stand out and have made a strong case for reform,” said Sweeney (D-Gloucester/Cumberland/Salem). “This reform will return much needed balance to a system that desperately needs it. When I stood with the Governor in July, I said the Senate would give local officials this vital tool, and here we are.”

“Our arbitration system simply isn’t working and must be changed,” said Oliver (D-Essex/Passaic). “All too often we’ve seen arbitrators award pay increases without respect for the fiscal reality and what the taxpayers can afford. It’s time we changed this broken system for the better. This long-term reform will not undo the damage done by the governor’s ill-advised cuts in state aid and rebates, but it’s a major step in the right direction to benefit New Jersey property taxpayers.”

The Assembly Budget Committee is slated to move the arbitration legislation (A-3393) later Thursday.

Oliver said the full Assembly will consider the legislation on Monday.

“This legislation will go a long way toward controlling and constraining property taxes by turning the arbitration process upside down and finally forcing the focus to be on the fairness to taxpayers,” said Assembly Budget Chairman Lou Greenwald (D-Camden), who has been working to craft the legislation. “This bill is about leveling the playing field and requiring arbitrators to finally respect the taxpayer. This bill puts property taxpayers first. It’s that simple.”

Sweeney said the Senate’s state government panel would consider the measure in early November, with a final floor vote scheduled for Nov 22.

Among its provisions, the arbitration bill would:

• Establish “last offer” as the terminal procedure for resolving contractual impasses between public employers and their police and fire departments, under which each side would present their final offer, with the arbitrator selecting one as the final agreement. This form of arbitration is generally viewed as forcing both sides in a dispute to be more realistic in their proposals and less likely to freeze negotiations prior to the arbitration stage.

• Make the new two-percent property tax levy cap a key item for consideration by an arbitrator when making decisions.

• Require arbitrator decisions to be accompanied by a written report explaining in detail how each of the statutory criteria played into their determination of the final award. Such report shall certify that the arbitrator took the local levy cap into account in making the award.

• Change the process for selecting an arbitrator for interest arbitration to ensure a more varied and impartial group of arbitrators makes decisions.

• Change the process by which judgments are appealed.

• Require arbitrators to meet stringent professional responsibility, impartiality and ethics and guidelines.

The reform would be a sea change from the current arbitration rules, in which contractual impasses are resolved through conventional arbitration, and where arbitrators have broad authority to freely construct final awards that can include elements of each parties’ proposals and do not explicitly need to take property tax limitations into consideration.

Both leaders called on the Governor to do more to urge local officials to work together to create the shared service partnerships that can pay immediate dividends for property taxpayers. They said the Governor needs to take a tough stance with mayors who refuse to work with their neighbors for ways to deliver services in a more cost-effective and efficient manner, and should encourage more countywide service-delivery options.

“Many bills in the governor’s plan are worthwhile but unfortunately they aren’t going to provide major help to New Jersey homeowners beleaguered by property taxes for far too long,” Oliver said. “That’s why we’re going to continue pushing reform measures and developing new ones to benefit taxpayers. This is a complicated issue and it’s worth doing the right way.”

“While helpful, the tool kit is by no means the cure for high property taxes, and in fact may take years to have any real and significant impact,” said Sweeney. “New Jersey would benefit far more if the Governor spent more time pressing shared services and consolidations that could save millions of dollars next year alone. The Governor and mayors must be honest with property taxpayers about how much the toolkit will actually lower their taxes, and not pin their hopes on tool kit manna from Trenton.”

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