MAHWAH, NJ — U.S. Congressman Josh Gottheimer (NJ-5) stood with the Building & Construction Trades of Bergen County and International Brotherhood of Electrical Workers (IBEW) Local 164 to sound the alarm on how a new financial transaction tax being considered by the New Jersey State Legislature will force the New York Stock Exchange back-end facility and other financial data processing centers throughout New Jersey to move out of the state, cost the Fifth District hundreds of jobs, and cause a multi-million dollar loss in local tax revenue.
“I’m here today for one simple reason: this proposed financial transaction tax will cost the Fifth District at least two hundred good paying jobs, including the hardworking men and women of labor, it will force a key sector out of our state, and it will cost our local community significant revenue, two million dollars a year in property taxes, at a time when we certainly can’t afford it,” said Congressman Josh Gottheimer (NJ-5). “As soon as the state imposes this new tax, the back-end of the stock exchange here in Mahwah, and all the banks that have a presence here, will move, in unison, to a new location out-of-state. This isn’t a guess. It’s not conjecture. The New York Stock Exchange has told us, in no uncertain terms, that if we are the only state that decides to tax financial transactions, they’ll have no choice but — for competitive reasons — to pack up this data center behind us, and all the jobs, and move to their existing center in Chicago. That is something none of us can stand for.”
New Jersey is considering a financial transaction tax, which would impose a tax on firms that process large quantities of stock trades and financial transactions through all the electronic infrastructure located throughout New Jersey.
According to the IBEW, 25% of their North Jersey locals work just on data centers alone. The New Jersey State Association of Pipe Trades said recently that this proposed tax would cost many union members their livelihoods.
More than a billion financial trades and transactions occur every day through the New York Stock Exchange’s electronic trading systems in their Mahwah data center. The New York Stock Exchange told New Jersey state lawmakers earlier this week that they are prepared to move operations out-of-state should a new tax be imposed on electronic trades via data servers.
Because of improvements in technology and connectivity, financial firms no longer need to be in close proximity to New York City, as they can place data centers nearly anywhere.
In late September, the New York Stock Exchange tested a transition out of New Jersey, moving their transactions to a secondary data center located in Chicago — meaning that all the jobs and revenue that these centers bring in can easily leave if this proposed tax is imposed.
If the New York Stock Exchange data center in Mahwah closed its doors, the Township of Mahwah would lose $2 million in annual property tax revenue, and local utility company Orange & Rockland would lose millions of dollars in revenue.
According to the U.S. Bureau of Economic Analysis, every dollar spent on financial securities services in New Jersey contributes $1.22 to New Jersey’s economy. The securities sector employs more than 38,000 workers throughout New Jersey. In total, there are nearly 200,000 New Jersey workers employed by the financial services and insurance sectors.
This industry also indirectly supports 55,000 New Jersey workers in other industries, including teachers, restaurant workers, and workers in shopping centers, who all contribute nearly $1.4 billion in New Jersey state and local taxes every year.
In 2012, France imposed a new tax on French stock trading for large French companies and a new tax on high frequency trading. After this was all implemented, one-third of the trading for French public companies moved to London and other European markets, and France did not raise even half the revenue they had projected in 2012 or 2013.
Gottheimer was joined today by Bergen County Commissioner and IBEW 164 President Tom Sullivan, IBEW 164 Business Manager/Financial Manager Dan Gumble, and Building & Construction Trades of Bergen County President Rick Sabato.
Watch today’s announcement HERE.