Military Spending in Louisiana has $9.64 Billion Economic Impact
Military-related spending in Louisiana creates $9.64 billion in annual economic impact across all regions of the state, according to a study commissioned by the State of Louisiana. Economic activity associated with that spending results in more than 77,000 jobs and pays $348.7 million in state and local taxes, the study showed.
“The five military installations that operate in Southeast Louisiana are vital elements of our regional economy, providing over $1 billion in annual impact locally,” said Michael Hecht, president and CEO of GNO Inc. “Thousands of our neighbors across the region have direct ties to the Armed Forces – with over 11,000 currently employed by the military, 77,000 veterans, and 7,000 retirees. Moreover, the $2 billion-plus in spending by the Department of Defense on contracts in Southeast Louisiana keeps thousands of additional New Orleanians in skilled jobs that continue to be in demand.”
In terms of payroll employment, the military accounts for 3.75 percent of Louisiana jobs – about one out of every 26 jobs in the state. The economic impact of military spending in Louisiana makes up 2.4 percent of the state’s gross domestic product. The $9.64 billion total represents a 25 percent increase in statewide economic impact in the four years since the last such study, which calculated the impact of military-related spending in Louisiana to be $7.7 billion for the 2016 fiscal year.
“From the Battle of New Orleans to LSU’s founding as a military school to the modern-day contributions of Fort Polk, Barksdale Air Force Base and other stalwart facilities, the Armed Forces have loomed large throughout Louisiana’s history,” Gov. John Bel Edwards said. “That influence extends today to our economy, in a big way. Every region of Louisiana benefits economically from the payroll, spending, contracted work and other activity arising from the military’s presence in our state. We extend our thanks to the servicemen and servicewomen on active duty, our skilled workforce involved in defense contract activity and the military retirees and veterans of our state, for the contributions they have made and will continue to make.”
The report, prepared by Business Development Advisors for the 2020 fiscal year, evaluates expenditures at Louisiana military facilities; Department of Defense and Coast Guard contracts performed in Louisiana; and pay to military retirees in the state. The study was commissioned by Louisiana Economic Development and the Louisiana Military Advisory Council. State law mandates an in-depth assessment of the military’s impact in Louisiana every four years.
“As this new impact study shows, the military installations in Louisiana are significant economic drivers for our state,” Louisiana Economic Development Secretary Don Pierson said. “Their affiliated advocacy groups also play a vital role, working on behalf of military facilities as well as military personnel and their dependents. Louisiana’s contribution to protecting our nation’s freedom secures important economic benefits for the Louisiana economy. LED is proud to play an important role in supporting our defense installations and our service men and women.”
Louisiana’s military facilities and assets include:
Fort Polk, near Leesville, one of the nation’s largest military installations. Site of the Joint Readiness Training Center, one of the Army’s three infantry training complexes, Fort Polk has played a key role in Army operations for 80 years. It contributes nearly 15,000 jobs and $770 million in payroll to the economy. Estimated total spending at Fort Polk was $1.36 billion in fiscal year 2020.
Barksdale Air Force Base, near Bossier City, home of the 2nd Bomb Wing of the Air Force Global Strike Command’s Eighth Air Force. Barksdale directly contributes nearly 9,000 jobs and more than $570 million in payroll to the economy. Its estimated total spending approached $719 million in 2020.
Naval Air Station Joint Reserve Base New Orleans, at Belle Chasse. The base supports two Naval Air Reserve squadrons, two Marine Forces Reserve units, a Louisiana Air National Guard fighter wing, an Army Reserve unit, a Fleet Readiness Center, a Navy Reserve Operational Support Center and other military operations. It contributes more than 1,800 naval jobs and over $171 million in spending to the economy.
Coast Guard 8th District, New Orleans. The Coast Guard has multiple operations in the region, including the 8th District headquarters in New Orleans, the Coast Guard Air Station at Belle Chasse and the New Orleans sector office. Coast Guard operations directly contribute more than 1,800 jobs and $192 million in spending to the state economy.
Marine Forces Reserve, New Orleans. Located in Federal City in the Algiers section of New Orleans, the facility employs nearly 1,400 active and reserve military and civilian personnel, with annual expenditures of over $80 million.
Naval Information Warfare Center, New Orleans. The center contributes nearly 600 jobs, including contractors, and $119 million in spending to the economy.
Army Reserve 377th Theater Sustainment Command, New Orleans. The 377th has more than 1,300 workers, including reservists, and contributes more than $37 million in annual spending.
Louisiana National Guard. With headquarters in New Orleans and facilities throughout the state, the Louisiana National Guard contributes more than $536 million in annual spending.
“The Louisiana National Guard remains ready to respond to its federal and state missions by optimizing personnel, training and logistics readiness,” said Maj. Gen. Keith Waddell, Louisiana’s adjutant general. “In doing so, the Louisiana National Guard achieved its highest retention rate in more than 20 years at 86 percent, leading to its current overall personnel strength of 109 percent. This past year, the Louisiana National Guard deployed more than 2,400 Guardsmen overseas and stateside in support of its federal missions. Additionally, the Louisiana National Guard successfully worked with local, state and federal partners to respond to multiple state emergencies during 2021. These missions included Winter Response, Hurricane Ida, May floods, COVID-19 (ongoing) and Cyber.”
Louisiana’s economic development partners on military matters include Barksdale Forward, supporting Barksdale Air Force Base in the Shreveport/Bossier City area; Fort Polk Progress, promoting Fort Polk in Central Louisiana; and the Southeast Louisiana Military Alliance, supported by Greater New Orleans Inc., assisting several military installations in the New Orleans area.
“According to the new economic impact statement, Barksdale Air Force Base provides nearly 9,000 jobs to the area with a payroll of over $570 million,” said Murray Viser, president and chief operating officer of Barksdale Forward. “It is a privilege to welcome these families to our area and to benefit from their participation and involvement in many aspects of our community.”
“Fort Polk Progress is a regional organization focused on coordinating the efforts of our local communities, the State of Louisiana and the Louisiana congressional delegation in supporting the Army, the mission at Fort Polk and the quality of life for soldiers and their families who are stationed in Louisiana,” said Leesville Mayor Rick Allen, the chairman of Fort Polk Progress. “Our supporters are state and regional leaders, business owners, retirees and concerned citizens who want to ensure that Fort Polk remains in the area because Fort Polk and the presence of the Army contribute significantly to our state’s economy.”
Total military contract spending in Louisiana for 2020 was $2.48 billion, continuing a recent growth trend. Military contract spending in Louisiana has increased in each of the past seven years, and 2020’s total represents a 132 percent increase in military contract spending from 2013. This spending includes contracts for the Coast Guard but excludes civil works and engineering services of the Army Corps of Engineers.
Shipbuilding and repairing remains the leading defense industry sector in Louisiana, accounting for $971 million in contract work in 2020, more than 39 percent of all defense contract spending in the state. Other heavy and civil engineering construction accounted for $576.9 million, more than 23 percent of the state’s contract work. Other leading defense sectors in Louisiana in 2020 were engineering services ($96.5 million, 3.9 percent), deep sea freight transportation ($87.8 million, 3.5 percent) and coastal and Great Lakes freight transportation ($86.7 million, 3.5 percent).
The top three Louisiana defense contractors in 2020, based on contract value, were Textron ($510.8 million, 20.6 percent); Weeks Marine ($304.7 million, 12.3 percent); and Bollinger Shipyards Lockport ($253.8 million, 10.2 percent). Other leading defense contractors included Gulf Island Shipyards, Hornbeck Offshore Operators, James Construction Group, Placid Refining Co., Tiya Services, Swiftships and Gravois Aluminum Boats.
Louisiana had more than 26,500 military retirees who received annual gross pay totaling $684 million; this income turns over in the state economy through the tax base, living expenses and personal spending. Spending by Louisiana veterans other than retirees is not considered military spending and is not included in the economic impact. Veteran expenditures were approximately $3 billion in 2019 for almost 277,000 veterans living in Louisiana.
“The Louisiana Department of Veterans Affairs serves all of Louisiana’s 288,000 veterans and their families,” Department of Veterans Affairs Secretary Joey Strickland said. “Last year, our veterans assistance counselors helped bring in more than $1.5 billion in federal compensation and pension benefits to our state. This money goes directly into veterans’ pockets, which in turn positively impacts the communities where those veterans live.”
The complete Military Economic Impact Analysis can be found on LED’s website here.