Economy at risk if Cannon goes down

By Darrell Todd Maurina

Shutting down Cannon Air Force Base would cost the state of New Mexico at least $122 million each year in value-added income, according to a new study by a research team at New Mexico State University — and that’s on top of $111 million in lost payroll from Cannon and $52 million in annual procurement spending to purchase items needed for the base.
“I am an economist — we don’t usually spend a lot of time dealing with the public, but it’s interesting to see people’s interest in this,” said Christopher Erickson, a economics professor at the university who helped write the report. “You expect this kind of study to be controversial because the bases are important to the local economies.”
Erickson’s team was commissioned by the New Mexico Military Base Planning Commission to document what could happen if a base closes.
He said a closure of any of New Mexico’s four military bases would have a much greater effect on the state’s economy than might be the case elsewhere. Statewide, military spending accounts for 11.65 percent of New Mexico jobs and the effect of shutting down Cannon Air Force Base in a rural part of the state far away from major urban centers would be even worse.
“A base closure in New Mexico will have an unusually large impact on the local economy because we are a low-income state in a low-income region,” Erickson said. “Often the military jobs are the best jobs in a community.”
While losing Cannon’s 3,445 active-duty military personnel, 453 civilian jobs, and 497 direct contract jobs would be a blow to the economy, the study showed that each military job at Cannon produces 1.35 civilian jobs in the area and each dollar of procurement spending generates $3.18 of additional revenue for the state.
Most of that economic impact is in and around Curry County. According to the study, about 6,425 non-military jobs in Curry County and adjoining counties and about 425 elsewhere are generated by Cannon’s presence.
While the study includes a county-by-county breakdown of the economic impact, it didn’t take into account Cannon’s off-base housing in Portales. Erickson cautioned that some of the Roosevelt County economic benefits may therefore be wrongly attributed to Curry County.
Unlike civilian employers, military bases attract additional income because retirees bring their military pensions with them and often choose to live near a base where they can make use of their discounted commissary, BX, and other privileges.
“The impact that we measure underestimates the true impact on the county,” Erickson said. “We didn’t pick up the military retirees at all, and the ripple impact on the community could be much greater as military retirees relocated and new military retirees don’t locate there.”
Clovis banker Randy Harris, chairman of the commission’s steering committee, said he was happy with the study committee report though hopeful none of what it predicts in the event of a base closure will happen.
“We’ll be inviting him and his team to come on March 17 to our next meeting in Alamogordo,” Harris said. “If there are any questions the commissioners have, they can get a better understanding of the report.
“I think what the study does is what it was intended to do, which was to provide some kind of basis for people to gauge the economic value of the military installations in New Mexico,” Harris said. “What it tries to do is not only reflect the direct dollars paid from each installation but also the added value, and that is a difficult process to do.”
Harris said the study needs to be viewed as a preliminary document, not a final analysis of the economic consequences of closing Cannon.
“What they were trying to do was to gather as much information as possible as quickly as possible, and we all know if they had another six months to do their work, they could come up with all kinds of more data to show the impact on our community,” Harris said.