Military spending vital to Springs economy

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Despite continued worries about the economy, one thing is certain — the economic impact of the military is vital to the well-being of the Pikes Peak region.

More soldiers equal more spending, sales tax revenue, construction and an overall boost to the local economy.

And although the area’s Air Force installations have “significant” impact on the community, economists and regional planners have tended to focus on Fort Carson — with good reason.

As the state’s second largest employer, Fort Carson accounts for 10 percent of all economic activity in El Paso County, including $950 million in annual military payroll, $67 million in civilian payroll, $192 million in local purchases and $141.5 million in TriCare payments.

During 2008, the Mountain Post’s economic impact was $1.8 billion, including $428 million in construction.

The Fort Carson Regional Growth Plan projected $2.4 billion in military construction at the Mountain Post from 2006 to 2015. About half of that has been spent.

The Mountain Post is “one of the few games in town actually doing construction,” said Kate Hatten, military impact program manager for the Pikes Peak Area Council of Governments.

But having so many eggs in a single basket isn’t without challenges.

Troops are in a constant state of flux. At any given time, some brigades are deployed and others are returned.

“Because of deployment cycles, there are 5,000 to 10,000 soldiers who aren’t actually here,” Hatten said. “They’re moving out of apartments — they’re not buying sandwiches at Quiznos.”

New troops

Fred Crowley, senior economist at the University of Colorado at Colorado Springs, expects about 6,500 troops to arrive at Fort Carson during the next few months.

Including family members, about three people per household, that adds up to about 20,000 people, he said.

According to the Department of Defense, the average wage and benefits of a soldier is $55,000. Crowley said that includes allowances for meals, clothing and housing, which are not taxed.

“The 6,500 troops will create local demand for food, clothing, cars and entertainment,” he said, “which in turn will create about 5,000 more jobs in the community in kindergarten through 12th grade education, childcare, adult education, restaurants, retail, etc.”

About 4,500 to 5,000 of the troops will need off-post housing, and about 60 percent of those living off post will buy homes, according to a 2001 Rand Institute study about military behavior. Their arrival will help absorb vacancies in the multi-family market, Crowley said, and likely be “very positive” for foreclosures.

“Higher-ranking sergeants, warrant officers and officers look to buy,” Crowley said. “And with their incomes, they can afford a nice house.”

Crowley conducted a study for Fountain which showed officers and higher-ranking sergeants could conceivably buy homes in the $275,000 to $300,000 range.

Another area of economic impact for the region is sales tax, retail and entertainment spending.

“Unfortunately for the young troops, they tend not to save money — they spend it,” Crowley said. “The junior enlisted troops are a great tax generator for our community. They have $15,000 to $20,000 in discretionary income. They don’t cook for themselves, so almost all of their expenditures are taxed, versus a typical household that buys groceries.”