Despite the nation s increasing

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1 BRAC 2005 Matthew Martin and Scott Frisby Despite the nation s increasing commitments to national defense and homeland security, the U.S. military remains engaged in a process to rationalize its existing bases and facilities (known as BRAC). The process of identifying another set of closings will soon begin. BRAC was implemented nearly 20 years ago as a means to increase the efficiency of the military after Congress undertook measures to reduce growing deficits in the mid-1980s. Given the obvious political difficulties in closing bases, Congress set up BRAC to take recommendations from the Department of Defense for base closings and realignments. The BRAC commission reviews the DoD s recommendations and then submits its own to Congress, which, along with the president, must either reject or accept in its entirety. While the BRAC commission can change the DoD s recommendations for closure, in practice most of those bases that the DoD recommends are closed. The first BRAC round in 1988 did more realigning than closure, which was not unexpected given that the reduction in the size of the military was only just beginning. The subsequent end of the Cold War and the reduction in the number of active service members increased the Defense Department s desire to reduce the infrastructure to match lower troop levels. The next three rounds of base closures in 1991, 1993 and 1995 involved the closure of more facilities, including several large bases within each service. The 1993 and 1995 rounds involved the greatest cuts in infrastructure, with the Navy bearing the brunt in both rounds and the Army seeing significant cuts in the 1995 round. Although previous base closures have resulted in a net loss of jobs across the country, the distribution of losses has been very uneven (see Table 1). Some states have even experienced a net job gain in previous rounds through the consolidation of units at remaining bases. Of the three states with the largest fraction of military forces, California has been the only clear loser, while Virginia has lost many fewer jobs, and Texas has enjoyed small job gains. Given the potentially significant economic consequences of base closings, the Department of Defense is obligated to consider the potential economic fallout as one of the criteria in the selection process along with factors that address the needs of the military. This article assesses the likelihood of closure for each major military facility in the nation by considering regional economic conditions and the BRAC criteria used by the DoD. BRAC The next BRAC round is already under way. The major activities to this point include the finalization of the selection criteria that will be used for making recommendations to the president and Congress and a report by the Secretary of Defense certifying the need for another round of base closures. As might be expected, the selection criteria try to balance the needs of the military with the regional economic impacts of any recommendations. Since Congress must ultimately approve any closures or realignments, the military needs to be sensitive to political realities while also considering military expediency. The report from the DoD certifying the need for another BRAC round includes estimates of the overcapacity of facilities within each service (see Table 2). The Army possesses the largest amount of overcapacity at 29%, while the Navy has done the best among the three service departments in trimming capacity through past BRAC rounds (note that the Marine Corps is part of the Department of Navy). The next key date in the process is May of 2005, when the Secretary of Defense must submit recommendations to the BRAC commission and Congress, and November of the same year, when the president must decide whether or not to approve the final list of recommendations. If the president does approve the recommendations, they become legally binding 45 legislative days after approval. Congress wrote the approval delay into the law authorizing this process to give them a chance to enact a joint resolution of disapproval, which would prevent the recommendations from becoming law. This setup gives Congress some oversight of the process, although the oversight is limited to an up or down vote on the entire list of recommendations instead of individual items. Assuming that final recommendations are approved by the president and become binding, the process of actual base closure or realignment will begin with the 2006 fiscal year, which starts in October The Department of Defense will request the budget authority to execute the plan during the normal budget process anticipating approval of the final set of recommendations. Some Congressional members recently made an effort to delay the process until The House version of the 2005 Defense Bill included the 22 REGIONAL FINANCIAL REVIEW / JULY 2004

2 Table 1: Direct Job Losses From Prior BRAC Rounds BRAC 95 Other BRACs Total for all BRACs Alaska -1, ,081 Alabama -5, ,812 Arkansas Arizona 312 1,798 2,110 California -19,372-49,713-69,085 Colorado -2,607-2,006-4,613 Connecticut -2,203 1, District Of Columbia ,032 Delaware Florida 2,998-9,775-6,777 Georgia Hawaii 1,768-3,263-1,495 Iowa Idaho Illinois -1,367 9,230 7,863 Indiana ,221-9,768 Kansas Kentucky -13-1,341-1,354 Louisiana ,833-12,972 Massachusetts ,651-5,176 Maryland -1,802 14,572 12,770 Maine 220-3,345-3,125 Michigan 147-3,354-3,207 Minnesota Missouri -2, ,156 Mississippi Montana North Carolina -2,709 5,276 2,567 North Dakota Nebraska New Hampshire New Jersey -2,303 4,693 2,390 New Mexico Nevada 25 2,151 2,176 New York ,371-9,598 Ohio ,947-2,200 Oklahoma 4, ,760 Oregon Pennsylvania -2,804-10,586-13,390 Rhode Island 572 1,643 2,215 South Carolina 4,161-13,560-9,399 South Dakota Tennessee ,147-6,001 Texas -13,381 14,410 1,029 Utah 4, ,231 Virginia 1,928-3,595-1,667 Vermont Washington ,399 16,251 Wisconsin West Virginia Wyoming ,687-73, ,362 Source: Defense Base Closure and Realignment Commission, July 1995 REGIONAL FINANCIAL REVIEW / JULY

3 Table 2: Estimated Excess Capacity in the Military Department two-year delay, but the Senate version did not. The president stated an intention to veto any Defense bill that includes a delay, so the change was dropped when the rewritten bill emerged from a joint conference. Regardless of future efforts to stall the process, another round is all but certain, given the military s need to find cost saving in the face of new demands from the war on terror and other obligations. Closure probability. The probability that an existing base will be closed is determined on the basis of five criteria. The criteria are as follows: 1. Economy.com s analysts for each state and metro area contributed their estimate of the likelihood of closure for each facility, based on their knowledge of the activities at each base. Analysts evaluation of the likelihood of closure was on a scale of one to five, with five being the most likely to close. 2. The analysts also provided estimates of the likely economic impact of base closures using the same scale. This judgment was supplemented with the correlation of the region s GDP to federal government employment during the past 30 years, and share of all jobs in the region in the military. These three measures were combined in a weighted average, with the analyst s opinion carrying a 50% weight and the other two measures given a 25% weight each. 3. The analysts also assessed the likelihood of civilian redevelopment should a base close based on the same scale. This judgment is supplemented by Economy.com s regional vitality index, which incorporates a broad range of Excess Capacity, % of Total Army 29 Navy 21 Air Force 24 DLA 17 Total for DoD 24 Source: Department of Defense economic information regarding a metro area s attractiveness for development and growth. 1 The analyst s rating was given a weight of 50% and the other two measures were weighted 25% each. 4. The fourth criterion is a simple average of the analysts ranking of other factors listed in the selection criteria to be used by the DoD. There are eight of these, several of which pertain to the needs of the military, requiring more information than is available to most sources outside of the DoD. However, we did not want to omit these factors altogether from the calculation and allowed each analyst to provide an estimate if they had useful insights. 5. The final criterion is the state share of national employment in military and civilian defense jobs. States with a significant share of total DoD employment are less likely to lose a base due to a safety in numbers effect most bases in a given state will remain open, lessening the chance of any single one being closed. This effect is really only important for the three states that together contain more than 30% of all military personnel in the U.S., namely California, Virginia and Texas. Although this is an important consideration, we determined that giving it equal weight with the other four criteria would overstate the importance of this criteria and it is given a lesser weight than the other four criteria. High/low risk. When the five criteria are combined, the results are a 1 See Metro Area Vitality Index, Regional Financial Review, May 2002 for a detailed description of this measure. single score in which a high score indicates a high likelihood of closure. Because these are index numbers and not true probabilities, they are only useful for comparisons of one facility to the rest of the group and say nothing about the overall probability of closure. It is likely that this round will produce a significant number of closures given estimated excess capacity, but we have no way of knowing the magnitude of closures ahead of time. Additionally, because the results are not probabilities, they do not provide much conditional information. For example, given one base closure in a specific state, the likelihood of another closure in the same state probably declines, which would change the overall index number within our rankings, especially for bases that are in close proximity and belong to the same branch of service. However, since we do not know with certainty any of the bases that will be closed, we can only provide an estimate of which facility is more likely to make the closure list next year, given measures of the overall presence of the military in the state. The nation s military facilities are grouped based on this analysis by quintile (see Table 3). Those in the first quintile are at the greatest risk of closure. Although the process uses a number of unique data sources to derive a useful overall result, the process is not so precise that we feel slight variations in our calculations represent significant differences. Thus, there is a degree of uncertainty within these estimates as well as some amount of unexplained differences in the possibility of closure among facilities. Accordingly, our results use quintile groupings as a means to recognize the uncertainties while still providing a way to compare facilities. Most of the results will not be surprising to those familiar with the military. The largest facilities, such as Ft. Hood, TX, Ft. Bragg, NC, Norfolk Naval Station, VA and Robbins Air Force Base, GA, are among the least likely to be closed. Similarly, many of those at greatest risk are either smaller facilities, bases slated for closure in previous rounds, or facilities with another base from the same service in close approximation. The Selfridge Army garrison in 24 REGIONAL FINANCIAL REVIEW / JULY 2004

4 Table 3: Likelihood of Closure, by Quintile Service Installation State First Quintile: Most likely to close or realign Air Force Little Rock AFB AR Army Pine Bluff Arsenal AR Air Force Luke AFB AZ Air Force Buckley AFB CO Air Force Schriever AFB CO Air Force Homestead Air Reserve Base - Miami FL Air Force Dobbins Air Reserve Base GA Air Force Moody AFB GA Army Fort Gillem GA Army Fort McPherson GA Navy Atlanta NAS GA Air Force Scott AFB IL Air Force Grissom Air Reserve Base IN Navy Crane Naval Surface Warfare Center IN Air Force McConnell AFB KS Army Fort Leavenworth KS Navy New Orleans NAS Joint Reserve Base LA Air Force Westover Air Reserve Base MA Army Devens Reserve Forces Training Area MA Army Natick Soldier Systems Center MA Navy Indian Head Naval Surface Warfare Center MD Air Force Selfridge ANGB MI Army Selfridge ANGB MI Air Force Columbus AFB MS Navy Pascagoula Naval Station MS Air Force Grand Forks AFB ND Army Picatinny Arsenal NJ Navy Earle Naval Weapons Station NJ Navy Naval Engineering Station Lakehurst NJ Air Force Cannon AFB NM Air Force Holloman AFB NM Air Force Kirtland AFB NM Air Force Niagara Falls Air Reserve Station NY Army Watervliet Arsenal NY Navy Saratoga Springs Naval Support Unit NY Air Force Youngstown Air Reserve Station OH Air Force Altus AFB OK Air Force Vance AFB OK Air Force Portland Air Reserve Station OR Air Force Pittsburg Joint Air Reserve Station PA Navy Naval Weapons Station Charleston SC Air Force Arnold Air Force Base TN Navy Whidbey Island NAS WA Army Fort McCoy WI REGIONAL FINANCIAL REVIEW / JULY

5 Table 3: Likelihood of Closure, by Quintile (cont.) Service Installation State Second Quintile: Next likely to close or realign Air Force Eielson AFB AK Air Force Elmendorf AFB AK Air Force Davis-Monthan AFB AZ Army Fort Huachuca AZ Navy Fleet Training Center CA Navy Naval Base Point Loma CA Air Force U.S. Air Force Academy CO Navy New London Naval Submarine Base CT Air Force Dover AFB DE Navy Corry Station Naval Technical Training Center FL Navy Key West NAS FL Navy Pensacola Naval Hospital FL Navy Whiting Field Nas FL Marine Corps Albany MC Logistics base GA Navy Naval Computer Telecommunications Area Master Station, Pacific HI Navy New Orleans Naval Support Activity LA Air Force Hanscom AFB MA Navy Brunswick NAS ME Air Force Whiteman AFB MO Navy Gulfport Naval Construction Battalion Center MS Navy Meridian NAS MS Air Force Minot AFB ND Air Force Offutt AFB NE Army Fort Monmouth NJ Army Fort Hamilton NY Army U.S. Military Academy NY Army Carlisle Barracks PA Air Force Charleston AFB SC Army Fort Jackson SC Navy Charleston Naval Hospital SC Air Force Ellsworth AFB SD Navy Naval Support Activity Mid South TN Air Force Laughlin AFB TX Navy Ingleside Naval Station TX Navy Kingsville NAS TX Air Force Hill AFB UT Army Dugway Proving Ground UT Army Tooele Army Depot UT Army Fort Belvoir VA Army Fort Myer VA Marine Corps Henderson Hall VA Marine Corps Marine Corps Base Quantico VA Navy Naval Surface Warfare Center, Dahlgren Division VA Air Force General Mitchell Air Reserve Station WI Air Force F.E. Warren AFB WY 26 REGIONAL FINANCIAL REVIEW / JULY 2004

6 Table 3: Likelihood of Closure, by Quintile (cont.) Service Installation State Third Quintile: Average chance to close or realign Army Fort Richardson AK Army Fort Wainwright AK Army Anniston Army Depot AL Army Yuma Proving Ground AZ Navy Naval Postgraduate School CA Air Force Peterson AFB CO Air Force Bolling AFB DC Army Fort McNair DC Marine Corps Marine Barracks DC Navy Washington Navy Yard DC Navy Panama City Coastal Systems Station FL Air Force Hickam AFB HI Air Force Mountain Home AFB ID Army Rock Island Arsenal IL Navy Great Lakes Naval Training Center IL Air Force Barksdale AFB LA Air Force Andrews AFB MD Army Aberdeen Proving Ground MD Army Fort Detrick MD Navy Annapolis NS MD Navy Bethesda National Naval Medical Center MD Navy U.S. Naval Academy MD Army Fort Leonard Wood MO Air Force Malmstrom AFB MT Navy Portsmouth Naval Shipyard NH Air Force McGuire AFB NJ Army Fort Dix NJ Army White Sands Missile Range NM Navy Fallon NAS NV Air Force Wright-Patterson AFB OH Air Force Tinker AFB OK Air Force Willow Grove Air Reserve Station PA Army Tobyhanna Army Depot PA Navy Nas Joint Reserve Base Willow Grove PA Navy Newport Naval Station RI Marine Corps Beaufort MCAS SC Marine Corps Parris Island MC Recruit Depot SC Air Force Lackland AFB TX Air Force Randolph AFB TX Army Red River Army Depot TX Navy Fort Worth NAS Joint Reserve Base TX Army Fort Monroe VA Navy Naval Support Activity Norfolk, Northwest Annex VA Air Force Fairchild AFB WA Navy Everett Naval Station WA REGIONAL FINANCIAL REVIEW / JULY

7 Table 3: Likelihood of Closure, by Quintile (cont.) Service Installation State Fourth Quintile: Next to lowest chance to close or realign Air Force Maxwell AFB AL Army Fort Rucker AL Marine Corps MCAS Yuma AZ Air Force Los Angeles AFB CA Army Presidio of Monterey CA Marine Corps Barstow MC Logistics Base CA Marine Corps Marine Corps Air Station Miramar CA Marine Corps San Diego MC Recruit Depot CA Marine Corps Twentynine Palms MC Air Ground Combat Center CA Navy China Lake Naval Air Weapons Station CA Navy Lemoore Nas CA Navy Naval Base Coronado [Naval Amphibious Base Coronado/Naval Air Station North Island] CA Navy Seal Beach Weapons Support Facility CA Army Fort Carson CO Army Walter Reed Army Medical Center DC Air Force Eglin AFB FL Air Force Hurlburt Field FL Air Force MacDill AFB FL Air Force Tyndall AFB - Panama City FL Navy Jacksonville NAS FL Navy Mayport Naval Station FL Navy Pensacola NAS FL Army Fort Gordon GA Navy Kings Bay Naval Submarine Base GA Army Fort Shafter HI Army Schofield Barracks HI Army Tripler Army Medical Center HI Marine Corps Marine Corps Base Hawaii Kaneohe Bay HI Army Fort Meade MD Navy Patuxent River NAS MD Air Force Keesler AFB MS Air Force Nellis AFB NV Army Fort Drum NY Army Lima Tank Plant OH Air Force Brooks City-Base TX Army Fort Sam Houston TX Navy Corpus Christi NAS TX Army Fort A.P. Hill VA Army Fort Lee VA Army Fort Story VA Navy NAS Oceana VA Navy Yorktown Naval Weapons Station VA Air Force McChord AFB WA Army Fort Lewis WA Navy Bremerton Naval Hospital WA 28 REGIONAL FINANCIAL REVIEW / JULY 2004

8 Table 3: Likelihood of Closure, by Quintile (cont.) Fifth Quintile: Least chance to close or realign Source: Economy.com Service Installation State Army Redstone Arsenal AL Air Force Beale AFB CA Air Force Edwards AFB CA Air Force March Air Reserve Base CA Air Force Onizuka AS CA Air Force Travis AFB CA Air Force Vandenberg AFB CA Army Fort Irwin CA Marine Corps Camp Pendleton CA Navy Naval Base Ventura County/Point Mugu Site CA Navy San Diego Naval Medical Center CA Navy San Diego NS CA Air Force Patrick AFB FL Air Force Robins AFB GA Army Fort Benning GA Army Fort Stewart GA Army Hunter Army Airfield GA Navy Pearl Harbor Naval Complex HI Army Fort Riley KS Army Fort Campbell KY Army Fort Knox KY Army Fort Polk LA Air Force Pope AFB NC Air Force Seymour Johnson AFB NC Army Fort Bragg NC Marine Corps Camp Lejeune NC Marine Corps Cherry Point MCAS NC Marine Corps New River MCAS NC Army Fort Sill OK Air Force Shaw AFB SC Air Force Dyess AFB TX Air Force Goodfellow AFB TX Air Force Sheppard AFB TX Army Fort Bliss TX Army Fort Hood TX Air Force Langley AFB VA Army Fort Eustis VA Navy Dam Neck Fleet Combat Training Center Atlantic VA Navy Little Creek Naval Amphibious Base VA Navy Norfolk Naval Shipyard VA Navy Norfolk Naval Station VA Navy Portmouth Naval Medical Center VA Navy Naval Base Kitsap WA REGIONAL FINANCIAL REVIEW / JULY

9 Michigan is a good example of a base likely to be closed, as it was on the 1995 list (see Table 4). One of the two Air Force bases in Colorado Springs, Buckley or Schriever, is also at significant risk. Although it is much less likely that both will close, each is at a higher risk of closure than most other facilities. There are a number of states with multiple bases at significant risk, a factor that might lower the chances of any single base appearing on the final list if the BRAC commission were to place another base in the same state on the list. When both the size of the facilities and the number of jobs on the list are considered, however, Georgia and New Mexico are most vulnerable. Both states have at least three facilities at greatest risk and most of them are of at least moderate size, which would increase the economic impact of a closure. Interestingly, California, Virginia and Texas, the three states with the greatest share of military employment, have no bases at greatest threat of closure. Texas and Virginia do have several bases at moderate risk, however. Most of the California bases are lower on the pecking order for base closures, suggesting that past base closures have weeded out most of the excess in the state. California has been the clear loser from prior BRAC rounds, reflecting a high concentration of military assets in the state. The state should be less hard hit this time around, in large part because much of what remains is either more important militarily or will have a greater economic impact on the local and state economies. The analysis produced a few other results worth mentioning. The most at risk bases include five of ten bases saved from previous closure only by the final recommendations of the BRAC commission. In contrast, two bases that were slated for closing in previous rounds, including Red River Army Depot, TX and Brooks AFB, TX, appear less at risk this go around. Additionally, the three military academies, one for each service, have a higher than average chance of closure, despite each being ranked by the analyst as having the lowest chance of closure. In each case, the economic merits suggest that the academies could be closed with a smaller economic impact than many other facilities. However, the rankings do not explicitly consider the institutional importance of a specific facility, a factor that probably renders the academies safe from closure (although bills to close the academies are introduced in nearly every congressional session). There may be a few other instances where a similar argument could be made for bases in the first or second quintile, but to a lesser degree. Finally, note that the bases at most risk of closure appear to be disproportionately Air Force bases. The Air Force does have a greater number of bases than the other two services and they tend to be smaller, reducing the economic impact should a facility be closed. In addition, the Air Force had fewer facilities closed in the last two BRAC rounds than either the Navy or the Army and is likely to see a greater number of closures this time around. Conclusions. This analysis confirms much of the conventional wisdom derived from previous base closures. The largest bases are the most secure both because of their military value and the large economic impact closure would generate. Smaller bases, especially those without top priority missions, will be key targets for closure, despite the objections of congressional representatives. Our analysis indicates that the states most at risk in this round are those with a significant, but not huge, military presence. In particular, Georgia and New Table 4: Active Bases Previously Recommended for Closure From BRAC 1995 Installation State Service Selfridge Army Garrison MI Army Ft. Hamilton NY Army Naval Air Station Meridian MS Navy Naval Warfare Center Lakehurst NJ Navy Brooks AFB TX Air Force Pittsburg Air Station PA Air Force Red River Army Depot TX Army/DLA From BRAC 1993 Installation State Service Charleston Naval Hospital SC Navy Naval Air Station Meridian MS Navy From BRAC 1991 Installation State Service Whidbey NAS WA Navy Moody AFB GA Air Force Note: Includes only major installations as listed in the Miltary Times Installations Worldwide Source: Defense Base Closure and Realignment Commission, July REGIONAL FINANCIAL REVIEW / JULY 2004

10 Mexico, neither of which has been affected much by past closures, have the potential for the greatest losses in this round. Other states with a significant number of military jobs at risk include Arkansas, Colorado, Indiana, Kansas and New Jersey. Air Force bases are at a somewhat higher risk than the other services, even though the DoD estimates that the Army has the greatest amount of excess capacity. This reflects the larger number of Air Force facilities, each of which tends to have fewer personnel than comparable Army or Navy facilities. Finally, although this analysis says nothing about winners, past closures have always produced them. Although base closures can reduce civilian employees of the military, they do not reduce the number of military personnel, so units are relocated when their home base in closed. History unfortunately is not much of a guide here, as some states have reaped large gains in one BRAC round only to lose a similar amount the next. REGIONAL FINANCIAL REVIEW / JULY