As budget planning began in communities of Monroe County, New Jersey Gov. Chris Christie announced that he was considering dropping the income tax reciprocity agreement with Pennsylvania which was adopted in 1977.

Earlier this week Christie's office announced that by making cuts to the state's pharmacy benefits system the state of New Jersey would be saving $200 million, allowing Christie to save the income tax reciprocity agreement with Pennsylvania."This action will save state taxpayers hundreds of millions of dollars in health care 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. "By addressing a potential $250 million budget deficit from growing health care costs, we are now able to save an income tax reciprocity agreement with Pennsylvania that protects tens of thousands of hard working New Jerseyans from having to pay more income taxes."Under the reciprocity agreement, people living in Pennsylvania but working in New Jersey pay their earned income tax to Pennsylvania. Without such an agreement in place, those earning income in New Jersey would pay their earned income tax to New Jersey and would get an offset on their Pennsylvania taxes.The loss of the agreement would have meant that local municipalities would have to adjust their budget to address the shortfall. For example, Chestnuthill Township announced during its budget presentation that the township expected approximately a $50,000 decrease in earned income tax for the 2017 budget.Those decreases will not be seen, at least not for the coming year.