Military’s impact on SC economy approaches $20 billion

The impact of the military on the South Carolina economy has grown significantly since 2012, approaching the $20 billion mark, a new study shows. And the military accounts for 1 in 5 jobs in the booming Charleston area.

More than 152,000 jobs are supported by the military statewide, generating $8.6 billion in personal income and about $771 million annually in tax revenue, the study says.

The study, prepared by the Moore School of Business at the University of South Carolina and released Wednesday by the S.C. Commerce Department, highlights how integrated into the state’s economy the military community is – and how painful significant cuts could be, military leaders said.

“It reflects what we really thought would be the case,” said William Bethea, chairman of the Military Base Task Force, which received the report from a USC economist on Wednesday. “There has been a significant, incremental increase since fiscal year 2010 in the impact the military has on our community.”

With congressional sequestration and BRAC, or military base realignment, threats looming, being armed with up-to-date facts about the military’s role in the state’s economy is more important now than ever, said Bethea, of Bluffton.

“We feel that these facts help us make the citizens and the government of South Carolina aware of the significant benefit the military has for our state and therefore, its continued presence in our state is a very huge factor in the health of our economy,” Bethea said.

The military economic impact in South Carolina, measured in the study as the total dollar output of all goods and services produced in the state that can be attributed to the military community, includes all eight major military installations in the state and more than 74,000 personnel, including active duty, reserves and nearly 58,000 retirees, along with more than 600 defense contractor firms.

The Military Base Task Force was formed to blunt the local effects that could be produced by potential base closures or sequestration ordered from the federal level.

The new study is partially an update of the 2012 Commerce department study, expanded to include all elements of the military community in South Carolina, taking a look at the statewide and regional level impacts for each of the state’s eight military installations, said USC research economist Joseph Von Nessen.

More than half of the $19.3 billion annual economic impact of the military in South Carolina accrues to Charleston, about $11 billion, Von Nessen said, while about $4.4 billion of the impact accrues to the six-county area that includes and immediately surrounds Columbia.

A possible worst-case scenario reduction of 3,071 personnel at Fort Jackson, including military and civilians, would result in a $952 million blow to the economy each year, Von Nessen said. Additionally, a multiplier effect would be triggered, causing the loss of more than 8,100 jobs and $421 million in lost wages in the community.

Columbia would shoulder roughly 90 percent of those losses, the study said, accounting for a 2 percent loss of the area’s gross domestic product, a measure of the value of all the goods and services produced each year.

In addition, more than 1,450 retirees would be lost to the area, with an additional $28.3 million annual economic impact, he said.

“So many people know Fort Jackson is here, and they have basic training, but they don’t really have an idea of the economic impact that it has,” said retired Maj. Gen. George Goldsmith, the Columbia representative on the Military Base Task Force.

“This report, being done in just a few months, gives us an opportunity to talk with the Army Evaluation Team about actual dollar impacts we are having here in the Midlands, and also throughout the entire state. It really helps people understand Fort Jackson is quite an important factor in this community,” Goldsmith said.

A full copy of the study will be available online Feb. 4 at www.scmilitarybases.com. An executive summary is available now.

This story was originally published January 28, 2015 at 10:47 PM.