State Rep. Scott Petri (R-178) and several other members of the Bucks County delegation of the Pennsylvania House of Representatives sent a letter to New Jersey Gov. Chris Christie, imploring him to reconsider his plan to revoke a 38-year-long reciprocity agreement that allows Pennsylvania residents who work in New Jersey, and New Jersey residents who work in Pennsylvania, to pay income taxes where they live.

                In the letter, signed by state Reps. Bernie O'Neill (R-29), Gene DiGirolamo (R-18), Kathy Watson (R-144), Tina Davis (D-141), Frank Farry (R-142), John Galloway (D-140), Marguerite Quinn (R-143), Craig Staats (R-145) and Petri, the lawmakers requested that Christie drop his plans to tax Pennsylvania residents who work in New Jersey. To date, there has been no response from Christie other than his comments in the press that he would reverse his decision if the New Jersey Legislature helps him find savings on employee costs.

                In the meantime, efforts are underway in Pennsylvania to deal with the decision.  Legislation, sponsored by Petri, would amend the Sterling Act, which was enacted in 1932, giving Philadelphia broad-based taxing authority in the aftermath of the Great Depression.  This authority, which was not afforded to other Pennsylvania communities, enabled Philadelphia to impose a City Wage Tax on salaries, wages, commissions and other compensation paid to individuals who live or work in the city, as well as non-residents who work there. But unlike taxes collected in other Pennsylvania communities, the Philadelphia Wage Tax is not returned to the non-resident taxpayers' home districts to support their schools, police, fire and emergency medical services. Petri's legislation would change this.

                House Bills 2256 and 2257 would remove Philadelphia's power of preemption on local income taxes, requiring Philadelphia to reimburse surrounding jurisdictions that impose an earned income tax at the rate charged in that jurisdiction and allowing individuals who work in Philadelphia to pay their resident local tax and receive a credit against Philadelphia's non-resident wage tax.

                "In addition to leveling the playing field for taxpayers and suburban taxing jurisdictions, my legislation ensures that Pennsylvania's interests are protected should neighboring states opt-out of reciprocity agreements," Petri said.  "The House Finance Committee has scheduled a public hearing on this legislation for Oct. 5, at 10 a.m., at the Bensalem Township Building, council chambers, 2400 Byberry Rd. in Bensalem.

                "Since Christie announced his decision, I have received a half dozen calls from constituents who operate businesses in New Jersey.  They indicate that they will not be renewing their New Jersey leases for their businesses and are actively looking for business locations in Pennsylvania," said Petri.  "I think the governor's decision may backfire on New Jersey if he does not change his position."