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Christie said in September that he planned to throw out the
40-year-old "reciprocity" pact in order to raise future revenue,
because New Jersey's Democrat-controlled legislature had not cut
public employee health insurance costs in the state's fiscal
2017 budget.
The Republican governor said he reversed course after lawmakers
sent him a bill, which he signed on Monday, to save $200 million
by streamlining pharmacy benefits.
"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 in a
statement.
The arrangement lets residents of both states pay personal
income taxes where they live, not where they work.
It is advantageous for high-income Pennsylvania residents who
work in New Jersey, because they pay their state's lower tax
rate. It is also good for low-income New Jerseyans who work
across the border because of New Jersey's progressive tax
system.
(Reporting by Hilary Russ; Editing by Leslie Adler)
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