From the Star Ledger:
Gov. Chris Christie announced Tuesday he will keep in place a decades-old agreement that allows New Jersey and Pennsylvania residents who work across state lines to pay income taxes where they live rather than where they work.
Christie had originally put the tax reciprocity agreement on the chopping block in September.
The governor credited finding $200 million in savings in a public worker union-backed health care bill that Christie signed into law on Monday. The legislation adjusts the process in which public workers receive their prescriptions by modifying the state’s pharmacy benefits system.
“This action will save state taxpayers hundreds of millions of dollars in health care benefit costs, and I’m proud my administration was again able to work with elected officials from both sides of the aisle and many labor union representatives to achieve these savings,” Christie said in a statement.
More than 120,000 New Jerseyans commute across the river, and a similar number of Pennsylvanians work here, according to the U.S. census.
Under the 4-decade agreement, a resident of New Jersey who works in Pennsylvania need only file a tax return in New Jersey. The same is true for a Pennsylvania resident working in New Jersey.
As a result, New Jersey hasn’t collected income taxes from people living in Pennsylvania and working in New Jersey. Christie’s former treasurer had estimated the Garden State would reap $180 million in revenue from Pennsylvania residents forced to pay taxes here.