New Jersey Governor Chris Christie hailed the measure as key for towns to keep property taxes from rising.
Gov. Chris Christie has signed into law a bill that extends the cap on arbitration awards to New Jersey's police and firefighters through 2017.
Christie signed the bill Tuesday on the statehouse steps flanked by dozens of mayors from across the state.
The signing comes after the governor and Democrats worked out a compromise to revive the cap that expired April 1.
Christie hailed the measure as key for towns to comply with a law that keeps property taxes from rising by more than 2 percent per year, with certain exceptions.
He credited it for keeping last year's increased to a modest 1.7 percent.
The deal includes several changes includes allowing arbitrators to award annual raises of 2 percent over the previous year's wages rather than 2 percent per year.