SC military has $16 billion impact, almost $1.2 billion locally

The Associated PressNovember 13, 2012 

  • To see details of a report about the economic effect of South Carolina's military bases, click here.

COLUMBIA -- The U.S. military pumped nearly $16 billion into South Carolina's economy last year and it supports about 140,000 jobs, economic drivers that would be severely harmed if automatic federal spending cuts take effect in January, officials said Tuesday.

"The impact is significant," Comptroller General Richard Eckstrom said as he released the study by the state Department of Commerce. "It represents about 10 percent of the entire state economy."

Eckstrom, chairman of the state's Military Base Task Force, said he hopes the new study lets state leaders see how vital the military is to economic growth in South Carolina.

The report was released as the task force has been meeting with the state's congressional leaders on what is being done to avert the so-called "fiscal cliff." That is the package of tax increases and spending cuts that take effect in January unless Congress passes a budget deal.

The study is expected to help make the case against future base closures as well as potential federal cuts known as "sequestration." It seeks to show South Carolina bases offer great military readiness value for the investment. The military's impact is spread across the state, but is concentrated in Beaufort, Charleston, Columbia and Sumter, the report said.

THE LOCAL IMPACT

Three military installations are clustered in northern Beaufort County -- Marine Corps Air Station Beaufort, Marine Corps Recruit Depot Parris Island and Beaufort Naval Hospital.

Combined, they generate almost $1.2 billion for the state's economy, and support 15,442 jobs that pay a combined $636 million. Every 30 jobs on the bases support another 29.9 jobs across the state, according to the report.

The majority of the economic benefit remains within Beaufort and Jasper counties. The bases generated $1,210 million locally, supporting 12,862 jobs that pay a combined $534 million. Of the 29.9 off-base jobs created by Parris Island, the air station and the hospital, 20.3 are local.

The study also breaks out the effect of visitors to Parris Island, many of whom come for Marine recruit graduation ceremonies. Those visitors generated $73.9 million locally, supporting at least 885 jobs paying $25.3 million, according to the report.

The air station's most significant economic effect is on the housing and construction markets, while Parris Island largely benefits the hotel and restaurant industries. The hospital's economic effect is through management, scientific and technological-consulting services.

An additional $91 million is generated for the state by 4,620 veterans linked to the Beaufort bases, according to the report.

Kim Statler, executive director of the Lowcountry Economic Alliance, thinks the long-range benefits of the military bases are underestimated in the report. The alliance is partnering with the city of Beaufort and local businesses on a project to prepare those who have recently departed the military for private-sector work.

'A POISON PILL'

Deputy commerce Secretary George Patrick likened the Army, Air Force, Marine Corps and Navy installations to "big manufacturing facilities" in major communities across the state.

Patrick said the panel wanted a report that gave "a valid, recognizable economist's point of view" on how the military's impact ripples through the state's economy.

For the first time, Eckstrom said, the report provides information on the economic impact of the state's 11,000-member Army and Air National Guard. It also includes the impact of potential spending by the 900 military contractors who work in the state, he said.

Retired Maj. Gen. William "Dutch" Holland, a former head of Ninth Air Force who serves as executive coordinator of the task force, said the report tells those in leadership roles in the state, "how this will affect us in the local communities, as well as the state level."

Columbia Chamber of Commerce chief executive Ike McLeese called the process "a poison pill" purposely designed to get those discussing the budget to work together. He said their message to Washington is, "Quit talking and get the job done."

Adjutant General Robert Livingston said the military cuts that are part of the package are bad enough, but since they must be made across the board, no input is allowed from the nation's defense leaders.

"It's how it's applied" that adds to the problem, the two-star general said.

The Defense Department already has agreed to assume $490 billion in cuts over 10 years, but to double that with no ability to judge how the additional cuts should be made is going too far, Livingston said.

Related content

  1. Pilot phase for Beaufort military-workforce education to take about 60 days, Sept. 5, 2012
  2. Beaufort, economic alliance training program would prepare Marines for jobs, Aug. 22, 2012
  3. Beaufort residents head to DC to fight sequestration, July 23, 2012

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