Luke accounts for nearly 25% of state's military economy
Alan Maguire summarizes his findings on the economic impact of Arizona's military industry. The economist presented his report to a large audience at Luke Air Force Base last Wednesday. (Photo by Phil Riske)

Were Luke Air Force Base on the New York Stock Exchange, its portfolio would please investors.

The base contributed nearly $1.4 billion to Maricopa County's economy from October 1999 to October 2000, and its annual impact remains stable, said Alan Maguire, an economist hired by Glendale, Peoria and other cities and towns to study the value of Arizona's military industry.

Glendale paid $50,000 of the $90,000 study.

Luke's economic impact—measured by jobs and taxes that are directly or indirectly created by base operations—accounts for 24.5 percent of the overall $5.7 billion annual economy of nine military installations included in the study.

Maguire said his study was conservative in assessing the impact of military retirees by including only retirees living within a 50-mile radius of the military bases.

A previous study by Arizona State University West showed a $2 billion annual impact when all Luke retirees living in the state full-time or part-time were included.

Were the same criteria used in both studies, Luke's economic impact, including inflation, has nearly tripled in 10 years.

Maguire said the military economy in Arizona is "incredibly stable," despite ups and downs in the private sector.

Only Fort Huachuca had a greater impact than Luke did on its local economy.

The southern Arizona Army base produced 24,415 jobs, with an annual impact of $1.47 billion. Luke produced 18,556 jobs, with an annual impact of $1.37 billion, including $61 million in taxes.

The study was prompted by the Department of Defense's announcement it plans a round of base closures and realignments in 2005. The government considers economic impact of military installations on their communities when considering base closures.

Col. Dennis Rea, Luke's vice commander, said activities that support the base, such as the Maguire report and efforts to stem encroachment around the base, are not viewed by the Air Force as done to "save the base" from closure, but rather to "preserve our mission."

The military operations in the study directly employ more than 41,600 people, which exceeds the number of jobs at the top three corporations in the state—Honeywell, Wal-Mart and Banner Health Systems.

Luke's direct employment of 9,233 people is just slightly less than for all Fry's grocery stores, which employ 9,580.

"Specifically, our call to action at this time is that our military be given a seat at the table for future committees or discussions held on the issues that potentially impact military operations," Glendale Mayor Elaine Scruggs said.

Glendale annexed Luke in 1995.

"It is our desire that Congress, state officials, the state Legislature and our local community leaders will use this report when making decisions that affect our military installations, including the allocation of resources," Scruggs said.



Scruggs heads up Fighter Country Coalition, a group of West Valley mayors and other government representatives who have taken on encroachment issues around Luke.

Peoria Mayor John Keegan told the group last Thursday he is trying to get funds appropriated in the defense budget to purchase or lease land near the base to prevent encroachment by developers. Such would cost millions.

"We may be able to get some land acquisition money for the southern (flight path) corridor," Keegan said. "In Washington, a million dollars is like the penny jar at Circle K."

Nellis Air Force Base in Nevada obtained funds two years ago to buy land around the base to stem encroachment, Rea said, but "The government typically does not like to get into land acquisition.

"Purchase is one option, but it must be approved by the Air Force and the Pentagon," Rea said.

Meanwhile, the state is conducting a study of land use around Luke, the results of which are scheduled to be announced in September.

"The Department of Defense wants Arizona to be the poster child" for compatible land use around a military base, said Debra Sydenham of the Arizona Department of Commerce. "It's critical for the state to show we are looking to preserve all the military bases."

Surprise Mayor Joan Shafer said she wants development in her fast-growing town to be compatible with Luke's operations, but faces frustration in doing so.

"Surprise has had a hard time figuring out where Luke flies," Shafer said. "We have homes built in the area.

"I need to know what's compatible," Shafer told Rea. "I'm trying to vent the frustrations of a mayor."

Rea said, "I understand those frustrations, and we're trying to show where our flight paths go."

The Surprise City Council is considering a resolution that would create a one-house-per-acre buffer zone around the outside of Luke's noise contour zone, but Shafer has proposed that every planned development be compatible with Luke's needs.