| Description |
The upcoming round of Defense Base Closure and Realignment (BRAC) is threatening the existence of Hill Air Force Base (Hill AFB). The Department of Defense is aggressively approaching this round of BRAC in its attempt to eliminate 20% to 25% of current capacity. The purpose of this study is to assess the economic, demographic and fiscal impacts of closing Hill AFB on the state of Utah and on the Davis/Weber region. These impacts, which have been generated using the REMI model, project the changes in employment, population, earnings, income and business activity that result from closing Hill AFB. Hill AFB is located in northern Utah approximately 30 miles north of Salt Lake City and eight miles south of Ogden. The base currently covers almost 6,700 acres and stretches across two counties-Davis and Weber. Hill has had a presence in Utah since 1920 when the War Department established the Ogden Arsenal Army Reserve Depot in the area now occupied by the northwestern portion of Hill AFB. Over time, Hill's missions have changed and expanded. Today, the missions of Hill AFB encompass supply and repair of aircraft and missile parts, including munitions storage and handling. The base is one of three air logistics centers in the USAF Materiel Command, serving as home to the Ogden Air Logistics Center which provides worldwide engineering and logistics management for the F-16, A-10, Minuteman III and Peacekeeper Intercontinental Ballistic Missiles. Hill AFB has been the largest component of Utah's defense sector, and one of the largest employers in the state for decades. Long established as an engine of economic growth, Hill AFB directly pumps more than $1.0 billion into Utah's economy each year. The direct operations include a Utah payroll of $962.2 million, direct employment of about 20,000 workers and local purchases totaling $152.9 million.1 In 2003, Utah's defense industry (primarily Hill AFB) was a mainstay that helped steady the Utah economy. Clearly, Hill's economic contributions are substantial and an important source of economic activity in the state of Utah. The actual probability of the complete closure of Hill AFB is unknown. A partial closure scenario that retains some of the missions on the base while eliminating others is quite possibly a more likely outcome. At the request of the research sponsors, only the full closure of the base has been modeled here. Key Findings The information presented here assumes a phased shutdown of Hill AFB that begins in 2006 and is completed in 2008. For most of the analysis, the impacts are presented for 2009 and 2020. The year 2009 was selected to capture the full impact of the base closure after all military personnel and their dependents are realigned but before market adjustments begin. The year 2020 was chosen to show the long-term, permanent impact after markets adjust to the closure of Hill. Statewide Impacts (Financial projections are in constant 2001 dollars) Short-Term Impacts • In 2009, the impact of closing Hill AFB will be a loss of 47,400 jobs, an annual decline of $2.35 billion in earnings and $2.29 billion in personal income. Hill's closure shrinks the state's economy by $3.58 billion (a decline of 2.6% from the projected baseline). The annual loss of state tax revenue will be $192.4 million. • The employment impact, while considerable, does not result in large-scale unemployment. Employment growth statewide will continue as other sectors of the economy create jobs. • The population impact of closing Hill AFB will be 31,000 fewer people living in the state than if Hill remained in operation. The population impact includes about 7,600 school age children, or about 1.3% of the projected school age population baseline of 578,000. The impact on school age population will moderate but not eliminate the upcoming school age population boom expected to begin in 2005. • Closing Hill AFB will lower per capita personal income by $542 in 2009; this means that each person in Utah will have, on average, $542 less to spend than if Hill AFB remained in operation. |
