N.J. Ends PA Tax Deal

The McGreevey administration has abandoned its plans to end a reciprocal income tax agreement with Pennsylvania, according to a published report.

The Times of Trenton, citing an unidentified administration source, reported the decision in Tuesday's editions. The source said officials realized they had not fully considered the implications of terminating the deal, which allows residents who live in one state and work in the other to pay income taxes in their home state.

Paul Aronsohn, a spokesman for Gov. James E. McGreevey, disputed the report. He said McGreevey was continuing to discuss the matter with key South Jersey Democratic legislators.

The governor can unilaterally end the reciprocal agreement on Jan. 1 by sending a notice to Pennsylvania 120 days before the year's end. However, Assembly Majority Leader Joseph Roberts said the issue remains open to negotiation.

"There is growing willingness on the part of the administration to look for alternatives, realizing this would be an unfair burden on the people of South Jersey," he said.

Meanwhile, Democrat Louis D. Greenwald, chairman of the state Assembly's Budget Committee, said Monday that he would not support the proposal.

"I am committed to introducing a budget that does not include this," Greenwald said.

The proposal had been sharply criticized by South Jersey residents, especially those who work in Philadelphia and would have to pay more in income tax to Pennsylvania.

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Author: 6 ABC-AP