GOVERNOR CHRISTIE PROPOSES TOOL KIT TO LIMIT GOVERNMENT SPENDING
By Keith D. Barrack, Esq. and Philip J. Morin III, Esq.
Governor Christie, in his continuing effort to change New Jersey’s public spending habits, has prepared a 33-bill legislative “Tool Kit” intended to place caps on public spending, enhance municipal collective bargaining, and provide greater flexibility to public entities to address civil service issues.
Constitutional Amendments Would Cap State and Local Spending Increases: 2.5% Property Tax Levy Cap
The most significant measures call for Constitutional Amendments that would limit the increase in local property taxes and State spending appropriations to 2.5% each year. The local taxation threshold would not include revenue generated from new construction or improvements and may be exceeded to meet debt service obligations. Counties and Municipalities would be able to bank unused tax levy increases for three years. By way of example, assuming a municipality increased the tax levy by 2% in year one, it would be able to raise the tax levy by 3% in year two without voter approval because the average increase over the two-year period remained at 2.5%.
State appropriations will also face limitations on annual increases. If the amendment is passed, it would be unconstitutional for the Legislature to pass an annual budget or other law appropriating funds during a fiscal year that exceeds the prior fiscal year total appropriation by 2.5%. However, should the State not spend all appropriated moneys in a given fiscal year, the 2.5% appropriation cap in the following year may be exceeded by the value of the unexpended fund from the prior year without voter approval. The appropriation cap applies to State spending, but expressly excludes State aid for schools, pension and benefit obligations, payment for capital construction projects including the Transportation Trust Fund, debt service payments, and property tax relief.
In order to become law, a Constitutional Amendment must be passed by a three-fifths (3/5) majority of the Legislature and then must be approved by a majority of the electorate at the next general election. Should the Legislature approve the amendment via simple majority (41 votes in the General Assembly and 21 votes in the Senate), the amendment must be presented to the Legislature in the next legislative year, be approved by a simple majority, and approved by a majority of the electorate at the next general election.
Collective Bargaining, Civil Service, and Pension Benefits Changes Sought To Lower Local Government Costs
In addition to limiting local revenue, Governor Christie seeks to provide mechanisms to lower costs by addressing collective bargaining standards, sick time payouts, pension obligations, and shared services arrangements.
The economic impacts of shared services would be augmented by eliminating terminal leave payouts, permitting staggered furloughs in a governmental unit, the ability to rescind civil service status via referendum, and allowing the layoff of personnel with seniority if lower level personnel are deemed critical and essential.
Governor Christie has also proposed limiting the maximum increase in collective bargaining increases to 2.5%. The 2.5% cap would include all economic issues such as salary, benefits, pension, sick and vacation time, and insurance. Mediators, whose fees would also be statutorily capped, would be legally barred from recommending any agreement that exceeds the 2.5% cap.
Public employees would not be able to cash out sick time in excess of $15,000 and any sick time payout would be payable via installments over as many as 10 years to lessen the financial impact on public entities. Unused sick time may be carried over for just one year. Employees whittling down sick time prior to retirement would also be impacted as they would not be permitted to take more than six consecutive sick days in the twelve months prior to retirement without a written verification by a doctor as to the necessity of the absence.
Individuals not directly employed by State, County or local entities may also find their ability to participate in the public pension system impacted. Governor Christie has proposed eliminating employees of insurance associations, joint insurance funds, the League of Municipalities, Association of Counties, and non-profit educational foundation employees from participating in the pension system.
For more information regarding these legislative initiatives and how they will impact your municipality, please contact Keith D. Barrack, Esq. by phone/email: 201-843-5858; kbarrack@florioperrucci.com. Additional assistance may be received by contacting Philip J. Morin III, Esq. by phone/email: 201-843-5858; pmorin@florioperrucci.com.
Municipal Practice Area
The Municipal Law Group brings practical, first-hand experience to its clients to help communities better serve their citizens. We have one of the most seasoned team of municipal lawyers in the Mid Atlantic region, many of whom are officials in their own communities.
Florio Perrucci Steinhardt & Fader offers a comprehensive range of practice areas that complement municipalities. We engage our Labor and Employment Group to manage personnel-related issues, including labor negotiations and compliance with state and federal employment laws. Our Environmental Group works closely with public entities to ensure that projects meet environmental regulations. Our Construction and Public Contract Group assists in the management of capital projects large and small as well as procedures to analyze bids for municipal work. Our Land Use and Real Estate Group works seamlessly with municipalities on zoning changes and all land use matters. Our Government and Regulatory Affairs Group helps municipalities and school boards correctly interpret and respond to complex rules, regulations, protocols and laws. And our experienced Litigation Group resolves difficult municipal issues through a variety of avenues, including trials and out-of-court settlements.
We are skilled in advising our municipal and school board clients in day-to-day matters as well as complex matters such as competitive bidding procedures, smart growth development, the Highlands and Pinelands Acts, zoning changes and restrictions, and election laws.
In addition to our expertise representing public entities, our attorneys provide expert services to private clients who require assistance in negotiations, land use and zoning, regulatory and contractual issues with government agencies and organizations, including state, county and local.
The Municipal Law Group uses the vast resources of several key members of Florio Perrucci Steinhardt & Fader -- former New Jersey Governor Jim Florio; Paul Fader who was Chief Counsel to New Jersey Governors McGreevey and Codey, and Mayor Emeritus of Englewood, N.J.; Doug Steinhardt who is chairman of the Warren County, N.J., Republican Committee and Mayor of Lopatcong Township, N.J.; Mark Peck who is Mayor of Bloomsbury, N.J., and Brian Tipton who is Mayor of Harmony Township.
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SPOTLIGHT ON:
Keith D. Barrack, Esq.
 Mr. Barrack is a partner with Florio Perrucci Steinhardt & Fader, working with the firm in the areas of redevelopment / land use / government affairs, energy, and public governance. Keith's extensive representation of public authorities, boards, and commissions, includes the State, Counties, municipalities, and Boards of Education on matters including general counsel, energy, public contracting, rendering legal opinions, and providing counsel during public meetings.
The New Jersey Law Journal recently selected Keith to its 2009 list of "40 under 40". According to the Law Journal's publisher, the 40 lawyers on the list are people under the age of 40 who are "worth watching not only for what they have achieved so far in their careers but more so for the potential they show to be among the leaders of the New Jersey bar in the next decade."
Keith joined the firm in April 2006 from the New Jersey Governor's office where he served as assistant counsel. In that capacity, he worked with the chief counsel to the Governor and Director of Authorities Unit providing legal services to state authorities including the Port Authority of New York and New Jersey, New Jersey Transit, New Jersey Turnpike Authority, Casino Reinvestment Development Authority, Delaware River Joint Toll Bridge Commission, and the Atlantic City Convention and Visitors Authority. His previous responsibilities in Trenton included serving as Deputy Attorney General for the Division of Law and Public Safety where he worked with environmental and litigation issues.
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kbarrack@florioperrucci.com
Philip J. Morin III, Esq.
 Mr. Morin is a partner with Florio Perrucci Steinhardt & Fader, working in several practice groups including Environmental, Construction and Public Contracting, Litigation Defense, Real Estate/Land Use, and Redevelopment. Phil was named one of New Jersey's "Forty Under 40" Lawyers, New
Jersey Law Journal, 2007. According to the Law Journal's publisher, the lawyers on the list are people who are "worth watching not only for what they have achieved so far in their careers but more so for the potential they show to be among the leaders of the New Jersey bar in the next decade."
He has performed environmental and zoning due diligence in support of corporate and real estate transactions, and has assisted clients in the investigation, remediation and development of brownfields properties. Mr. Morin has appeared before land use boards and redevelopment agencies on a variety of residential, retail, commercial and industrial development and redevelopment projects.
Mr. Morin represents clients in transactions involving industrial and commercial properties and negotiates leases on behalf of commercial landlords and tenants. In addition to advising clients on traditional real estate matters, Mr. Morin has also assisted industry and property managers on matters relating to climate change and renewable energy facilities as well as compliance obligations under various programs governing asbestos, lead, mold and other indoor air and worker safety issues. Mr. Morin has substantial experience in real estate and land use litigation matters, including litigation involving the designation of redevelopment areas, tax appeals, eminent domain proceedings and disputes over master deed and bylaw provisions of condominiums.
He counsels clients in transactional, permitting, licensing, compliance and enforcement matters under federal and state health and safety, air and water pollution, hazardous and solid waste, site development and property transfer laws, such as the New Jersey Industrial Site Recovery Act ("ISRA"). Additionally, he has litigated cost-recovery, contribution and natural resource damages claims under CERCLA and the New Jersey Spill Compensation and Control Act in federal and state court and has represented commercial, industrial and utility clients in various administrative proceedings involving permitting and licensing matters.
Mr. Morin is a Senate Appointee to the NJDEP Small Business Compliance Advisory Panel. He is a member of the Legislative Committee & COAH Task Force, NJ Apartment Association; the LEED Homes Committee, United States Green Building Council of New Jersey; the New Jersey Wireless Association; the Gateway Regional Chamber of Commerce, the Land Use Section of the New Jersey State Bar Association; and the Union County Bar Association. Additionally, he is a Leadership New Jersey Graduate Fellow and the editor of New
Jersey Zoning Watch Law Blog (www.njzoningwatch.com). He frequently acts as a panelist or moderator at seminars and other public speaking engagements. He has also authored several articles and legal newsletters on a range of topics including the real estate development and redevelopment processes, affordable housing and New Jersey's climate change mitigation efforts.
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pmorin@florioperrucci.com
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