Gov. Chris Christie just boosted taxes by hundreds of dollars a year for South Jersey residents who work in Pennsylvania. Where's the outrage among our lawmakers?
Gov. Chris Christie has been getting both beaten up and lauded over his so-called "Fairness Formula" for state aid to local school districts.
The Republican governor on Thursday asked the state Supreme Court to overturn its own edict that now sends the bulk of the aid to impoverished, urban school districts. Some suburban districts could see lower property taxes if the court allows Christie to divvy up the aid at a fixed, per-pupil level, regardless of a district's financial means.
Far less attention, however, is being paid to another Christie move that makes the grass greener on some suburban lawns than others. He's just canceled a "commuter tax" agreement whose end penalizes middle-income New Jersey residents who work in Pennsylvania.
The governor hinted at the move in July. Before the ax fell, we expected to hear of extended negotiations between the two states, and between Christie and lawmakers who serve South and Central Jersey. Instead, we heard silence.
New Jersey's bottom line is clearly helped under a lapsed reciprocal agreement. Wall Street analysts who usually trash New Jersey's fiscal position have praise. So did an editorial in our sister publication, the Star-Ledger of Newark.
Why? Under the agreement, state-to-state commuters pay income taxes at the rate charged in the state where they live. Pennsylvania has a "flat" 3.07 percent income tax, while New Jersey has income-based graduated rates ranging from 1.4 percent to 8.97 percent. Because so many people with high-income jobs in New Jersey live in places like Bucks County, Pa., New Jersey's Office of Legislative Services sees an extra $180 million flowing to Garden State coffers with the agreement voided.
As the South Jersey Times stated in its own earlier editorial, this is not a "show us the money" issue alone. It has serious negative impact on most of the 120,000 people who live in South Jersey and work across the river.
According to OLS, a New Jersey resident with a $40,000-a-year job in Pennsylvania has paid $630 a year in income taxes to New Jersey. With the agreement scrapped, the same worker instead pays $1,220 to Pennsylvania -- a $590 increase. A New Jersey-based commuter must earn $120,000 annually to reach the break-even point. Above that income, the worker's tax bill to Pennsylvania is lower.
A tiny group of professional Philadelphia sports stars and TV news personalities must be over the moon. The rest of our commuting workers, not so much.
This concept is harder to grasp than school aid or the gasoline tax, whose impact is more straightforward. Nonetheless, we're aghast that scrapping the deal has elicited no more than perfunctory negative comments from key South Jersey leaders like Senate President Stephen Sweeney and Assemblyman Lou Greenwald.
Look, $180 million is nothing to sneeze at. If New Jersey can't leave this money on the table, fairness demands at least a transitional period for any change. The high earners of Yardley, Pa., who work in Jersey are up in arms about THEIR higher tax bills, too. So, that's lots of leverage to make Pennsylvania Gov. Tom Wolf come to the table with Christie. Why isn't that happening? Why hasn't it happened yet?
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