Trenton from Morrisville
Credit: Wikimedia
Pennsylvanians who work in New Jersey could be hit with a massive tax increase thanks for efforts from officials on the other side of the Delaware River.
At the encouragement of Republican New Jersey Gov. Chris Christie, officials are looking at the possibility of ending a nearly four-decade-old reciprocal income tax agreement agreement that means Pennsylvania residents who work in New Jersey don’t pay income taxes to the Garden State but to their home state instead. In short, Pennsylvania residents who work in New Jersey would only file a tax return with Harrisburg and not one with Trenton; the same would go for Garden State residents who work in Pennsylvania.
“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 your taxable income from working in the Garden State is $40,000 or more, you would pay more than 5.5 percent in income tax, a 55 percent hike,” Santarsiero said. “For those making considerably more, your tax liability could spike to nearly 200 percent – and all of that money would go to New Jersey instead of benefitting our community here at home.”
Local lawmakers like Democratic state representative Santarsiero and Tina Davis have voiced opposition to the plan. Brian Fitzpatrick, a Republican who is running against Santarsiero for the open congressional seat, has spoken out against the plan.
Santarsiero has posted a petition for signatures online and Fitzpatrick has done the same.
Christie’s former treasurer, Andrew Sidamon-Eristoff wrote in a December op-ed that ending the tax agreement with the Keystone State would mean $180 million for New Jersey’s coffers per year. He specifically mentioned the state would be able to tax “wealthy Bucks County residents who commute to high-paying jobs in New Jersey far outweigh the taxes New Jersey collects on low- and moderate-income Camden and Gloucester County residents who work in Pennsylvania, typically Philadelphia.”
Census data shows nearly 50,000 Bucks County residents employed in New Jersey. All of those people would be impacted if Christie signs an order to repeal the Pennsylvania-New Jersey Tax Reciprocity Agreement, which was agreed to in 1977.
“It appears Governor Christie is trying to balance his budget on the backs of workers who live outside of New Jersey,” Santarsiero said.
According to U.S. Census data, more than 46,000 Bucks County residents work in New Jersey.
The Christie administration ruffled feathers with many Bucks County residents, including many in the Newtown and Levittown area, when he tried to push forward a requirement that all public sector employees must live in New Jersey. The plan was altered to grandfather in current public employees from across the border after an outcry from local residents who worked in the public-sector and some lawmakers.
New Jersey’s then-Gov. Jim McGreevey introduced a similar plan in 2002. The plan was proposed to end the reciprocal income tax agreement agreement and was killed after an outcry.
The way the reciprocal income tax agreement agreement is laid out, Christie could move to end the agreement without the permission of the New Jersey legislature.
Both Fitzpatrick and Santarsiero are calling for people of all parties to rally against the plan.
