Rep. Josh Gottheimer (D-Wyckoff) became the most prominent New Jersey Democrat to advocate against a proposed tax on financial transactions Tuesday.
Gottheimer, a two-term moderate who is seeking re-election, cautioned a proposal backed by Democratic leaders in Trenton that would impose a quarter-of-a-cent fee on individuals or organizations processing more than 10,000 financial transactions using infrastructure in New Jersey would force New-York based exchanges to flee the state.
“All the banks that have a presence in this building will move, in unison, to a new location in another state,” he said outside of a New York Stock Exchange datacenter in Mahwah. “It’s not a guess that this is going to happen. It’s not conjecture. The New York Stock Exchange has told us they’re going to move, in no uncertain terms.”
The NYSE and NASDAQ Inc., among a host of industry groups, have threatened to pull out of New Jersey if the tax is approved. The NYSE has simulated a trading day at a backup data center in Chicago, and NASDAQ is in talks with Texas about a move to the Lone Star State.
Some proponents of the microcent tax have said the exchanges are posturing, citing the benefits of North Jersey’s proximity to New York and the speed that proximity lends the area’s data centers.
Gottheimer, appearing alongside representatives from the International Brotherhood of Electrical Workers and Bergen County’s Building and Construction Trades Council, cautioned the financial industry’s flight would be passed onto workers, a warning echoed by the unions.
“This is going to devastate our membership,” Bergen County Building and Construction Council President Rick Sabato said. “In the last four months, this administration and the Assembly and the Senate have passed major bills that will ruin our industry, and this is just another one of them.”
Details about the final version of the financial transaction tax are scant. Assemblyman John McKeon, the measure’s prime sponsor in the legislature’s lower chamber, on Monday said the bill’s tax rate had been lowered and the tax itself was given a two-year lifespan.
Even so, some prominent Bergen County lawmakers aren’t thrilled about the proposal, Gottheimer said.
The congressman said State Sens. Paul Sarlo (D-Woodridge) and Joe Lagana (D-Paramus) had reservations about the proposal. Sarlo chairs the Senate Budget Committee.
The unions largely repeated previously issued warnings about the tax’s impact on their workers. The IBEW, this time through Local 164 President and Bergen County Commissioner Tom Sullivan, again said their three North Jersey locals would lose 25% of their annual business if the exchanges pulled out of the state
Gottheimer, like the financial industry, also argued the tax would cost the state’s residents even if the exchanges stayed in New Jersey, charging financial institutions would simply pass the cost of the tax onto consumers.
“When our state’s already hurting, our taxpayers, residents, retirees are about to get completely whacked by this idea, all while our jobs are already being driven out,” he said. “It just makes no logical sense.”
There’ve been few details to support that so far, though the NYSE, NASDAQ and other industry groups have repeatedly as much. Gottheimer on Tuesday said the local electrical company alone would lose millions in revenue if the data centers were pulled out of the state.
“Local utility company Orange and Rockland will lose millions of dollars in revenue to power this facility,” Gottheimer said. “On top of that, the township of Mahwah would lose $2 million in property taxes if they shut their doors.”