[CPEO-MEF] GAO Overview of Past Base Closures

[Lenny Siegel <lsiegel@cpeo.org>]

On August 28, 2001, Barry W. Holman, the General Accounting Office's
Director for Defense Capabilities and Management, testified before a
Subcommittee of the House Government Reform Committee. His testimony,
"Military Base Closures: Overview of Economic Recovery, Property
Transfer, and Environmental Cleanup" (GAO-01-1054T) is available from
GAO's web site, http://www.gao.gov/audit.htm (listed under August 28, 2001).

Holman's testimony did exactly as promised: It provided an overview of
the impact of base closures on communities from the 1988, 1991, 1993,
and 1995 Base Realignment and Closure (BRAC) rounds. Much of the
information is not new, but as a package it provides solid background
for current proposals for a new base closure round. The base closure
process is torturous; there is a great deal of room for improvement.
There are significant short-term impacts, and many people - such as base
workers and nearby business owners - are negatively impacted. But
communities as a whole are generally not devastated by the shutdown of
military bases.

GAO found, "According to the latest annual data, of the 62 communities
surrounding major base closures, 43 (or 69 percent) had unemployment
rates equal to or lower than the U.S. rate for 2000.... Furthermore, 33
(or 53 percent) of the affected communities had equal or higher average
annual per capita income growth rates than the U.S. average rate for
1996-99. Another 7 communities (11 percent) had average annual per
capita income growth rates that were in close proximity to the U.S.
average rate." 

Holman did pass along findings from an MIT study, pointing out that
counties impacted by Naval Shipyard closings did not fare well. It might
be fair to blame the closings for economic conditions in Charleston
(SC), Vallejo-Mare Island (CA), and possibly Philadelphia (PA), but in
my view the Long Beach shipyard was too small a piece of the Los Angeles
County economy to take all the blame. Cutbacks in aerospace contracting
hurt the Los Angeles economy much more than base closures.

Holman listed several factors contributing to economic recovery,
including the strong national economy, government assistance, and the
reuse of base property. He stopped short of crediting the base closures
for the prosperity in many closure communities, and I think it would be
difficult to show a causal relationship. The community with the highest
growth rate, San Jose, California, was in the early stages of the
Internet boom during that period. Its seven percent income growth rate
should not be attributed to the closure of the Moffett Naval Air
Station. But it is perhaps the extreme example of the fact that many
communities can prosper without their historical annual influx of
military installation funding.

Holman reported that 44 percent, or 229,800 acres, of the 518,300 acres
of military property declared excess through the BRAC process, will be
retained by federal agencies. Another 55 percent (285,900) acres will be
transferred to non-federal users, such as states, localities, and
private parties. The remainder is still up for grabs. Forty-six percent
of the federal transfers have been accomplished; 37 percent of the
non-federal property has been transferred.

Cleanup has been costly. Some $7 billion has been spent cleaning up BRAC
bases thus far, and the Defense Department estimated that another $3.4
billion will be required to complete the job. This latter figure rose $1
billion over the Department's 1999 estimate, due "primarily to the
inclusion of cleanup costs for unexploded ordnance, delays in the
program, the refinement of cleanup requirements and DOD's cost
estimates, and the use of more stringent cleanup standards due to
changes in how installations will be used."

The Air Force, with a projected cost to complete of $417 million at
McClellan Air Force Base (Sacramento, CA), accounts for 52% ($1,764
million) of the total. The Navy projected $808 million, but it expects
to boost its estimate by $142 million to meet more stringent cleanup
standards - such as the requirement, by the state of Texas, to clean the
Dallas Naval Air Station to residential standards. The Army's $796
million figure is expected to jump as well to cover the clearance of
unexploded ordnance at Camp Bonneville (Vancouver, WA) and Fort Ord
(Monterey County, CA).

Ninety-nine of 204 BRAC installations had cleanup "underway or
completed" by September 30, 2000. The Defense Department predicts that
another 80 will be "underway or completed" by September 30, 2003. 

Thus far (by September 30, 2000) the early transfer authority, which
permits property transfer before completion of cleanup, has not been
used much. Ten properties at eight installations had been transferred
under this legislation, including at least two facilities - Fleet
Industrial Supply Center Oakland (CA) and Agana Naval Air Station (GU) -
where local or territorial governments are conducting the cleanup.

Does base closure increase cleanup costs? Perhaps, but it's hard to
tell. GAO told the committee, "As noted in our July 2001 report
[Military Base Closures: DOD's Updated Net Savings Estimate Remains
Substantial (GAO-01-971, July 31, 2001)], DOD has reported that the vast
majority of its BRAC environmental cleanup costs would have been
incurred whether or not an installation is impacted by BRAC. DOD
acknowledges, however, that environmental costs under the BRAC process
may have accelerated in the shorter term. Others suggest that in some
instances BRAC-related environmental cleanups may be done more
stringently than would have been the case had the installation remained
open. However, the marginal difference is not easily quantified and
depends largely on the final use of the closed installation."

Lenny
-- 


Lenny Siegel
Director, Center for Public Environmental Oversight
c/o PSC, 222B View St., Mountain View, CA 94041
Voice: 650/961-8918 or 650/969-1545
Fax: 650/968-1126
lsiegel@cpeo.org
http://www.cpeo.org

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