Governor defends use of fund to protect military bases

Gov. Janet Napolitano is defending her decision to raid a special fund designed to save military bases even as she pushes to do more to keep them in Arizona.

The Napolitano-backed budget purposely skips the requirement that the state put $4.8 million a year into the Military Installation Fund. That account is designed to give the state Department of Commerce money to buy up land - or at least the development rights - around military bases.

And the budget also took another $3 million in that account, left over from prior years, to spend on other priorities.

That move came as the Department of Commerce was preparing to release a report on how military bases affect the state's economy. state. The new study, finally released Monday, warns that the $9.1 billion annual impact could be endangered if the Base Realignment and Closure Commission decides that encroachment from development puts the mission of the bases in jeopardy.

Napolitano said Wednesday that her decision to take money from the fund doesn't threaten her dedication to protecting military installations in her state.

"This fund is only one small slice of a very big pie," the governor told The Sun during a phone interview. "The fund is only a piece of what we do to support military installations. Besides, when the budget gets better - and I know it will - I fully anticipate that we will restore those funds."

Napolitano also pointed to the state's $2 billion deficit. She stressed being in a "tough place where tough decisions had to be made" to save the budget process.

"A cut should not be equated to a lack of support (for the military)," the governor said, adding that she helped create the fund in the first place. "There is no bigger proponent of this fund that I am. We stand 110 percent behind our military. It's a big part of our economy and a big part of our heritage."

But the ability of Arizona to halt development around military bases, absent actually buying the land, may be limited: A 2006 measure approved by voters prohibits state and local governments from enacting land use regulations that reduce the value of someone's property.

Tom Finnegan, co-chair of the Military Affairs Committee, which administers the fund, called the budget decisions problematic.''

He said the the panel will have no money to give out this budget year, potentially undermining Arizona's efforts to save the bases. Finnegan said he and Lisa Atkins, the committee's other co-chair, met with the governor Monday and expressed our dismay.''

Napolitano said she has heard no negative reaction from Arizona's military leadership regarding her funding decisions.

"Nothing. Zero," the governor said, adding that the majority of concern over the issue stemmed from a single Arizona journalist that she did not name.

Arizona had been hit once, losing Williams Air Force Base in the early 1990s.

That first version of the report, produced in 2002, was designed to give state and local leaders some idea of what was at stake with a new round of BRAC. At that time the total economic impact to the state was less than $5.7 billion a year.

It also led to that 2004 law to protect bases from encroachment.

Ultimately, Arizona managed to escape with no real damage in the 2005 round, with just 550 jobs lost in the entire state. The largest of those were at Luke Air Force Base which shed 101 military and 177 civilian jobs.

But the new report released Monday warns that another round of BRAC is expected in the years ahead. One function of the report is to warn of potential economic impacts.

"Maintaining these operations and the jobs and the jobs and economic output they support should be a priority of state and local government,'' the report states. And encroachment remains an issue.

The study warns that the bases were on the fringes of population centers when they were created. That is no longer true.

"In the last few decades, Arizona's sustained growth and development have, in some cases, brought development closer to the formal boundaries of some bases and into the adjacent, off-base areas that are crucial to the safe and prudent execution of military activities from those facilities,'' the report reads.

Finnegan said the whole idea of the 2004 legislation was to provide a steady source of funds for 20 years. He said that steady commitment to buying up property would mean a lot to convince the BRAC commission that the state is serious about protecting the bases from encroachment.

He said if that funding is suspended for one or two years the whole thing will die.''

Finnegan also said the inability to buy up property near bases right now is a missed opportunity, as land prices may never be lower.

His committee did manage to award more than $4.1 million last month, before the money was swept from the account. Funded projects included land near Davis-Monthan Air Force Base in Tucson, the Yuma Marine Corps Air Station and near an auxiliary air field near Gila Bend.

The study says that loss of any of the state's military facilities could have a big impact.

With more than 45,000 employees, the state's military is almost as large as state government, with 49,000 workers, not counting the universities. And it is far larger than Wal-Mart which, at 29,000, is Arizona's largest private employers.

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MAJOR ARIZONA MILITARY INSTALLATIONS

- Fort Huachuca
- Davis-Monthan Air Force Base
- Luke Air Force Base
- Marine Corps Air Station Yuma
- Army Yuma Proving Ground
- Arizona Air National Guard at Sky Harbor
- Arizona Air National Guard at Tucson International
- Arizona Army National Guard
- Western Army National Guard Aviation Training Site at Pinal
Airpark

Source: 2008 report for Arizona Department of Commerce

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BASIC PERSONNEL STATISTICS

- Active duty permanent - 19,402
- Reserves - 7,471
- Rotational - 1,198
- Military students - 3,292
- Civilians - 14,205
- Total - 45,568

Source: 2008 report for Arizona Department of Commerce

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PAYROLL AND RETIREMENT BENEFITS (IN $ MILLIONS)

- Active duty permanent - $938.4
- Reserves - $107.3
- Rotational - $13.9
- Military students - $71.2
- Civilians - $748.4
- Linked retirees* - $245.3
- Total - $2,124.7
*Based on 25 percent of income from military retirees within 50
miles of a military installation

Source: 2008 report for Arizona Department of Commerce

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SPENDING STATISTICS (IN $ MILLIONS)

- Contracts and direct spending, maintenance and operations -
$674.8
- Construction and building, maintenance and repair - $269.9
- Spending for supplies - $973.1
- Utilities - $40.5
- Education payments - $16.6
- Health services - $324.2
- Commissary and exchange sales - $332.0
- Total - $2,631.1

Source: 2008 report for Arizona Department of Commerce

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Sun staff writer Darin Fenger contributed to this report.