Salary-hike cap for police, firefighters gone in high-tax N.J. A new reality for unions, towns.

For the first time in several years, local New Jersey police and fire unions are negotiating contracts without a state-imposed limit on salary increases. And while the employees are saying good riddance, local government officials are readying an “aggressive” campaign to get back the cap.

It is too early to say what the end of the 2 percent raise limit ultimately will mean to local budgets and the state’s property owners, who already pay some of the highest real estate taxes in the nation.

But one change is evident: Since the cap expired 18 months ago, the tone of contract negotiations has changed, according to both union and government officials.

John Donnadio, executive director of the New Jersey Association of Counties, this week accused the unions of using “aggressive tactics.” He said that taxpayers might suffer the consequences and that his group is embarking on an “aggressive campaign" of its own — to restore the limits.

Meanwhile, Patrick Colligan, president of the New Jersey State Policemen’s Benevolent Association, said that the worst-case scenarios invoked by local governments have been unwarranted.

“Let’s wait and see if doomsday comes,” said Colligan, whose union represents more than 33,000 officers statewide. “If doomsday comes, I’ll listen to their arguments.”

Unions say they are trying to recover some of what they lost; local government groups say they fear they’ll have to cut services.

Both sides are watching to see what this first round of post-cap negotiations will mean and whether they can use the results to justify elimination of the cap or the efforts to get it back.

Pay increases during contract disputes — decided by arbitration, because firefighters and police officers are not allowed to strike — were capped at 2 percent in 2011. The move during Gov. Chris Christie’s administration was designed to help the state rein in property taxes. The year before, the state had limited property-tax increases to 2 percent.

State lawmakers allowed the cap on salary increases to expire in December 2017.

Police officers and firefighters wanted lawmakers to get rid of the cap — which legislators extended in 2014 — arguing they should be well-compensated for jobs that ask them to risk their lives. They said the 2 percent property-tax limit made the salary-hike cap unnecessary; towns already were confined by the amount of tax revenue available.

Michael Freeman, labor relations coordinator for the police benevolent association, said the group is pleased about the prospect of "true negotiations without that hammer of [a] hard cap hanging over our heads.”

The association has seen some contracts with salary hikes of slightly more than 2 percent, Freeman said. Increases "are still going to be reasonable numbers,” he said; gone are the days when police could expect annual 4 percent raises. Many officers’ take-home pay decreased over the last decade as they contributed more to health care and pensions, he said.

Without the cap, municipalities once again can use money saved from high-level officers’ retirements to give raises to others, Freeman said.

It will take years to measure the impact of removing the salary cap, said Matthew Watkins, manager of Bloomfield Township, Essex County, and president of the New Jersey Municipal Management Association. And any salary increases would be incremental.

“When we were giving 4, 5, 6 percent increases, that didn’t happen overnight,” he said.

Local officials have argued that the property-tax caps necessitated the salary limits. Spending on law enforcement employees represents 15 percent to 25 percent of counties’ operating budgets, according to the New Jersey Association of Counties.

Local governments said the salary caps worked to control costs. Gov. Phil Murphy said in his January State of the State address that the statewide average property-tax increase in 2018 was the lowest on record. The cap also was an incentive to reach a contract before arbitration became necessary, said Donnadio, of the counties association.

“The whole scope and tone of negotiations has changed in favor of labor at the expense of taxpayers," Donnadio said.

Mayors and county freeholders are asking for support from state lawmakers and Murphy, who has never publicly taken a stand on the issue. In the meantime, the county association plans to set up workshops to teach negotiating strategies to members.

Members of the benevolent association held a seminar on collective bargaining for the post-cap era early this year. There, attorney Frank Crivelli, who represents several local unions, advised members to develop leverage and said, “Understand how to exert that leverage to get them to give you what [you] want because of the chance that they might pay more in interest arbitration,” according to New Jersey Cops magazine, the official publication of the benevolent association.

The association also teaches police officers how to analyze local budgets, understand the tax base, and figure out how much money could be available to them “without harming the taxpayer,” said Freeman, the labor relations coordinator, adding that unions make their offers “based on real numbers.”

In the months leading up to the cap’s expiration, the New Jersey State League of Municipalities called extending it a No. 1 priority. Michael Cerra, the league’s assistant executive director, acknowledged firefighter and police unions “are trying to get back what they feel they lost.” He said the sunset of the cap has “created an unlevel playing field.”

Anecdotally, Cerra said some municipal officials have said elimination of the salary cap was a factor in decisions not to fill some positions and curtailing some salary increases.

“It comes down to simple math,” he said. "There are a number of cost drivers hitting local government, but this is the biggest.”