On Deck: Christie Toolkit Next at Bat in Trenton

Collective Bargaining Rights, Sick leave at Retirement, and Additional Salary Caps at Issue this Summer

July 13, 2010

The State Assembly finalized the 2.0 property tax cap legislation July 12 by approving Governor Christie’s conditional veto of S-29/A-3065 by a vote of 74 supporting and 4 opposing the revised legislation. The property tax levy cap legislation will raise difficult challenges for New Jersey school budgets next year. The legislation imposes a 2.0% cap on the tax levy of school and municipal budgets with limited exemptions for pension costs above 2.0%, health care costs (only for the amount of increases between 2.0% and the average cost increase in the State Health Benefits Plan), capital costs including debt service and expenses resulting from a state of emergency as determined by future regulation. The legislation does adjust for some enrollment changes as well by the existing statutory formula. NJPSA testified at all public hearings seeking additional exemptions or waivers for high costs items outside district control including special education, existing contracts, opening a new facility and energy costs.

The cap legislation is the centerpiece of Governor Christie’s Toolbox to reduce local property taxes. Its quick passage has opened the door for consideration of the remaining bills in the Christie Toolkit.

In fact, in a radio interview July 12, Gov. Chris Christie said he will try this fall to scale back pensions and health benefits for current employees, which would go a step further than changes put in place back in March. Christie said "real pension reform" is needed to put the state "back on track" and improve the economy.

"I have nothing against people who work in the public sector," he said this morning on WABC-AM. "They work hard, they're fine folks, and they're doing a good job, in the main, for the people of our state. But there should be no sector of our society that is shielded from this recession at the expense of all the rest of our society."

Christie repeated his view that the state needed to go further during the interview and touched on his belief that New Jersey is a split society where public employees are shielded from the effects of the recession while private sector employees suffer.

Legislative leadership in both houses have also indicated that this legislative package will be considered this summer for possible passage by the Fall.

NJPSA has concerns that much of the Toolkit legislation, if enacted, will seriously impact the collective bargaining rights of our membership. We urge our members to become familiar with several pieces of legislation as detailed below. As we move forward in the legislative process we will be asking you to join us in advocating for the maintenance of a fair and balanced process of collective bargaining in New Jersey schools.

Although the caps listed in the legislation include a 2.5% cap, that number may change in light of the 2.0% cap enacted July 13.

Toolkit Legislation

A-2961 (Handlin, Casagrande) – Authorizes executive county superintendent of schools to require implementation of shared services arrangements and to approve school district collective negotiations agreements prior to execution of agreement.

Amends N.J.S.A. 18A:7-8 to authorize Executive County Superintendents of Schools (ECS) to require a district to enter into a shared services arrangement with another district, a municipality, the county, or other unit of local government within that county for the provision of administrative, business, purchasing, public or nonpublic pupil transportation, or other school district service if the arrangement will result in cost savings for the districts or other units of local government involved.

Also requires the ECS to review and approve all collective negotiations agreements in school districts within the county prior to the execution of those contracts in accordance with standards adopted by the Commissioner of Education. The standards adopted by the commissioner will include:

a required number of work days per year for school district employees; and
a minimum number of hours per day of pupil contact time for teachers.

The ECS may not approve a collective negotiations agreement if it fails to comply with the standards or includes salary, wages, and other forms of compensation that would cause the school district to exceed its tax levy growth limitation or prohibits the subcontracting of school district services.

A-2952 (Casagrande, Munoz) – Limits unused sick leave pay and vacation leave carry-forward for school and local employees; permits local unit to pay certain benefits over 10 years; limits sick leave use by public employee before retirement.

Amends N.J.S.A. 18A:30-3.6 (sick leave) and N.J.S.A. 18A:30-9.1 (vacation time) to make applicable for all current and future officers and employees of boards of education the limit of $15,000 for the payment of supplemental compensation at retirement for accumulated unused sick leave, and the limit on the carrying forward of vacation leave for one year only.

The bill also imposes limits on the use of sick leave by board of education employees in the twelve months before retirement, prohibiting the use of six or more consecutive days of accumulated sick leave, without medical necessity verified in writing by a physician, by an officer or employee in the twelve months prior to retirement in anticipation of that retirement.

The employer may require the officer or employee to submit to an examination by a physician selected by the employer to verify the medical necessity.
The employer must:

impose a fine and issue a reprimand against the officer or employee found to be in violation of this prohibition, with the fine to be an amount equivalent to three times the daily rate of compensation for each day of violation, or
for a subsequent violation of the prohibition, deduct a number of sick leave days equivalent to the number found to have been used in violation of this prohibition from the number of unused accumulated sick leave credited on the effective date of retirement upon which supplemental compensation, if any, for the officer or employee at the time of retirement is calculated, or
both.

The bill would not be “deemed to impair the obligation of a collective negotiations agreement or individual contract of employment with relevant provisions in effect on the bill’s effective date.”

NJPSA is seeking clarification of the intent of the bill sponsors in terms of grandfathering existing time earned and contracts in effect.

S-2043 (Kyrillos) – Concerns collective negotiations for school employees; repeals law prohibiting school boards from imposing terms and conditions of employment. (Last Best Offer Legislation)

The bill repeals N.J.S.A. 34:13A-33, reinstating the ability of school boards to unilaterally impose their last best contract offers.

The bill also amends N.J.S.A. 34:13A-34 to clarify that when a collective negotiation between an employer and a majority representative have failed to result in the parties reaching agreement on the terms of a negotiated agreement, the selection of a fact finder or super conciliator will be the sole responsibility of the New Jersey Public Employment Relations Commission (PERC), independent of and without any participation by either of the parties.

The legislation also prohibits any fact finder or super conciliator selected by PERC, from issuing any fact finder’s report, or, in the case of a super conciliator, any final report, recommending a collective negotiation settlement or agreement, which exceeds a total of 2.5% on economic issues including wages, salaries, hours in relation to earnings, and other forms of compensation such as paid vacation, paid holidays, health and medical insurance, and other economic benefits to employees.

A-3075 (Chiusano) – Implements Governor's "Tool Kit" proposals for public employer - public employee collective bargaining.

Amends N.J.S.A. 34:13A-5.3 to:

Develop a New PERC Arbitrator Selection Procedure

The bill adds a procedure for selecting arbitrators for both contract negotiations and grievance disputes. PERC would randomly select three arbitrators from its special panel of arbitrators and submit them to the disputing parties for consideration. If the parties are unable to mutually agree on one of the three arbitrators within 10 days, PERC would select the arbitrator by lot.

Establish a 2.5 Cap on Arbitration Awards

Imposes a 2.5 percent cap on arbitration awards and collective bargaining agreements. Specifically prohibits any mediator, fact finder or arbitrator from recommending or awarding any settlement that would exceed by more than 2.5 percent the aggregate amount expended by the public employer on economic issues for the members of the affected employee organization in the immediately preceding employment year.

A-3065 provides that no public employer or public employee organization can enter into any agreement on economic issues that exceed the 2.5 percent cap. Economic issues are defined as wages, salaries, hours in relation to earnings, and other forms of compensation, such as paid vacation, paid holidays, health and medical insurance, and other economic benefits accruing to the employees represented by the affected employee organization.

Establishes criteria an arbitrator must consider when deciding an arbitration award. These include:

the impact the award would have on local property taxes;
the restrictions imposed on local government employers by the “cap law”;
a comparison of public and private sector wages, benefits and conditions of employment; and
the general public interest and welfare.

Other Requirements

The bill also requires:

professional qualifications for appointment as an arbitrator;
rules concerning ethical standards and political activities;
the implementation of a fee schedule for arbitration services; and
a clarification that the parties are to share equally the costs of any arbitration.

A-610 - Moves school, fire district and certain municipal elections to date of nonpartisan municipal elections.

This legislation amends current law to move the date for holding school and fire district elections to the date of the nonpartisan municipal elections – the second Tuesday in May. The county clerk would be responsible for administering the election instead of the secretary of the board of education.

New school board members would take office in the first or second week following the election. School budgets would be voted for at the same election and would include all of the revenues and expenditures featured in current school budgets.

The form of the ballot (machine, sample, absentee, emergency and provisional) used for the nonpartisan municipal, school and fire district election would reflect the expanded number of public offices and questions to be presented to the voters on the day of the election;

In order to comply with the provisions of Article VIII, Section II, paragraph 8 of the New Jersey Constitution prohibiting the imposition of a State mandate on a unit of local government without sufficient funding or a supermajority vote of the Legislature, whenever the costs of a nonpartisan election exceeds the average costs of such elections occurring immediately prior to the enactment of the bill, the State Treasurer would be required to remit the difference to the county clerk to cover the clerk's expenses in connection with the election. The Legislature would be required, in the annual appropriations act, appropriate the funding necessary to cover those expenses.

NJPSA will keep you advised of all developments concerning the legislation.

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