Air Force Academy budget cuts affecting Colorado Springs economy

By Tom Roeder Updated: July 17, 2013 at 7:21 am • Published: July 17, 2013 | 7:00 am 0

Downsizing of the Air Force Academy's cadet wing and a reduction in airmen assigned there have slashed the academy's economic footprint in the Pikes Peak region by $100 million, a report released Tuesday shows.

The academy cut its rolls by 300 airmen and 300 cadets from 2011 to 2012, part of a planned post-war drawdown that accompanies $50 billion in annual cuts at the Pentagon. Those reductions along with others in contract services and construction cut the academy's estimated economic impact to about $900 million from nearly $1 billion.

"I wasn't so surprised by it," said Andy Merritt, who oversees military affairs for the Colorado Springs Regional Business Alliance.

The 2012 austerity measures cut payroll at the academy by nearly $80 million and slashed $39 million from construction spending and $4 million from supply purchases, reports show. The economic impact figures are calculated from such spending figures along with other indicators, including estimated off-base job creation.

Other Air Force bases around the Pikes Peak region also cut service contracts and construction spending, Merritt said. Fort Carson, where economic impact held steady at about $2 billion in 2012, went against the downsizing trend because of increasing payroll and construction as it adds a 2,800-soldier helicopter brigade.

The cuts in regional military spending have deepened in 2013. The Air Force Academy issued 11 days of furloughs to its nearly 1,400 civilian workers and has cut other areas, including flying hours to compensate for sequestration cuts. Other bases made similar moves.

While the impact of 2013 cuts at area bases hasn't been estimated, more downsizing is on the way. The Pentagon announced last month that it would cut the roster at Fort Carson by 1,500 soldiers over the next four years. Peterson and Schriever Air Force bases are cutting payroll and shedding contracts.

In 2012, though, Peterson Air Force Base added about 100 airmen and 100 civilian workers. But spending on construction and contract services plunged, according to a report released this year. Construction at the base dropped to $48 million from $62 million and services spending dropped by $80 million to $493 million. Peterson increased its equipment and supply spending in 2012 by about $40 million.

The base's economic impact dropped by $62 million in 2012 to $1.47 billion.

Numbers for Schriever Air Force Base weren't available Tuesday.

The only increase at the academy in 2012 was a rise of 100 civilian workers - countering the loss of 600 military positions.

Annual nonpayroll spending at the academy dropped to $315 million in 2012 from $422 million in 2011, with the biggest cuts coming in contracted services, which fell to $99 million from $165 million.

Academy leaders said the school has worked to maintain cadet training despite the cuts.

The academy calculated its 2012 annual economic impact by adding payroll and spending to an estimate of the number of off-campus jobs created and the value of the school as a sports venue and tourist attraction. Oddly, the academy boosted its estimated job creation number, saying that despite a declining budget it created $189 million in employment off the base, compared with $160 million in 2011.

The academy also determined that events on the campus, from football games to graduation weekend, carry an economic impact of $48 million. That $48 million wasn't added into the academy's economic impact figure in 2011, which could mean the drop is sharper than the Air Force admits.

Declining or flat economic impact numbers for bases in the Pikes Peak region are in the forecast for years to come. From 2012 to 2022, the Pentagon faces cuts totalling $1 trillion.

There is some good news from 2012's economic impact numbers at the academy and Peterson: Even with sharply reduced spending in 2012, the bases have a higher economic footprint than they did in 2010.

The academy's economic impact in 2010 was $850 million - nearly $50 million below the 2012 number. At Peterson, the 2010 economic impact was $1.36 billion - about $100 million below 2012.

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