What’s the military’s economic impact in Arizona?

– [Lorraine] Fort Huachuca
is one of several major military installations
in the state including Davis-Monthan Air
Force Base in Tucson, Luke Air Force Base
in Maricopa County and the Marine Corps
Air Station in Yuma. That’s in addition to more
than a dozen other smaller military assets and
National Guard operations. All told the military supports
tens of thousands of jobs and generates hundreds
of millions of dollars in tax revenue. That’s according to a 2017 study about the military’s
economic impact in Arizona. The report came from
the McGuire company, a public policy consulting firm. The company’s president Alan
McGuire joined me in studio to explain the findings. Take me back, this study
took place a few years ago, but what did it tell you
about the military’s economic impact to the state of Arizona? – Right, so this
is the third study, we did one first with
fiscal year 2000. This was fiscal year 2014. So almost 15 years later. What we saw was that almost
$11.5 billion of total output is produced in the
state of Arizona because of our 10 facilities
all over the state. And it’s over 75,000 jobs. So it’s a huge industry. We don’t think of
it as an industry, but it contributes
to our economy in many many ways, huge impact. – $11 billion is a lot of money. – It’s a lot of money. – How does that translate
into what the taxpayers, the community of the state
can actually see and feel. – It really affects every
aspect of Arizona’s economy because it brings billions
of dollars into the state. That money gets spent and
re-spent and re-spent. And the majority the spending
is actually by the suppliers that sell things to the bases
and and then their employees when they go out and buy
groceries, and cars, and houses and all kinds of goods. – What have studies
like yours actually done for some of the key
stakeholders here, the government, private sector. – You bet, the first study
was done in anticipation of a base closing Commission. And there was concern that one of our bases
would be closed. And we’ve seen that in other
states when basis are closed the impacts can be very
negative on the communities. So a bunch of mayors
got together decided they wanted to take a look
at all of the bases together as a single study, first
time I’d ever been done in the country. And it shocked everybody. It shocked me as an economist. I had no idea. 30 years in this
business I had no idea that the impact of the
bases was as much as it is. And so it raised their
profile tremendously. It led to state legislation
protecting the airspace around the bases. And it led to an awareness
that you can’t encroach on these facilities because
if you do you endanger them, and they may be
closed and go away. – In Arizona every time
we hear of a BRAC coming there’s always a fear,
but it can be a good thing for the Department of Defense to sort of look
at it and realize this is where we can
become more efficient. – Absolutely, BRAC
are very efficient although they have
gotten better. They learned in the very
first round of BRAC cuts that they closed some facilities they could never get back. Things, rare gems that have
been protected for decades and centuries that when
they gave them away they went oh, we’d
like to have that back. And we have a couple of
those here in Arizona. There’s maybe three
that are most notable. The first one is Fort Huachuca. That is the electronic
testing area down there, it’s a unique airspace, we can do testing that we
can’t do at any place else in the world. The second one is the
Barry Goldwater Range, which is a huge
safe bombing range along the southern
border of the state. It’s free of
commercial air traffic. One of the only
spaces in America that’s free of air,
commercial air traffic. And the third one is
the Yuma Proving Ground, which is a huge
artillery facility on the west side of the state. It’s the largest
testing facility in
the world of that kind and they’re responsible
for all the military testing facilities
around the world. – Let’s talk about
contractors, recessions. All those things can
affect the economy, but when Congress passes
a budget that says don’t worry we’ve
got you covered, we may not see those
effects right away? – Well in a sense. The military doesn’t
move by the same cycle that the regular
economy does, right? The economy goes up
and it goes down, and it goes up and it goes down on a regular sort of routine
cycle every eight to 10 years. But the military
is built up based upon international
defence priorities. What do we need to do? Because we train both American
sailors and soldiers here, but also worldwide training. And so that industry
follows a different cycle. So sometimes when the
regular economy is going down the military
economy is going up. That’s very helpful to have
a counter cyclical industry in Arizona like that. – Paint a picture for me, without military
installations in Arizona, what does the state look like? – Our economy would be smaller, but you have to remember
this such a dynamic state. We were growing so much. We would clearly deeply
miss the military. It would not crush us. There are some smaller states
where the loss of their bases would be devastating to them. It would be damaging to Arizona, but it wouldn’t
be a death knell. But we certainly don’t
want to lose them.

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