Study: Military pumps $15.7 billion a year into SC economy
11/13/2012 9:51 AM
11/13/2012 9:19 PM
A new study showing the economic impact of the military on South Carolina could help persuade lawmakers of the dangers of sequestration — the so called “fiscal cliff” — if a compromise is not found before Jan. 1, members of a state task force said Tuesday.
“They need to understand how this will affect us in the local communities, as well as the state level,” both in terms of economic impact and military readiness, said retired Maj. Gen. William “Dutch” Holland, a former head of Ninth Air Force who serves as executive coordinator of the S.C. Military Base Task force. The task force was appointed by Gov. Nikki Haley to protect the state’s bases during the fiscal crisis.
The military in South Carolina — including eight major bases, 56,000 retirees and 900 defense contracting firms — pumps $15.7 billion annually into South Carolina’s economy, according to the new study, recently completed by the S.C. Department of Commerce.
Those military operations and activities represent more than 138,000 jobs in the state generating $7.2 billion in annual payroll, the report shows.
“These (bases) are like big manufacturing facilities,” Deputy Secretary of Commerce George Patrick said. “We wanted this report to be a valid, recognizable economist’s point of view of how the military’s economic impact in South Carolina ripples through our economy.”
The report was produced by Commerce for use by the task force as it works to protect the state’s military infrastructure from possible cuts by sequestration, which would slash $1.2 trillion from the nation’s budget, half to the military.
The Pentagon already has implemented $487 billion in cuts to take place over the next decade, due in part to the end of combat operations in Iraq and a proposed drawdown of troops in Afghanistan. But another $600 billion in cuts over 10 years could be required beginning Jan. 1 because of last year’s debt-ceiling standoff in Congress and the failure of a Congressional supercommittee to make the $1.2 trillion in deficit reductions.
Ike McLeese, a civilian aide to the Secretary of the Army and chief executive of the Greater Columbia Chamber of Commerce, said he hopes that Congress will be able to put aside politics.
“Sequestration was a poison pill (Congress) created to get the supercommittee to do its job,” said McLeese, a task force member representing Columbia. “The supercommittee didn’t do its job. Now they are facing a fiscal cliff. … There’s got to be a more intelligent way to do this with a scalpel not a meat axe.”
Even if the budget does not fall off the fiscal cliff, the state’s military boosters hope to stave off any losses of missions due to an expected round of base closures and realignments -- and perhaps gain some missions.
Comptroller General Richard Eckstrom, who chairs the task force, said that South Carolina bases provide “value” to the military, meaning the bases can absorb multiple missions, are less expensive to operate than in some other areas of the country and -- particularly in the case of air bases -- have low negative impact on surrounding communities.
The state has four major military communities represented on the task force: Columbia, Sumter, Charleston and Beaufort.
Joint Base Charleston is the state’s most lucrative installation, with more than 38,000 jobs and $4.35 billion in annual economic impact, followed by the Space and Naval Warfare Command Center in nearby Hanahan, which supports 27,492 jobs and generates $3.378 billion.
In the Midlands, Fort Jackson in Columbia supports 19,834 jobs and generates $2.012 billion in economic impact, while Shaw Air Force Base in Sumter has 16,445 jobs and a $1.752 billion impact. McEntire Joint National Guard Base in Eastover kicks in another 2,303 jobs and generates $296 million.
In Beaufort, the Marine Corps Air Station supports 8,544 jobs and produces $702 million in annual economic development and Marine Corps Recruit Depot Parris Island has 5,307 jobs and $594 million in economic impact. The Naval Hospital in Port Royal contributes another 1,591 jobs and $167 million in economic impact.
For the first time, the Commerce study — conducted in-house by Commerce staff — figures in the S.C. Army National Guard, which doesn’t have a set base but operates from armories around the state. It supports 12,318 jobs and generates $697 million.
Defense contractors added another 5,800 jobs and account for about 2 percent of the gross state product each year, the report said. Also, pension payments to the state’s 56,000 military retirees totals $1.3 billion a year in economic impact.
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