Why can’t we take the slow COBOL powered State Computer Systems and run it on more powerful servere? Why is a rewrite needed?

More to the point, if you can find compatible hardware to run the old code on, there's really no guarantee it won't run into issues. It's undoubtedly 32 bit, and very likely compiled for an old version of AIX they won't even license anymore.

Let's assume the software is so badly written only one person can effectively use it at the same time.
Let's further assume, one action takes 1 second, and usually 3000 people usually use it daily with 3 actions.
If they all use it over the day, the will be close to zero problems (some persons have to wait a few seconds, but that's not a real problem).
If now 10 000 people decide to use it, their actions take 30 000 seconds ~ 8 hours, so it will be constantly blocked (assuming everyone uses it at "normal" hours).

(The example is purely fiction, but it seems not to far away from the reality)

Of course, you can now upgrade the database and app servers - but the architectural problem remain, especially if amount of users is constantly raising.
And to scale on more machines, the code must be certainly rewritten.

@SortOfTested If they use z systems (former system/390) shouldn't even code for system/360 from the 60s still run?

@sbiewald
Potentially, assuming the link editor, base library, RTL and binders were present to make dos/360 software compatible with the 64-bit runtime. I was mostly trying to establish a frame of reference most people might know. The reality is it's probably OS400 on a System I AS/400.

Given IBM's track record, I wouldn't trust anything they sell, or that anyone from GS would be able to make it work.

Just put it in the cloud.

@SortOfTested AS/400 (PowerPC architecture) is completely different than (System/360 | System/390 | System/z).

IBM sells 100% compatibility between those mainframes, but only if they were written for (OS/360 | OS/390 | z/OS) - even if they originally used punch cards or magnetic tape.
I don't know if the sell the same for (AS/400 | System i) with AIX or even (OS/400 | IBM I).

Unfortunately I don't know whether z or i mainframes are used in New Jersey.

You could do that and spend 100.000$ more every year, or you could rewrite it once for 100.000$ and never have to worry about it again, maybe even saving on yearly server costs.

@sbiewald
It wasn't really a guess. I was answering the original question as simply as possibly. IBM sold the crap out of as400s to the governments and banks during the time period they wrote the system in new Jersey. The odds of it not being an as400 are low.

@PrivateGER
The systems are IBM, and IBM doesn't get out of bed for less than $10 million. Each blade in the 5u datapower chassis we have at work are $500k each, the most expensive component in them are the fiber HBAs, which list at $2500 each. That's before licenses for the software on it, which is $1M a core. They are literally 10x markup.

@SortOfTested Ah, IBM. That does explain a lot. I thought it was a smaller system.