Trenton, NJ — John Reitmeyer today reports on NJ Spotlight that Governor Chris Christie said over the summer that he wasn’t fully committed to his decision to scrap a longstanding tax agreement with the state of Pennsylvania that has allowed commuters in both states to pay personal income taxes where they live instead of where they work.
But with the start of the next tax year now getting closer, it’s looking more and more like the bistate pact will indeed be allowed to expire.
Reitmeyer reports that, across the river in Pennsylvania, state officials have already begun informing taxpayers that the arrangement with New Jersey, which has been in place for nearly 40 years, will be coming to an end as of December 31, 2016.
The change is important because New Jersey and Pennsylvania have different income-tax rates, and some commuters on each side of the river will end up facing higher income-tax bills.
Officials in New Jersey, meanwhile, have also indicated in documents released for an upcoming public bond offering that the state is now counting on collecting an extra $72 million this fiscal year thanks to the canceling of the reciprocal agreement with Pennsylvania.
But with the start of the next tax year now getting closer, it’s looking more and more like the bistate pact will indeed be allowed to expire.
Reitmeyer reports that, across the river in Pennsylvania, state officials have already begun informing taxpayers that the arrangement with New Jersey, which has been in place for nearly 40 years, will be coming to an end as of December 31, 2016.
The change is important because New Jersey and Pennsylvania have different income-tax rates, and some commuters on each side of the river will end up facing higher income-tax bills.
Officials in New Jersey, meanwhile, have also indicated in documents released for an upcoming public bond offering that the state is now counting on collecting an extra $72 million this fiscal year thanks to the canceling of the reciprocal agreement with Pennsylvania.
The change is a net winner for New Jersey’s budget because income-tax rates are higher for most of the tax brackets on this side of the river than in Pennsylvania, where the state levies a flat 3.07 percent rate.
While some lawmakers in both states have cried foul over the pending change since it was announced by Gov. Christie in September, they don’t have the power to block it thanks to the way the bistate deal was originally enacted.
Even Pennsylvania Gov. Tom Wolf, who has also criticized Christie’s decision, doesn’t have the authority to stand in the way.
The Republican Christie originally put the longstanding tax pact on the chopping block at the end of June as he was waging a partisan fight with Democratic legislative leaders over changes he wanted to make to public-employee and retiree healthcare plans.
Gov. Christie said those unspecified healthcare changes were necessary to help cut $250 million in state spending.
For Reitmeyer’s complete story, click here.
While some lawmakers in both states have cried foul over the pending change since it was announced by Gov. Christie in September, they don’t have the power to block it thanks to the way the bistate deal was originally enacted.
Even Pennsylvania Gov. Tom Wolf, who has also criticized Christie’s decision, doesn’t have the authority to stand in the way.
The Republican Christie originally put the longstanding tax pact on the chopping block at the end of June as he was waging a partisan fight with Democratic legislative leaders over changes he wanted to make to public-employee and retiree healthcare plans.
Gov. Christie said those unspecified healthcare changes were necessary to help cut $250 million in state spending.
For Reitmeyer’s complete story, click here.
