June 11 (Bloomberg) -- Chris Christie has awarded $4 billion in business tax breaks since becoming governor, in a “largely unsuccessful” effort to boost New Jersey’s economy, according to a report from a group critical of the incentives.
Under Christie, the grants have become more focused on keeping jobs and less on creating new ones, said Jon Whiten, deputy director of New Jersey Policy Perspective, a Trenton-based group that advocates for measures to benefit the poor. The share of jobs already in New Jersey that were tied to subsidies has surged to 43 percent from 25 percent in the 2000s, according to the report.
New Jersey’s failure to recover from the recession as quickly as its neighbors has had Christie, a second-term Republican, defending his job-creation policies, which include tax breaks and reduced business regulation. Last year, the governor streamlined the incentive program, a move he said would help make New Jersey more competitive and create jobs.
“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,” Whiten said in the report released today.
The state Economic Development Authority, which awards the grants, operates “in strict compliance” with statutes passed by the legislature, spokeswoman Erin Gold said by e-mail.
“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,” she said.
Since February 2010, New Jersey companies have regained 125,700 jobs, about half the number lost during the slump. New York got back all the jobs it shed by 2012.
Eight of New Jersey’s 10 largest subsidies have come since 2010, the year Christie took office, including $210.8 million for Newark-based Prudential Financial Inc. to build a new office a few blocks away from its old one, according to the report. Panasonic Corp. was awarded $102.4 million to move its North American headquarters to Newark from Secaucus after the company had threatened to leave the state.
Since the incentives overhaul, the development authority’s approval of subsidies has more than doubled to an average monthly rate of $165.3 million, Whiten said. The policy group calls for the awards to be a smaller part of New Jersey’s economic-development strategy, so the state can invest in other areas that will make it attractive to business, including education, public safety and transportation.
“During a financial crisis as severe as the one facing New Jersey, the current subsidy surge is far more than just ineffective -- it’s a grave threat to the state’s future,” Whiten said.
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