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Economic officials keeping close eye on federal budget talks, funding

11/22/2011

 

Economic officials keeping close eye on federal budget talks, DoD funding

 
 

Officials with local economic development agencies say they are watching and waiting as Congress ponders staggering federal budget cuts.

A congressional supercommittee has been tasked with finding at least $1.2 trillion in cuts to the budget to be implemented over the next decade. Failing an alternative plan, half that figure would be sliced from Defense Department funding.

The decisions to be made in Washington, D.C. are far from inconsequential for Onslow County. According to U.S. Census data, the county received $2.9 billion in federal spending in 2010, roughly 3 percent of total federal funds allocated to the state. The lion’s share of the funding, over $2.1 billion, belongs to military salaries and projects, thanks to the presence of Camp Lejeune and Marine Corps Air Station New River.

A whopping 67 percent of all incomes in Onslow County are from federal civilian or military jobs, according to figures from the Bureau of Economic Analysis. In total military salary dollars received, Onslow is second only to Fort Bragg’s Cumberland County within the state.

But while the strong military presence has shielded the county from the worst of the economic downturn in recent years, it means the region is especially vulnerable to federal budget cuts.

One area of concern is loss of local military personnel. This month, Marine Corps leadership published documents indicating plans to deactivate a number of large Camp Lejeune units as part of a move to decrease the size of the force by 14,000 troops, confirming suspicions city and county officials have had since the beginning of the year.

Jacksonville Onslow Economic Development deputy director Sheila Pierce said personnel cuts may be the most costly to the local economy. Area businesses thrive on troops’ demand for haircuts, restaurant meals, gas and more, she said.

“That’s where we’re going to see the more immediate and traceable economic impact in the community: their dollars” Pierce said.

According to an economic impact statement released by Camp Lejeune at the beginning of the year, the base’s economic footprint was on the order of $3.6 billion in 2010, including a staggering $597.6 million in vertical construction and $680.4 million in materials, supplies and services. Local military healthcare costs added up to $83.8 million.

Aboard the relatively small air station, economic impact amounted to nearly $500 million, according to official reports.

Another concern: in a late adjustment to overcrowding and demand caused by the migration of 65,000 troops and family members to the area in 2008 because of the Grow the Force Initiative, area infrastructure and housing developments continue to grow despite expectations of future downsizing.

Jacksonville city manager Richard Woodruff told the Daily News that the city had approved roughly 3,900 apartment housing units in the last two years, and about 1,300 of the projects had not begun construction yet.

“We are seeing a slowdown in the pace of units, and we’re seeing very few new projects being proposed,” Woodruff said, adding that single-family home construction was continuing at a reasonable pace.

A boom continues in local commercial growth: According to documents from the Jacksonville City Planning department, plans are underway for up to half-a-dozen new hotels; and about as many locations for major restaurant chains are expected to open in the next year.

For one organization founded to facilitate local military growth, the impending cuts and force drawdown necessitates a whole new mission.

James Jarvis, a spokesman for the Military Growth Task Force in Swansboro, said the organization is moving away from its military focus and looking at ways to support civilian infrastructure growth and the agriculture industry.

“What we’re focused on now is less about military growth and more about helping the nine counties in eastern North Carolina prepare for growth in general,” Jarvis said. “We’re thinking regionally about how we can institutionalize growth.”

Jarvis said organization officials had not ruled out the possibility of changing the organization’s name, too.

“We’re still looking at that,” he said.

 

Contact reporter Hope Hodge at 910-219-8453 or hhodge@freedomenc.com.