To control government spending, some states have placed a “cap” on aggregate expenditures. The author examines how such caps affect public sector interest arbitration. For example, in Policemen’s Assn. v. Town of lrvington, where the Arbitrator’s decision exceeded the 5% cap, the New Jersey Supreme Court upheld the decision, ruling that the was supported by substantial credibleevidence in the record and that the arbitrator had given due weight to each of the eight statutory factors and rendered an award that was “reasonable.” The author opines that, in a cap-law jurisdiction, the arbitrator will have to learn the mechanics of the law; how the cap is calculated; how much has been committed to non-collective-bargaining expenditures; and how much remains for collective bargaining costs.