New study highlights military's role in Maryland economy

Aberdeen, Md -- Facilities such as this one at Aberdeen Proving Ground contributed to the impact of military installations on Maryland's economy.
Aberdeen, Md -- Facilities such as this one at Aberdeen Proving Ground contributed to the impact of military installations on Maryland's economy.(Lloyd Fox / Baltimore Sun)

Maryland's military installations represented about 15 percent of the state's economic output in 2012, according to a report released Monday by the state that showcases the close ties between the military and Maryland's economy.

The study estimated that Maryland's 15 military installations contributed more than $51.8 billion in economic activity in fiscal 2012, up nearly 46 percent from 2008, the last time the state Department of Business and Economic Development commissioned a study.


The growth was powered by the consolidation of military bases to Maryland locations, such as Aberdeen Proving Ground, where the number of direct employees increased to 15,780, up about 4,685 people or 42 percent. Other installations, such as Fort Detrick, also experienced growth unrelated to the base realignment.

The state's 2008 analysis did not estimate what portion of the state's economy was represented by local installations. But Daraius Irani, chief economist at Towson University's Regional Economic Studies Institute, which worked on the report for DBED, said it had increased by about 4 percentage points.

"It's become a bigger chunk of our local economy," he said.

That bigger role, however, means that fiscal belt-tightening in Washington poses a bigger risk to Maryland's economy, Irani added.

"The concern now is to basically figure out how do we diversify," he said. "How do we make sure that those manufacturers that are really tied into the defense industry have a Plan B in case the defense industry slows down?"

Overall, the military posts, led by Fort Meade, generated roughly $23.9 billion in wages and supported about 350,411 jobs in 2012, according to the report. Direct employment at the bases rose roughly 36 percent, to 149,000, while outside payrolls supported by the installations rose about 30 percent, according to the report.

That's a far faster rate of hiring than Maryland overall. Between 2008 and 2012, employment dipped by about 1 percent, according to annual estimates by the Department of Labor. Those figures do not include active duty military members, but do include federal civilian employment.

Since 2012, hiring likely has leveled off or declined at some locations, including Aberdeen, said J. Michael Hayes, a retired Marine Corps brigadier general who heads DBED's office of military affairs. Other places have been hit less by the budget decisions, such as Fort Meade, where the rise of cybersecurity has softened the blow.


"There's been a plateauing if not some slight decreases in the Aberdeen area because of cutbacks in hiring and procurement, but the numbers overall are probably understated because the growth overall, particularly at Fort Meade, continues to progress on a steady basis," Hayes said in an interview after the meeting of the Maryland Military Installation Council.

The Anne Arundel County base accounted for more than 40 percent of the jobs attributed to the state's installations in 2012 and about 43 percent of overall spending in 2012, DBED reported.

The post has about 13 construction projects underway— a building surge driven by new, technology-driven infrastructure needs — and expects to add about 2,310 personnel through fiscal 2019, according to a presentation by Col. Brian P. Foley, the base commander at Fort Meade.

In other areas, the state is trying to prepare to ease the anticipated shift away from the defense industry.

Maryland received a roughly $2 million grant from the Department of Defense's office of economic adjustment, which is being used to identify the small businesses likely to be affected and how they might shift from defense as a primary client.

Rep. John P. Sarbanes, who spoke at the meeting, said he hopes Congress will find a way to increase spending flexibility, rather than adhere to the deep spending reductions lawmakers put in place in 2011.


But the approach would have to apply to non-defense parts of the budget as well as defense spending to win widespread political support, the Baltimore Democrat added, echoing comments made by top Democrats after Senate Republicans approved a budget blueprint last week.

"Politically, there isn't going to be a path, I don't think, to get where we want to get if the approach is to provide relief on one part of the budget and not others," Sarbanes said.

Jill McClune, president of the Army Alliance, which lobbies in support of Aberdeen Proving Ground, said the economic analysis produced for DBED underscores how important the outcome of the budget process will be for Maryland.

"The economic analysis helps us understand just how much that economic impact trickles down through our communities and out to the general population," she said. "We're really not separate. We're all one big community, and everybody's going to get impacted by what's going on in Congress and D.C."