The Latest: Pennsylvania: Christie erred in ending tax deal
TRENTON, N.J. (AP) — The Latest on an income tax reciprocity deal between New Jersey and Pennsylvania (all times local):
A spokesman for Pennsylvania Democratic Gov. Tom Wolf says New Jersey Republican Gov. Chris Christie has “erred significantly” in deciding to end a decades-old income tax agreement between the states.
Wolf spokesman Jeffrey Sheridan said Friday that Christie’s decision will “punish” 125,000 Pennsylvanians and will hurt the prospects for creating jobs in the region.
The 1977 reciprocity agreement allows residents who work in either state to pay income taxes at their home state’s rate.
Christie says he is ending the 1977 reciprocity agreement as part of an effort to compel the Democrat-led New Jersey Legislature to enact $250 million in cuts to public worker health benefits.
New Jersey Gov. Chris Christie says he is ending a nearly 4-decade-old tax agreement between New Jersey and Pennsylvania, all but ensuring thousands of residents in each state will see their income tax burdens go up.
The Republican governor said Friday that he would reconsider his decision if the Democrat-led Legislature finds $250 million in savings from public worker health benefits.
The agreement allowed residents working in either state to pay taxes at their home state’s rate. It was a good deal for wealthier Pennsylvanians who commuted to work in New Jersey but paid their state’s lower rate and for lower-income New Jersey residents who benefited from their state’s lower rates. Wealthier New Jersey residents working in Pennsylvania aren’t likely to see much of a change.
Either governor can pull out of the deal at the start of the year but must give 120 days’ notice. The deadline for notice this year was Friday.
Thousands of New Jersey and Pennsylvania residents could see their income taxes go up under a proposal New Jersey Gov. Chris Christie is considering.
The Republican governor is contemplating withdrawing the state from a tax reciprocity agreement with Pennsylvania and ordered his administration in June to evaluate steps toward that end. The order was aimed at forcing $250 million in cuts to public retiree health benefits.
The 1977 reciprocity agreement allows residents who work in either state to pay income taxes at their home state’s rate. Either governor can pull out of the deal at the start of the year but must give 120 days’ notice.
The deadline for notice this year was Friday.