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Military Money Impacts San Diego


More Department of Defense dollars are now spent in San Diego County than in any other county in the nation. A new report highlights the growing influence of military spending on San Diego’s economy.

Military Money Impacts San Diego

(Photo, right: Admiral Christine Hunter;  Jesse Atkinson of UCSD; Major General Mike Lehnert, Commanding General, Marine Corps Installations West;  Rear Admiral Len Hering, Commander, Navy Region Southwest; and SDMAC president, Terry Magee announce the results of the latest study of the military’s economic impact on San Diego. Alison St John/KPBS )

More Department of Defense dollars are now spent in San Diego County than in any other county in the nation. A new report highlights the growing influence of military spending on San Diego’s economy. KPBS reporter Alison St John has more.

SDMAC is San Diego’s Military Advisory Council. It’s a private business group that advocates for military interest in San Diego.

Terry Magee of Lockheed Martin is SDMAC's President .

Magee: The San Diego area, which we define from the northern boundary of Camp Pendleton down to the border of Mexico and encompassing most of East County, has the largest concentration of military in the world. (story continues below)

Magee and the region’s top military leaders stood with the North Island Naval station in the background, to announce a new analysis of what that means to San Diego in dollars and cents.

Magee: This comprehensive study documents that the military in the San Diego area in 2008  will contribute $25 billion  to the local economy and account for 27 percent of all the jobs in the area. 

These figures are significantly different from numbers quoted in a study put out by the San Diego Chamber of Commerce last year. That analysis concluded the military impact was closer to $18 billion a year, accounting for 20 percent of jobs.

Marney Cox, chief economist for the regional planning agency, SANDAG , says the military is a significant part of San Diego’s diverse economy, but the growth in biotech, high tech and communications jobs matches the growth of military contracting. Cox  doubts the latest numbers that suggest more than a quarter of San Diego’s jobs depend on military spending.

Cox: We employ probably 1.5 million people here in the region - that would take ‘em up to 400,000 odd jobs, it’s just too big, the number’s just too big.

The author of SDMAC’s report’s is Jesse Atkinson , a graduate of UCSD’S  Center on Pacific Economies which bills itself as an academic resource for policy analysis. Atkinson says he based his number on the latest figures from the consolidated federal funds report and from interviews. 

Atkinson : A lot of the time we spent was talking with military installations as well as defense contractors to look at the government data to say does this seem right?

The latest federal figures are from 2005. Atkins projected 2008’s military spending, assuming Department of Defense spending in San Diego goes up an average of 7 percent a year.

That may seem like a lot, but the report shows DOD spending in San Diego jumped 30 percent after 9/11, and has been going up more modestly but steadily ever since.

  navy broadway.jpg  Rendering of the Proposed Navy Broadway Complex. Manchester Development

The results of this report are likely to be critical in future debates over military projects in San Diego. For example, the Navy is pushing for a controversial redevelopment of its headquarters on Broadway, one of the most scenic bay front sites in San Diego.

Admiral Len Hering denies this has anything to do with the timing of the new report, but did refer to the project.

Hering: The central role of the Navy in the region serves to highlight the focal mission of the Navy Broadway Complex. Downtown is the center for the regional coordination of civilian government and businesses, and will house the world wide contracting headquarters of the Navy.

Hering says the construction of the Navy Broadway Headquarters would result in a $2.7 billion  impact and an infusion of more than 22,000 jobs.

And this was not the end of the good economic news from the military leadership. Major General Michael Lehnert of the Marine Corp announced the DOD plans to spend  $4.7 billion on new housing and training facilities in the region within the next five years.

Lehnert : This unprecedented military construction effort will be divided into contracts small enough to give local construction companies an opportunity to bid competitively against the big guys. This plan translates into lots of work for local construction companies and jobs for San Diegans.

Lehnert added that DOD plans to expand the Marine Corp by 27,000 personnel. He says 4,000 of them will be based at Camp Pendleton. 

Whichever way the numbers are crunched, San Diego is clearly a target of growing Department of Defense investment. DOD spending in the region was $7.5 billion in the year 2000. It is more than double that now.  

Alison St John, KPBS News.

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