War on terror benefits some states more than others

The enormous boom in defense spending spurred by the war on terrorism has echoed unevenly in America as military contracts shrank in some states while doubling or even tripling in others.

The nation is undergoing one of the largest military buildups in history, according to White House figures, rising from $333 billion for defense and homeland security in 2001 to $492 billion last year. The Defense Department reports that it allocated $203 billion to hire military contractors in all 50 states and Washington, D.C., up from $135 billion in 2001, a 50 percent increase.

“We are spending as much on defense as the rest of the world combined,” said John Pike, a Virginia defense analyst and president of GlobalSecurity.org. “In the pre-Sept. 11 environment, defense numbers like these would have been eye popping. But today, since there’s no organized anti-militarism lobby and no effective peace movement, nobody’s amazed by spending like this.”

There have been clear winners and losers in the military buildup, at least in terms of where defense contracts are going. “Osama bin Laden has been very, very good for some of these states,” Pike said.

President Bush’s home state significantly increased its share of the nation’s defense pie. Private military contractors in Texas got $9 billion in 2001 and more than $21 billion last year, according to Defense Department records. Texas is ranked third nationally in federal defense spending, behind California and Virginia. But Texas’ share of all defense contracts rose from 7 percent to more than 10 percent, the largest increase for any state, while the slice of military spending in California and Virginia shrank significantly.

Much of Texas’ growth came late in 2001 when Lockheed Martin won a 40-year, $200 billion contract for production of the Joint Strike Fighter. Part of the fighter’s fuselage is assembled in Lockheed’s Fort Worth plant. More was spent on new airframes last year ($9.9 billion) than was spent statewide for defense procurement in 2001.

A spot check of Defense Department contracts reported in 2003 showed that all three of Texas’ top contracts went to Lockheed Martin in deals worth $4.7 billion. A distant fourth was an $867.8 million NASA engineering contract awarded to the United Space Alliance of Houston.

Also enjoying robust growth and a much larger share of defense spending are Maine, Kentucky, Connecticut, Maryland and Washington, D.C.

Maine’s growth was due primarily to the increasing production cost of high-technology destroyers at the Bath Iron Works where the last of the Arleigh Burke class guided missile destroyers are being built. The top four federal contracts signed in 2003, for example, were payments on destroyer construction totaling $597 million.

Kentucky, meanwhile, is providing healthcare services for the Defense Department since the health benefits giant Humana is based in Louisville. All 10 of the state’s top military contracts in 2003 were for health services worth more than $1.7 billion.

Only three states _ Georgia, Minnesota and Oklahoma _ suffered a dollar decline in defense contracts during the Bush administration. But 22 states suffered a decline in their share of defense spending.

For example, defense contracts awarded to Colorado firms rose from $2.3 billion to $3.2 billion even as the state’s share of America’s defense contracts shrank from 1.7 percent to nearly 1.5 percent.

“We don’t build tanks. We don’t manufacture battleships,” said Rocky Scott, president of the Greater Colorado Springs Economic Development Corp. “If you’re having wars, we don’t manufacture a lot of ‘consumables’ here,” meaning munitions and other hardware used in combat.

Colorado, once a symbol of America’s Cold War military commitment, is home of the North American Aerospace Defense Command in Colorado Springs and Martin Marietta’s Waterton Canyon assembly plant for intercontinental ballistic missiles. Since the collapse of the Soviet Union, the state’s ranking in defense contract dollars has fallen from 12th to 20th.

The states suffering the worst decline in the share of defense spending were California, Florida, Georgia, Massachusetts, Missouri and Virginia.

(SHNS reporters Tara Copp and M.E. Sprengelmeyer contributed to this report.)

(Reach Thomas Hargrove at hargrovet(at)shns.com)