Spending on corporate subsidies by the state of New Jersey has risen more than sevenfold under Republican governor Chris Christie, according to a study published on Wednesday, which concluded that the awards had done little to boost the state’s flagging economy.

New Jersey has awarded tax breaks or credits at a rate of $75.9m per month since Christie came to office in 2010, compared to $10.1m per month during the previous decade, according to a report by New Jersey Policy Perspective (NJPP), a liberal-leaning thinktank.

The study found that in all, $4bn worth of subsidies had been awarded to businesses in the past four and a half years by state authorities under Christie – more than three times the $1.2bn in subsidies that were given out in the prior 10 years.

It follows reports this month by the Guardian on a $106m state subsidy that was awarded to a property venture of a Christie friend and donor, and a $223m tax break given last month to a development by Prudential, the biggest corporate funder of his official mansion.

Christie, hailed as an early frontrunner for his party’s 2016 presidential nomination before his office was engulfed in the George Washington bridge scandal, has made the subsidy programs a key component of his governorship, claiming they would boost economic activity in the state. The increase in spending has been approved by the Democratic-controlled state legislature.

Michele Brown, a longtime Christie ally who heads his economic development authority (EDA), which awards the subsidies, said in January the $1.2bn worth given out in 2013 would “result in new jobs, increased private investment and an enhanced quality of life for residents”.



Yet New Jersey has badly trailed the rest of the US in recovering from the 2008 recession. The state has regained only half the jobs lost during the recession compared with 83% that were recovered nationally, a Rutgers University study found at the end of last year.



A comprehensive review of economic data last month by the Newark Star-Ledger found that “during Christie’s governorship, only New Mexico has generated private-sector jobs at a slower pace than New Jersey”. The state is facing a budget shortfall of $2.7bn over the next year and has had its credit rating downgraded five times since Christie entered office.



“New Jersey has bet the ranch that handing out tax breaks to mostly large corporations alone will somehow improve our economic future,” Gordon MacInnes, the president of NJPP, said in a statement accompanying Wednesday’s report. “So far, it’s clear that the bet isn’t paying off”.



The report directed particular criticism for the decision by Christie’s administration to award hundreds of millions of dollars in subsidies in recent years to companies that were considering leaving New Jersey and taking “at-risk jobs” – and the promise of future jobs – with them to other states. Before its second subsidy award last month, Prudential, the insurance corporation, was given a $210.8m tax break in 2012 to build a new tower a few blocks from its existing Newark offices. Goya, the country’s biggest Hispanic-owned food firm, received a tax break worth almost $82m in October 2011 to move two miles from Secaucus to Jersey City.



Panasonic, the electronics firm, received a $102.4m subsidy in 2011 to move headquarters “one train stop, from Secaucus to Newark”, as NJPP put it. “This is another success story about one of our largest businesses choosing to stay in New Jersey, continue to grow and invest in our state and people,” Christie said of Panasonic, at a ceremony to break ground on the new facility.



“While no one wants jobs to leave New Jersey for other states, it’s far from clear whether a tax break is reason enough for a company serious about leaving to change its mind, or if threats to move jobs are merely a convenient way for companies to secure another tax reduction and improve their bottom lines,” wrote the authors of the NJPP report.

They also found that the cost of each job due to be created or retained in the state by some corporate subsidies had more than doubled under Christie’s governorship. The “per-job cost” of jobs-related state subsidy schemes since Christie came to office is $33,853, compared to $16,591 in the last decade, the study found.



Christie signed a bill, which passed with bipartisan support, overhauling the state subsidy schemes last September. It contained language that specifically enabled the passage last December of the $106m subsidy for the property venture involving his friend, Jon Hanson, which the Guardian disclosed this month.



Some critics have called for the subsidy deals to be subject to New Jersey’s law against “pay to play”, which bars state authorities from contracting goods or services from firms that have made political contributions.



The study by NJPP said that the early indications were that the new law, the Economic Opportunity Act, had “opened the floodgates” to even higher spending on corporate subsidies. An average of $165.3m have been awarded per month since the overhaul, compared with $63.1m per month beforehand, according to the study.



MacInnes said that New Jersey policymakers had “decided to double-down on this failed approach, and now the odds against the taxpayer are even longer”. He said: “The bottom line is that New Jersey’s financial crisis worsens with every taxpayer-subsidised payday for a very small share of New Jersey’s businesses.”



A Christie spokesman, who has previously maintained that there is no connection between corporate subsidies and political donations, referred an inquiry about the report to the EDA.

Erin Gold, a spokeswoman for the authority, said in a statement: “The EDA administers these bipartisan, legislatively created incentive programs with the highest level of due diligence and in strict compliance with the statutes.



“This includes conducting a comprehensive net benefit analysis to ensure that projects will result in a net positive impact to New Jersey, and requiring that projects first generate new tax revenue, complete capital investments, and/or hire or retain employees to receive the approved benefits.”

