By Ronald J. Masciantonio
In early September Gov. Christie ended a decades-old agreement that allows New Jersey and Pennsylvania residents who work across state lines to pay income taxes where they live instead of where they work. Effective Jan. 1, this decision will cause an increase in taxes for thousands of the more than 250,000 Jersey and Pennsylvania residents who cross the river every day for work.
Christie has said he took this action because he felt the Democratic-led state Legislature gave him no choice since it failed to properly close a perceived gap in the state's budget.
"Today's action was made necessary by the Legislature irresponsibly creating a $250 million state budget hole in June," Christie said. "I will not raise state taxes, cut property tax relief, reduce aid to education or our hospitals, or reduce the state's record pension payment to cover for this blunder by the Legislature."
"I am left with the least painful option I have to fulfill my constitutional duty to balance the budget for New Jersey taxpayers," he continued.
To their credit, Senate President Stephen Sweeney (D., Gloucester) and Assemblyman Lou Greenwald (D., Camden) responded swiftly and strongly:
"This is the wrong decision for our state," Sweeney said in a statement. "The burden falls completely on working families in New Jersey, especially those in South Jersey who work in Philadelphia."
"Ending this agreement will cost South Jersey residents working in Philadelphia, hurting families and raising taxes on hardworking individuals," said Greenwald.
Unfortunately, to date, nothing else of any significance has happened.
Much has been written about how this decision will negatively impact many (from lower-income Jersey residents who will pay more income taxes because they work in Philadelphia, to higher-income Bucks County residents who will pay higher taxes to New Jersey, to South Jersey companies like Subaru, Campbell's, and Destination Maternity, who have committed to New Jersey but now feel blindsided by a change in policy that will impact their employees and their own bottom lines).
To me, though, one issue that is hardly being discussed at all is the negative impact the termination of the tax reciprocity agreement will have on our regional identity.
Anyone who has grown up along the Delaware River knows and understands that when you live where we live (particularly in Southeastern Pennsylvania and South Jersey), you view yourself as a resident of the region with the full benefits provided (from a thriving downtown urban center in Philadelphia to a suburban wonderland of variety surrounding the city on both sides of the river).
Sure, we each take great pride on which side of the river we reside, but let's be real: "We" are Eagles fans; cheesesteaks and soft pretzels belong to "us"; "we" all love Jersey tomatoes and vacation down the Shore! The dividing line that is the Delaware River is but a faded boundary that most of us see more as a minor inconvenience than a real dividing line. Together we are greater than the sum of our parts.
Unfortunately the decision to dismantle this tax accord has the potential to cause a serious erosion of our regional identity. I have heard and sensed among my impacted friends, neighbors, and coworkers that this decision has created a sort of "Us" vs. "Them" awakening. The focus on this issue and its impact is leading folks to question whether having a regional identity makes sense at all.
People I know are contemplating switching jobs, not because they are unhappy at work but because they can't afford the pay cut. And what about lower-income South Jersey residents who work in Philly? Perhaps they don't have the luxury of switching jobs and will just need to cut elsewhere to survive. Where do they spend less? On groceries? On their heating bills? We know they'll be spending more on their gasoline bills.
To think those impacted individuals will carry no ill will toward the state of New Jersey as a result of this disruption in their lives is wrong. Those affected will remember what happened and will make sure to try and "get their money" back in other ways. Maybe Pennsylvania residents decide Delaware beaches or the Poconos are a nice change of pace over the Jersey Shore. Maybe a run to Pat's or Geno's for a cheesesteak "wit" is skipped in favor of a Big Mac at their local McDonald's. Maybe Bucks County residents jump on the train and work in Manhattan for the higher pay instead of working in New Jersey.
Perhaps chopping this deal apart makes perfect sense from a narrow "balance the budget" perspective for Jersey. However, more is as stake here - our regional identity. I implore Christie to take a broader view and correct this horrible mistake.