NEWARK - Gov. Chris Christie has conditionally vetoed a plan by the city to cut payroll taxes for businesses that hire Newark residents for more than 50 percent of their workforce.

Newark is the only city in the state that leverages a 1 percent payroll tax on its businesses. Last month, the City Council approved waiving the employer tax for Newark businesses as long as more than 50 percent of the staff is from the city. But the measure must garner approval by the state because it impacts municipal tax revenue.

Christie said he supported the intention but could not allow the city to "act irresponsibly while receiving significant taxpayer-funded aid," he wrote in his conditional veto on Feb. 6. He recommended requiring the Department of Community Affairs to approve any payroll tax reduction.

"It's going to be cumbersome and monotonous but it's better than zero," Mayor Ras Baraka said during an editorial board meeting with The Star-Ledger last week.

About 18 percent of Newark jobs go to Newark residents, Baraka said -- a number he's working to dramatically boost.

In his veto, Christie said he wanted to ensure Newark's budget is not impacted significantly.

Newark is under state supervision and received $9.8 million in transitional aid last year to help close its budget gap. In 2015, the payroll tax raked in $48.8 million -- about 7.2 percent of the city's revenues.

If the plan is ultimately approved, it will likely benefit small- and medium-sized businesses, city officials said.

"The companies that contribute the lion share to our payroll tax will never make that number: Prudential, Panasonic, Verizon, Horizon," Baraka said. "All these companies they just don't have the capacity to do this, they pay most of the payroll tax."

Karen Yi may be reached at kyi@njadvancemedia.com. Follow her on Twitter at @karen_yi or on Facebook.