Dealing With Dollars Lost Due To Base Closures
The National Governors Association Center for Best Practices (NGA Center) has released an issue brief to assist governors and other policymakers address the economic impact of military base closures and realignments.
Military installations are a major source of economic stability for states and localities across the nation. When the U.S. Department of Defense reorganizes its military installation infrastructure through the Base Realignment and Closure (BRAC) process, the resulting economic impact can place a great deal of strain on the local community. Some communities will experience an increase in military activity and associated local growth, while others will be faced with a base closure or downsizing that would contribute to economic distress.
According to the brief, a diversified and balanced financing plan increases the total amount of funding for redevelopment and growth projects and takes advantage of the strengths each level of government offers in stimulating economic activity.
The brief identifies a number of public financing strategies states can use to address the economic impact of BRAC.
* Planning: Develop a comprehensive plan outlining strategies and financing mechanisms.
* Infrastructure Development: Build or enhance public and private infrastructure to stimulate and support economic activity.
* Business Development: Foster new and diverse business activity.
* Workforce Development: Assess and meet the needs of a military community’s workforce.
In many cases, the state is in a good position to facilitate base redevelopment and local growth projects through state-level programs such as cash grants and debt financing through bonds. In addition, states can jump-start the process by passing legislation that increases state financial aid, creates tax incentive programs and allows for the implementation of financing strategies at the local level.
For example, in an effort to bolster the economy due to the closing of Brunswick Naval Air Station in Maine, Gov. John Baldacci recently signed into law tax incentives that would offer a 100% income tax credit to certain businesses that move to Military Redevelopment Zones.
In anticipation of the growth around Fort Bliss, the Texas Transportation Commission has approved a $200 million road construction project that would be financed by a private road construction company. The state plans to reimburse the company over a number of years based on the number of cars that travel the road.
“There is no one-size-fits-all financing plan to address the economic impacts of military base realignments and closures,” said John Thomasian, director of the NGA Center. “A diversified and balanced financing strategy not only increases the total amount of funding for redevelopment and growth projects but also takes advantage of the strengths each level of government offers in stimulating economic activity.”
To download a PDF copy of the brief, CLICK HERE.
