Dear Mayor:

This will be the first of three letters dealing with the latest developments in the Legislature’s Special Session for Property Tax Reform.

Yesterday, the League was prepared to testify, before the Joint Legislative Committee on Public Employee Benefit Reform, in support of A-2. This omnibus bill sought to implement many of the 41 recommendations concerning benefits and certain terms and conditions of public office and employment.

During a five hour delay in calling the hearing to order, in an unprecedented move, Governor Corzine sent a letter to the Committee Co- Chairs which, in effect, signaled the demise of A-2.  In his letter, the Governor asked that certain provisions contained in the bill be removed, so as to provide him the flexibility to negotiate with public sector unions. Among the items removed from the bill were provisions that would have: established a Defined Contribution Program for future public employees, including part-time employees; required a public employee to designate one job for one pension; addressed the issue of misconduct as it applies to pension abuse; and based pensions on the average of highest five years (PERS) and highest three (PFRS) will have no impact on current public employees who are part of a bargaining unit. Instead, such reform will be limited to elected officials and full time appointed officials.

In the area of healthcare at the local level, the Governor’s letter noted that such issues are better left to contract negotiations as they do not constitute pension reform. Since, the Governor’s letter indicated such respect for the integrity of the negotiation process, we expressed to the Committee that local governmental units need legislative authority to negotiate employee co-pays for health coverage premium.  We asked the Committee to grant us the same negotiating authority the State currently enjoys. This is an unresolved issue that would be a tremendous aid in controlling healthcare costs.

After four months of testimony and written communication to the Joint Committee on Pension Reform, we recognized many of the recommendations embodied in the legislation addressed our concerns as expressed in the COPE Report. The League and its 19 Affiliate Organizations concluded A-2 represented an important step toward achieving fiscal integrity in our State and many of the actions would have saved real dollars for property taxpayers.   However, now that A-2 no longer exists in its original form, we cannot go forth with our position without benefit of review of a new, revised bill.

Please contact me at League headquarters if you wish to discuss further.

Thank You.