New Jersey Gov. Chris Christie's reauthorization of a 2% cap on police and firefighter salary increases is a credit positive for the state's local governments, Moody's Investors Service said.
The cap applies to salary increases reached through arbitration, Moody's analyst Vito Galluccio and vice president Julie Beglin said.
In the context of the state's 2% cap on increasing local government property taxes, the governments' largest revenue sources, the 2% cap on these salary increases will help government finances, the analysts said.
The cap on the salary increases had expired on April 1. Christie reauthorized them on June 23.
Salaries are usually the biggest portion of a local government's budget. Police and firefighters are typically among a local government's best compensated employees.
