But in a surprise move, Murphy vetoed the measure Monday, writing in his message to lawmakers that there has been “substantial criticism” of the accord over the years and that residents who commute to both New York and Delaware do not receive the same benefit.

Murphy noted that he has never threatened to terminate the agreement, as Christie did in 2016, but he said the state’s governor should continue to have the “unilateral authority” to enter into and end such agreements “should the need arise.”

Murphy’s rejection came as a stunning surprise to some members of the Legislature, who said the Democratic governor has privately said he would not target the deal, even though ending it would likely net New Jersey additional tax revenues, largely from Pennsylvanians who earn high salaries here.

In his veto message, Murphy cited estimates that the state would receive an additional $180 million in tax revenues, mostly because of differences between New Jersey’s income tax structure and Pennsylvania’s.

New Jersey’s progressive tax schedule has rates ranging from 0.014 for filers earning $20,000 or less, up to 8.97 percent for those earning above $500,000, plus an additional surcharge rate of 10.75 percent on any earnings over $1.5 million that was approved this summer.

Pennsylvania has a flat tax rate of 3.07 percent for all incomes.

Because of the disparity, high-earning Pennsylvania residents would have had to pay substantially higher taxes. But some New Jersey residents would also have had to pay more since the tax rate here is below 3.07.

Assembly Majority Leader Lou Greenwald, D-6th of Voorhees, who has been one of the most fervent defenders of the tax deal, said some 180,000 New Jersey taxpayers would be forced to pay more, mostly from South Jersey counties like Burlington, Camden and Gloucester.

And Senate President Stephen Sweeney, another outspoken defender of the accord and the prime sponsor of the vetoed legislation, said most New Jerseyans impacted would have faced tax hikes of close to $2,000.

“I think it’s unfair. We weren’t doing anything except saying, listen, Governor, what happens when the next Chris Christie comes here and all of a sudden you feel you need something so you’re gonna pick the pockets of people from one section of the state for $200 million,” said Sweeney, D-3rd of West Deptford.

The governor’s rejection comes just months after a bruising budget battle that pitted the first-year Democratic governor against legislative leaders like Sweeney and Greenwald over Murphy proposed tax increases.

Greenwald said ending the deal would result in a direct impact tax to thousands of middle-income families that Murphy has repeatedly vowed to protect. He said the same benefit is not needed for commuters to New York and Delaware because those states’ income tax structures are much closer to New Jersey.

“The governor has assured myself and others personally that he would never execute the termination clause. So I don’t know why he would want to hold onto that executive privilege,” Greenwald said. “I don’t know why he would want to save this for another governor.”

The tax accord has also been cited as an absolutely crucial benefit for scores of businesses in South Jersey and a key economic development tool for cities like Camden and Atlantic City and more suburban locations in Burlington County.

In 2016 when Christie threatened to end the deal, businesses like Destination Maternity in Moorestown and Campbell Soup Co. in Camden started pursuing plans to open satellite offices in Pennsylvania in order to protect their Pennsylvania employees from the expected tax hike.

“This was no small tremor in the business community. There were many (businesses) considering their next steps,” Greenwald said, adding that Murphy was campaigning for governor at the time.

“He got this issue when he was campaigning,” the majority leader said.

Burlington County legislators, Sen. Troy Singleton, D-7th of Palmyra, and Assemblywoman Carol Murphy, D-7th of Mount Laurel, also expressed disappointment.

“The reciprocal income tax agreement helps residents from both New Jersey and Pennsylvania, and there is no reason this agreement should ever have been threatened. That’s why the Governor’s decision to veto the reciprocal agreement legislation is disappointing, and unfair to those living in South Jersey and working across the river,” Singleton said Monday. “Many of the hard working men and women that I am privileged to represent commute to work in Pennsylvania and depend upon the two states having a stable economic relationship. This decision will undoubtedly be detrimental to them.”

“The NJ-PA tax accord provides significant benefits to both the residents of South Jersey and our business community. The opportunity for any governor to end it unilaterally should be eliminated,” Murphy added.

Greenwald noted that the bill received overwhelming support from lawmakers from both parties but he did not indicate a veto override was in the works.

“I think our goal would be to have some further conversations with the governor,” he said.

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