Hill Air Force Base Closure Would Cost Utah Billions

March 31, 2004 — The Closure of Hill Air Force Base would mean a disaster for Davis County’s economy. That’s the conclusion of a new study entitled \”The Economic, Demographic and Fiscal Impacts of Closing Hill Air Force Base: A Statewide and Regional Analysis,\” by the Bureau of Business and Economic Research (BEBR) at the University of Utah. The upcoming round of Defense Base Realignments and Closures (BRAC) is threatening the existence of Hill Air Force Base (Hill AFB). The Department of Defense is aggressively approaching this round of BRAC in its attempt to eliminate 20% to 25% of its current capacity.

As part of the efforts to defend against closing Hill AFB the Utah Defense Alliance commissioned the BERB to assess the economic, demographic and fiscal impacts of Hill’s closure on the state of Utah and the Davis/Weber region. Study author Jan Crispin-Little and co-author Pamela Perlich say the closure of Hill AFB would be felt immediately. “Hill AFB directly pumps almost $1.0 billion into the economy each year. Most of this money remains in the Davis/Weber region. The closure of Hill means this money is lost. The consequences will be immediate and significant, particularly for Davis County. The departure of Hill AFB is equivalent to the loss of an entire industry–one that provides high-paying, stable jobs. It could take Davis County more than a decade to make up the economic losses,” said Crispin-Little.

The impacts presented in the BEBR study are based on a phased shutdown of Hill AFB that begins in 2006 and is completed in 2008. If Hill AFB were to close, the short-term, statewide impact will be 47,000 fewer jobs, a decline of $2.35 billion in annual earnings and $2.29 billion in personal income. The economy will shrink by $3.58 billion and the state will incur a loss of $192.4 million annually in state tax revenue.

Another short-term impact from a Hill closure would be to shrink Utah’s population. The impact will be 31,000 fewer people living in the state than if Hill remained in operation. This includes 7,600 school age children, or about 1.3% of the projected school age population. Closing Hill AFB will also lower per capita income by $542 in 2009; this means each person in Utah will have $542 less to spend than if Hill remained in operation.

The long-term (2020), statewide impact of closing Hill AFB also paints a dark economic picture. Closure would mean a permanent loss of 41,700 jobs, an annual decline of $2.50 billion in earnings, and $2.65 billion in personal income. The economy will be $3.43 billion smaller (a decline of 1.7%) and incur a loss of $199 million annually in state tax revenue. In robust economic times, the long-term impacts equate to about one to three years of economic growth.

The biggest loser in any scenario that leaves Hill AFB permanently closed is the Davis/Weber region. The economic consequences of closing Hill AFB on this part of Utah will be unparalleled since the Great Depression. Each year, Hill AFB directly pumps almost $1.0 billion into the region. Nine out of ten people who work at the base live, and spend most of their disposable income in area. The departure of Hill will have enduring, large-scale impacts on the size, structure and composition of the region’s economic base leading initially to declining employment, population, earnings and income, and eventually culminating in a regional economy that is permanently smaller.

For the full study on the possible closure of Hill Air Force Base including data tables and graphs, please visit: http://www.business.utah.edu/bebr/

Media Contacts For This Story

BEBR Senior Research Economist
Office Phone: 801-581-3362