Local Lawmakers Continue Fight Against End Of NJ/PA Reciprocal Tax Agreement

Local lawmakers are going public with a plea to New Jersey Gov. Chris Christie: reconsider ending the two-state reciprocal tax agreement.

State Reps. Steve Santarsiero and Madeleine Dean on Thursday introduced a Pennsylvania House resolution urging Christie to reconsider ending the 39-year-old tax agreement between New Jersey and Pennsylvania.

In September, Christie decided to end the tax agreement among the neighboring states, which provides that residents of New Jersey and Pennsylvania who work across state lines pay personal income tax only to their home state.

The withdrawal is set to take effect Jan. 1 if Christie finalizes it.

According to Santarsiero and Dean, the agreement would negatively affect 125,000 Pennsylvanians who work in New Jersey and could cost Pennsylvania $5 million annually. More than 3,500 Pennsylvanians who don’t support ending the reciprocity agreement have signed a petition.

Local lawmakers say terminating the agreement will "wreak havoc" on many household budgets in Bucks and Montgomery counties.

"Our residents working in New Jersey have situated their lives and budgets under a time-honored interstate agreement. This agreement has also fostered a shared economy with businesses engaging on both sides of the Delaware River," Santarsiero said in a statement. "We are asking Governor Christie to consider the full impact an end to this agreement will have on families and businesses and to seek an alternative for closing the state's budget gap."

According to information from Santarsiero's office:

Pennsylvanians working across the Delaware River who make $35,000 or more per year would be subject to New Jersey’s higher tiered rates, and if a Pennsylvanian's taxable income from working in the Garden State is $40,000 or more, he or she would pay more than 5.5 percent in income tax, a 55 percent hike. For those making considerably more, their tax liability could spike to nearly 200 percent.