The latest bill, introduced by Bergen County Staten Senator Gerald Cardinale, would freeze the line item municipalities and school boards set aside for salaries and benefits for three years. After three years, this number would only be permitted to rise according to cost of living. Cardinale believes this will allow private sector wages and benefits to "catch up" with those in the public sector.

"We need to get the balance back and the property taxpayers are taking it on the chin," said Cardinale.

Rutherford Mayor John Hipp and East Rutherford Mayor Jim Cassella agreed with Cardinale’s intentions, but not his methods, pointing to statewide "binding arbitration" laws for public safety personnel as the culprit in skyrocketing taxes.

Lyndhurst Mayor Richard DiLascio disagreed with Cardinale, believing the state should either handle contract negotiations with local employees itself or allow towns to handle their own budgets as they see fit. North Arlington Councilman Al Granell is not convinced Cardinale’s plan would work and advocates a change in the way the state handles its salary and benefit accounts before mandates are handed down to municipalities.

Carlstadt Councilman Joe Crifasi supported Cardinale’s idea entirely, stating that such a measure would take pressure off of the towns and create a meaningful way to reduce property taxes.

Salary freeze

If enacted, Cardinale’s proposed salary freeze would not freeze salaries for individual employees, nor would it change existing contracts between towns and their employees. The measure would put pressure on municipalities to either layoff workers, enact a hiring freeze, encourage retirements or even renegotiate existing contracts to hold the line on increases.

River Edge Mayor Peg Watkins suggested the idea to him, claiming she had "big budget problems" and wanted the tools to turn around and combat tax increases. Watkins could not simply lower salaries across the board because labor arbitration, the way employees resolve disputes in the event of a standstill in negotiations, would wind up costing the taxpayers additional money in legal fees.

Towns must split the cost of arbitration with labor unions and, particularly in binding arbitration, state-sanctioned arbitrators award municipal salary increases based on salary increases in similar towns. This makes it very difficult for towns to get tough with labor unions. "No individual town can buck the system on its own, therefore they need some help," said Cardinale.

All area mayors believe arbitrators side with labor unions more often than with towns on contract disputes. "Typically municipalities that try to hold the line when facing arbitration end up losing," said Cardinale. "This gives them an opportunity to protect the taxpayer and not give in."

Hipp applauded Cardinale for his concern, but believed an unintended consequence of the bill would be punishing towns that operate efficiently. "We have a constitutional obligation to provide a certain level of service in our community," said Hipp.

If communities with tight staffs and modest salaries have to create further layoffs, it could lead to inefficiency, said Hipp. Hipp and Cassella advocate the state revisiting binding arbitration laws.

Cassella questioned how a town could deal with an additional impact to the town, such as the Meadowlands Xanadu retail and entertainment complex slated to open in East Rutherford this November. While state police will handle Xanadu itself, spillover traffic and activity in the borough would fall on the local police and Cassella believes they’ll need additional officers.

"I would love to be able to not spend more than last year," he said. "Trying to keep the line items even for three years, that’s a good thing, but I don’t see how you implement it."

Lyndhurst will soon open a new town pool and needs to hire people to run it, making DiLascio wary of a salary freeze.

DiLascio thinks the plan will never pass through the legislature without loopholes and opportunities for the local finance board or other agency to grant waivers to towns that need it, creating another layer of bureaucracy and potentially negating the money-saving purpose of the bill.

Granell believes the state should look at its own house when looking to save money, noting that the state reaches into small town’s pockets when it comes to marriage licenses, dog licenses and court fees. State-mandated pension payments are more to blame than rising salaries approved by towns, according to Granell. "It’s easier for Trenton to pass the blame to the towns for spending rather than look into the mirror and fix the problem there first," he said.

Terminal pay

In 2006, the State Assembly and Senate introduced a total of five bills that would cap retirement pay outs for municipal and school board employees. None have been passed into law. The State of New Jersey caps pay outs for accumulated sick leave at $15,000.

Individual municipalities may place limits on sick leave, but few, and none in southern Bergen County, do. Cassella does not mind having the ability to give pay outs to borough employees because it works as a tool to entice employees to retire early, thus saving money in the long run.

Police in East Rutherford automatically receive six months back pay, a measure worked into their contract with the town prior to Cassella’s tenure as mayor.

Crifasi supports the idea of capping accumulated sick leave, along with salary account freezes, believes it would take the pressure off of local towns trying to keep taxes down. "I support these things because they are across the board," he said.

Hipp echoed Crifasi’s support and said Rutherford is looking into an ordinance to do just that. Support from the state would make passing such an ordinance easier from a legal standpoint, he added.

Last year, Rutherford had to pay out $500,000 in lump sum to pay for the unused sick time, personal days, vacation days and terminal pay of the former police chief and captain. "Towns can’t take those kinds of hits," said Hipp.

While on the school board, DiLascio helped negotiate a $15,000 cap on sick leave reimbursements to retirees for school board employees. DiLascio felt the proposed bill takes away for local home rule and proposed other ways of reducing salary accounts. Lyndhurst is exploring the possibility of creating trust accounts when a high-salaried police officer retires and is replaced by an officer with a modest salary. The difference would be placed into an account, gain interest and be used to pay for pensions and health benefits for retirees in the future.

A tough sell

Cardinale believes bills like these tend to be shot down in the legislature because of the level of organization labor unions have in New Jersey. "If a municipality or school board is gonna spend less, some individuals are going to get less money. Those people pay a lot of attention and are highly organized," he said. "They tend to be vocal and they tend to be politically connected."

Meanwhile, taxpayers themselves tend to be less organized and vocal. "The average person who is beset by their property tax bill is less aware of these kinds of measures," he added.

Still, local mayors have not thrown support behind these bills even with the taxpayers’ interests in mind. "Just capping stuff blanketly and not thinking about how it works doesn’t make much sense," said DiLascio.