The Economic Contribution
of Military and Coast Guard Installations
to the State of New Jersey
Governor McGreevey Signs Executive Order
Study Objective and Main Findings
This study examines the many substantial economic contributions of military facilities on the State of New Jersey. It is, to date, one of the more detailed statewide analyses of the economic impacts of military facilities.
Profile of Military Bases
· The military's presence in New Jersey is substantial.
· There was over $5 billion in State-based military spending in 2002.
· $1.6 billion of this spending was allocated to military payrolls.
· $3.4 billion of the spending was dedicated to military contracts.
· The substantial military payroll supported 43,000 jobs on military bases.
· Over half of the jobs were those of reservists or members of the National Guard. These are jobs that are generally used to supplement incomes of area households.
Off-base Spending, Multiplier Effects, and Total Military-only Impacts
· Off-base military spending directly contributed to slightly more than 21,000 jobs and $1.3 billion to payrolls of firms operating in the State (a respectable payroll of $61,905 per job). These are largely construction jobs, but also include over 4,000 jobs at Lockheed Martin's facilities in southern New Jersey.
· Multiplier effects of the military spending bring the total number of jobs contributed by the military's presence in the State to over 90,000 jobs! This is about the number of jobs maintained by the state's well-known and robust chemical industry, which includes both pharmaceuticals and oil refineries.
· The 90,000 jobs supported by military spending in New Jersey are supported by over $3.6 billion in payroll.
The Effects of Military Spouses and Military Retirees
· Should the military decide to pull out of New Jersey, the State would also lose the services of many spouses of civilian and military personnel at the bases. These losses should be measured not only in terms of jobs and earnings but also in terms of volunteer time provided to schools, hospitals, and other social service organizations.
· If the bases were closed, many retirees would migrate to take advantage of free or less expensive services provided to veterans at bases. Many of these retirees contribute to the State's economy to supplement their military retirement incomes.
· We conservatively estimate that due to the out-migration of military spouses and retirees 8,000 full-time-equivalent jobs making $370 million would be lost to the economy if all military facilities stopped operating within the State.
Total Economic and Tax Impacts
· In summary, military spending in New Jersey contributes over 98,000 jobs and $4 billion in income to state residents.
· It also annually contributes $4.7 billion in total wealth (also known as GDP) and more than $8.5 billion in business revenues ("output" in Summary Exhibit 3).
· Military spending in New Jersey also contributes at least $193 million in local government tax revenues and $192 million in state government tax revenues to the state. These estimates do not include federal government impact aid to New Jersey schools.
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