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Study puts fine point on over $1 billion in military value for region

This article was published on CumberlandBusiness.com on March 24, 2017.

By: Zack Hoopes

It seems you can never stack the cards too far in your favor, as far as the Cumberland region’s military interests are concerned.

Coming on the heels of what is expected to be a hike in federal defense spending, the Cumberland York Area Local Defense Group rolled out its study this month on the impact of local military installations, with plans to further develop the region’s attractiveness as a military hub.

The study was performed over the past year by consulting firm Michael Baker Associates, sorting data and conducting hundreds of interviews with local businesses and officials.

The top-line finding is that the military presence in Cumberland and northern York counties generates roughly $1 billion in cash flow outside of the military installations’ gates, with over 11,000 military employees in the region as well as private sector jobs supported through military contracts.

The study was funded by the state and Cumberland County, and was spearheaded by the Cumberland Area Economic Development Corporation, a county-owned nonprofit.

CAEDC CEO Jonathan Bowser said earlier this year that the study’s intent is to quantify what sort of boost Cumberland County gets from the military, and what sort of advantages the military has by keeping installations in Cumberland County.

“We want to define exactly why this is a great region and a great area for the military to continue to be present, and also look for some new opportunities,” Bowser said.

One of the major drivers to assemble such data is BRAC – the US Department of Defense’s Base Realignment and Closure program, which has sought to streamline the US military’s physical footprint since the end of the Cold War.

The new study, Bowser noted, would be a tool to help the community make its case for the military to keep local installations open, given the rich benefit they receive in the Midstate, and instead look for cuts in other parts of the country.

The last round of BRAC occurred in 2005, at which time the Carlisle Barracks was listed as a possible candidate for downsizing. Rumors of another round have circulated frequently since, but are looking increasingly less likely.

The Department of Defense would have to request BRAC authorization via the Senate Armed Services Committee, to be included in the annual Defense Authorization Act which comes out of the US Senate.

This presents two possible tipping points – the fiscal need for BRAC, and the political appetite in the Senate for doing so.

Requests by the DoD to initiate BRAC since 2005 have been panned by senators on both sides of the aisle. One of the often-cited issues is the upfront cost of moving equipment out of obsolete military installations and preparing the facilities for sale to a private party.

In 2012, former New Hampshire Senator and Armed Services Committee member Kelly Ayotte blasted the DoD for underestimating costs for the 2005 round of BRAC. The cost of closures was $35 billion in 2005, $14 billion above the DoD’s estimate, Ayotte’s office said at the time.

Further, the Trump Administration is pitching a $54 billion increase in defense spending in the next fiscal year. Even though this number may be cut down by Congress, it significantly reduces the chance of the DoD expecting long-term budget shortages that would necessitate BRAC.

Representatives for both of Pennsylvania’s Senators – Bob Casey and Pat Toomey – said appetite for BRAC was unlikely to increase.

“I’m proud of what PA brings to the table for DoD and will work with local communities to make sure DoD does not make arbitrary cuts that would undermine those contributions,” Casey said in a statement.

Even if another round of BRAC were to come, the defense study makes a strong case that the military gets more value by being the Midstate than it does elsewhere.

The major emphasis of the Baker Associates’ report is convenience – the I-81 corridor in the Harrisburg-Carlisle region carries a full 10 percent of the nation’s GDP.

There are also over 100 other Department of Defense installations within 300 miles of Carlisle, the report calculated, as well as the nation’s major eastern seaports at Baltimore, Philadelphia, and New York.

Another big selling point is the job market. While the Midstate’s unemployment rate is lower than the national average, indicating a tight market for labor, the total workforce is growing at a rapid pace – which means that the military should have no issue finding qualified civilian workers if they offer competitive-paying positions.

Since the recession, the Harrisburg-Carlisle metro statistical area has added over 23,000 according to the Bureau of Labor Statistics.

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