A1405

ASSEMBLY, No. 1405

STATE OF NEW JERSEY

INTRODUCED JANUARY 29, 1996

By Assemblymen KAVANAUGH, GREGG and Bateman

An Act concerning salary increases for officers and employees of units of local government and local boards of education and supplementing chapter 4 of Title 40A of the New Jersey Statutes and chapter 29 of Title 18A of the New Jersey Statutes.

Be It Enacted by the Senate and General Assembly of the State of New Jersey:

1. a. Notwithstanding the provisions of any other law to the contrary, after the effective date of this act the governing body of a local unit shall not, by means of a collective bargaining agreement, employment contract, salary ordinance or resolution, or other means, grant to any officer or employee, whether elected or appointed, or to any independent contractor holding office or position in the local unit, an increase in compensation during any fiscal year which exceeds the Allowable Salary Adjustment Factor.

b. (1) On the first day of the third month next following the effective date of this act and annually thereafter, the New Jersey Department of Labor shall promulgate the Allowable Salary Adjustment Factor for use by local units.

(2) As used in this section:

"Allowable Salary Adjustment Factor" means the percentage increase, if any, in the Consumer Price Index for Urban Wage Earners and Clerical Workers between the immediate two preceding years, determined by calculating the percentage change between the second immediate preceding year's index rating and the first immediate preceding year's index rating, plus 1%. The percentage increase used by the New Jersey Department of Labor shall be computed using the combined annual average of the Consumer Price Indexes for Urban Wage Earners and Clerical Workers reported monthly for the New York, NY - Northeastern New Jersey and Philadelphia, PA - New Jersey metropolitan areas as reported by the U.S. Bureau of Labor Statistics; and

"increase in compensation" means an increase in an individual's remuneration paid by the local unit including, but not limited to, an increment, cost of living adjustment or negotiated wage increase.

c. Nothing contained in this section shall be construed as affecting the terms of any collective bargaining agreement or contract, salary ordinance or resolution which is in effect on the effective date of this act.

2. a. Notwithstanding the provisions of any other law to the contrary, after the effective date of this act a local board of education shall not, by means of a collective bargaining agreement, employment contract or other means, grant to any employee of the board an increase in compensation during any fiscal year which exceeds the Allowable Salary Adjustment Factor.

(2) As used in this section:

"increase in compensation" means an increase in an individual's remuneration paid by the local unit including, but not limited to, an increment, cost of living adjustment or negotiated wage increase.

c. Nothing contained in this section shall be construed as affecting the terms of any collective bargaining agreement or employment contract which is in effect on the effective date of this act.

3. This act shall take effect immediately.

STATEMENT

This bill prohibits the governing body of any county or municipality, after the effective date of the bill, from providing an increase in compensation by means of a collective bargaining agreement, employment contract, salary ordinance or resolution, or other means, to any officer or employee, whether elected or appointed, or to any independent contractor holding office or position in a local unit which exceeds the Allowable Salary Adjustment Factor. The bill makes the same prohibition on boards of education with respect to their employees. The provisions of the bill will not affect the terms of any collective bargaining agreement or contract, salary ordinance or resolution in effect on the effective date of the bill.

The bill also requires the New Jersey Department of Labor, on or before the first day of the third month next following the effective date of the bill and annually thereafter, to promulgate the Allowable Salary Adjustment Factor for use by local units and school districts.

The Allowable Salary Adjustment Factor is defined by the bill as the percentage increase, if any, in the Consumer Price Index for Urban Wage Earners and Clerical Workers between the immediate two preceding years, determined by calculating the percentage change between the second immediate preceding year's index rating and the first immediate preceding year's index rating, plus 1%. The percentage increase used by the New Jersey Department of Labor shall be computed using the combined annual average of the Consumer Price Indexes for Urban Wage Earners and Clerical Workers reported monthly for the New York, NY - Northeastern New Jersey and Philadelphia, PA - New Jersey metropolitan areas as reported by the U.S. Bureau of Labor Statistics.

It is the intention of the sponsor that the provisions of this bill will enable municipalities, counties and school districts to control the costs of labor contracts and agreements to the taxpaying public. It is also the sponsor's intention that the provisions of this bill will assist counties, municipalities and school districts in controlling property tax increases, since salary costs often represent a large portion of local and school budgets.

Limits annual municipal, county and school district salary increases to percentage increase in CPI plus 1%.