Who’s On First

It might surprise many in this region to know that the Defense industry sector of military installations, has been an unqualified growth sector. Can you name one job site that has gained 13,000 jobs since 2004?

If you’re having trouble naming just one, here it is: Fort Lewis.

Just last week, a delegation from Washington composed of members from the Governor’s office, the Pierce County Executive’s office and Economic Development Dept. as well as the City of Lakewood and the Tacoma-Pierce County Chamber attended the Office of Economic Adjustment’s (OEA) Partnerships for Success conference.

Among many matters of import learned and exampled at the OEA Conference was the Executive Order 12788. In addition to setting up a Defense Economic Adjustment Program and an Economic Adjustment Committee composed of the Secretary of Defense and inclusive of virtually all the cabinet positions as well as major executive branch offices and administrations, the act mandates a prioritization among communities:

Sec. 5. (b) (2) Afford priority consideration to requests from Defense-affected communities for Federal technical assistance, financial resources, excess or surplus property, or other requirements that are part of a comprehensive plan…

The City of Lakewood is now lead for a regional effort to develop a plan to address the impacts associated with the growth at Fort Lewis.

The 2% Solution

Amidst all the hoopla and competition for ARRA dollars, an amount just a little less than 1% has been overlooked.  That percentage of the $787 billion stimulus package is about $7.4 billion in Defense-related appropriations.

Of that, Washington State is slated to receive about $150 billion. The Defense-cash will flow to about half the state’s  counties, from Island County’s over $20 million who gets almost nothing from any other ARRA source to Pierce County at almost $75 million, almost half the state’s Defense-cash.   Go here if you wish to see what’s planned for your county. 

True, that’s only about 2% of the total Defense-appropriated ARRA funds, but it’s a total of over 14% of the state’s total ARRA funds.

A Rose by Any Other Color

 

As the counties outside King are finding out again, King imports jobs and exports unemployment. This is not entirely King’s fault.  Employment statistics count employment as the county where the job is, and unemployment as the county where the unemployed reside.

What the three counties sharing King’s economy are finding out, is that their economic foundation is colored navy blue, camo green and sky blue. The foundation in Pierce has relied on camo green (Ft. Lewis) since the ‘teens and sky blue (McChord AFB) since the ‘thirties.  Yet, now, that foundation has proved to be a growth platform. 

Port Merger, Not a Marriage Made in Heaven

It was with regret that I read of the demise of Washington CEO magazine. I regret the loss of media diversity (and continue to value the Seattle Business Monthly), but I also was still composing my response to their November issue: Terminal Case (prescient, considering). I tried to give you links to the column and articles, but that website has understandably been closed, although Seattle Business Monthly promised to archive its articles.

Ports merger is an issue that reappears every time the Port of Seattle has economic difficulties. In response advocates commonly comment how much better it would be if Seattle controlled every port. Trotted out are cries of undercutting costs and the inefficiencies of taxpayer based competition. The Port of Tacoma is not accused of pricing below its own costs, only of offering prices below the Port of Seattle’s costs. And, who could believe the Port of Seattle would have responded to regional cost competition when it’s been slow to respond to inter-county competition. The loser to the Port of Tacoma in Port competitions has not been the Port of Seattle but the Port of Portland.

Advocates of a merger always prefer a shotgun marriage, as in last year’s Puget Sound ports bill. So, what’s wrong with these proposals?

Take One Hammer and Call Me in the Morning

Remember the old joke about the roofer who hit his thumb and was bemoaning loudly that he’d give anything for it to quit hurting. Then, his partner hits the first’s toe, who then immediately concentrates on that hurt, forgetting the thumb?

That might be our situation about energy and the financial bailout.

I had just listened to a presentation by Karen A. Harbert, evp, Institute for the 21st Century Energy (the U.S. Chamber seems to set up a new institute wth every new crisis). She had observed that the American people were unlikely to be well served by legislation with 10 days debate. That was followed almost immediately by a teleconference (all at the annual Alaska State Chamber Conference/Trade Show) with Cong. Don Young, who referred to the Energy Bill as “Peter Pan legislation, composed of magic.”

The bailout has turned our attention away from the Comprehensive American Energy Security and Consumer Protection Act. With just a nod we accepted the obfuscating headlines that Congress lifted off-shore drilling bans. As it happens, the legislation allows drilling 50-100 miles off both coasts, but allows states the final decision, without a revenue sharing provision.

Besides excluding the likely-richer areas within 50 miles of shore, that revenue sharing lack makes it unlikely states will permit drilling. We would have been better off if Congress had done nothing and the existing ban on off-shore drilling had expired.

Besides the claims to accomplishing more drilling opportunities for more energy for America, Congress has still done nothing about drilling on-shore, in places like ANWR and other likely petroleum fields.

The “May I?” legislation did provide some small steps forward even as it directed giant steps backward, according to Thomas Donohue, Pres./CEO of the U.S. Chamber. But then, if your toe really hurts, who cares about your thumb. I know just the cure for what causes your pain.

Alaska in the 3rd D

As the last speaker on the last panel of the last day of the Alaska State Chamber’s Conference, the diehards among us were listening to Bill Popp, Pres./CEO of the Anchorage Economic Development Corporation; explain his new online tool for professionals looking at their marketplace.

Popp, in trying to help those Alaskans among his audience understand the density of their marketplace to provide workforce or a consumer base, said, “(y)ou could take the entire population of Alaska and place it in Tacoma-Pierce County, and have some beds left over. Or, you could take Alaska’s population and fit it in 10 blocks in Beijing.”

That got me to thinking of the dynamics of Alaska. Most recognize the “D” of distance. We in Washington cope with it as international traders and as suppliers for Alaska. Many Washingtonians and Alaskans are making their fortunes in distance. Another “D” is diversity. Alaska has diversity with its attendant community benefits and social challenges. Alaska’s diversity profile doesn’t look like the U.S.’s, but the U.S.’s doesn’t look like any other countries’ either.

But an even greater “D” is depth. Alaska is one of those places where the bell curve of normal distribution is inverted. It has more than the normal ratio of people there who are the very best at what they do. And, at the other flange of the bell you find that grouping of very individualistic people, most appreciatively exemplified by Dick Proenneke.

This is not an unusual phenomenon. The Last Frontier is much like all the frontiers of America have been throughout its history. And, especially in much of the West, but also in smaller states that have remained on the American frontier, you find the same situation. Few states have the fortune to have so much of its leadership play on the national stage, as Alaska’s Gov. Palin is now. One exception that proves the rule may be Washington‘s Sen. Magnuson and Sen. Jackson, where circumstance and talent coalesce. (The only like comparison that comes to mind is Massachusetts’ Sen. Ted Kennedy and Sen. Kerry. Help me out with other examples.)

A politico recently told me the best elective job in the nation was as Senator of Vermont. That’s a state that has retained its frontier mentality over the centuries. Just recall Sen. Jeffords for an example. The rationale was that it’s a small state, in the same time zone and close to D.C. but far enough away that it takes a constituent’s sacrifice to come there and has a smaller workload that is shared with another.

At a long ago camping trip, when someone left a bit of Dutch Oven Peach Cobbler available for breakfast, a fellow camper helped me understand that state. He said, everyone in the world thinks of a Yankee as someone from the USA. But here, we think Yankees are people from north of the Mason-Dixon Line. In that quarter of the country, a Yankee is someone from New England. And, in New England, a Yankee is someone from Vermont. But in Vermont, a Yankee is only someone who eats pie for breakfast.

For Dutch Oven Peach Cobbler, this PNWer is willing to be called a Yankee.

In Defense of a Budget

Our region gets good support and communications from our Congressional delegation and their local staffs, but it’s still interesting to get the perspective from someone else’s congressman.

I had that opportunity at last week’s Summer Conference of the ADC when George Schlossberg, Partner/Attorney with Kutak Rock LLP (WA, DC) and Rochelle Dornatt, Chief of Staff, Rep. Sam Farr (CA, 17th District) gave their appraisals of the status of the Defense Authorization and Appropriations bills for the budget. What follows is my hopefully accurate synopsis.

Firstly, it is observed that BRAC is no longer an issue in Congress. They (as a group) are no longer paying attention to the details. It is up to affected losing and growth communities to engender Congressional attention to their issues.

Also, the $500 billion Defense appropriations and the $200 billion supplemental budget are not enough. There is an estimated $400 billion deficit. And, it is beginning to be acknowledged there is not enough money to provide bases, housing, training facilities to bring the troops home from Europe, Asia or other deployments.

Please note the Defense budget is actually divided into two bills:

REPI Similar to RIP

Acronyms have a habit of soothing us or causing us stress, depending on whether we’re in the know or not.  Sometimes both.

Most of us would say RIP, a very grave term, does both.  But “resting in peace” is also a somewhat tongue-in-cheek goal of the REPI, aka the Readiness & Environmental Protection Initiative.  In this case, resting in peace means having the mitigation in place for adjacent property owners to benefit from the quiet enjoyment of their properties.

Referenced in 10 US 2684a, REPI, is an effort by the services to prevent themselves from becoming islands of eco-diversity and to prevent urban encroachment from hampering their military missions.  The Army has been the most successful user of the REPI program which focus the leverage of funds for either fee simple or economic development rights for targeted properties.  Ft. Lewis has been a stellar participant second only to Ft. Bragg.  The Nature Conservancy has been a repeat partner with the Army, according their Bob Barnes, Senior Policy Advisor.  

There were more requests for REPI funding than any other fund in DoD in the last year.  The services are asking for $211 million for FY 2007.  The Air Force is playing catch-up, claiming just $5 million from that total.  However, the Air Force’s intention is to leave the decision making up to local bases, but McChord AFB has been picked as a winner this year to match Washington State, Pierce County and City of Tacoma funds.

Panetta’s Panacea

Leon Panetta, now Director of the Panetta Institute in Seaside, CA spoke yesterday to the ADC’s luncheon of an estimated 600 federal civilian and uniformed defense leaders, defense industry leadership and state and local officials and representatives.

Panetta, former Congressman for the Monterey district, and Chief of Staff to President Bill Clinton, offered advice to states, regions and communities with defense installations.  Panetta’s words were not without weight as he was involved in the losing effort to prevent the major closure of Fort Ord and successful in the retention of its defense language school and other high quality programs, as well as fending off raids during subsequent BRAC rounds as others wanted these assets.

His advice:

1. Undertake coordinated planning and actions with all key players including your leaders, your chambers of commerce and your military
2. Form innovative partnerships
3. Better coordination and planning at a higher level (or it doesn’t happen)
4. Work together, or as Hancock and Franklin exchanged:  Hang together or you’ll surely hang separately.  Besides, that’s what gives you political impact, he said.

Army Dollars are Green

Our community is late getting into competition with other growth communities that are gaining soldiers, civilian workforce and dependents.  But, thanks to the City of Lakewood, we are getting there.  Lakewood is signed on the provide the Office of Economic Adjustment with application for impact dollars.

The challenge is that there are no federal dollars to help with growth according to Patrick O’Brien, Director, Office of Economic Adjustment, speaking at a forum today at the ADC Summer Conference.  O’Brien says that communities are reduced to Congressional advocacy for line items or earmarks.

It is true the DoD has Defense Access Roads (DAR) program for roads directly associated with defense installations.  However, O’Brien says a recent compilation of 62 identified projects revealed a gap of $1.5+ billion – not including Guam, a very special case.  If you combine water & sewer projects and education needs for students of warfighters, you get $145 million and $92 million additional gaps.  The real kicker is that DAR dollars are competitive with milcon dollars.

O’Brien says the OEA is developing an identified list of projects for the next administration that will determine where this growth impacts issue will go and what the priorities will be.  He encourages communities to get their act together and be ready to tell their Congressional delegation their needs.

Military Installations and Communities

This week I’m attending the Association of Defense Communities Summer Conference.  The ADC focuses on growth installations (Ft. Lewis) and closing installations (Ft. Lawton) and the community interaction.

Already this morning, I’ve heard from Geoffrey Prosch, Principal Deputy Assistant Secretary of the Army (Installations & Environment).  In later days, three other acquaintances from the Tacoma-Pierce County Chamber’s annual Washington-to-Washington, D.C. trip are  James Holland, Deputy for Installation Policy, Air Force (Installations), Joseph Calara, Deputy Assistant Secretary of the Army, Installations & Housing, and Kathleen Ferguson, Deputy Assistant Secretary of the Air Force, Installations.

During Prosch’s session, he was asked how he anticipated the forthcoming change in administration’s would impact BRAC implementation and other Defense initiatives to modernize and restructure the Army.  His reply was that four of the three principal assistant secretaries were careers rather than appointees.  And, he would willingly serve as long as anyone let him.

Now, back to sessions for the “Legislative Update” focusing on the National Defense Authorization Act for 2009!