Local businesses, bases hope to withstand military budget cuts

Growing fruits and vegetables on 200 acres of Lenoir County land is sometimes a hard way to make a living. Curtis Smith knows it’s the military in North Carolina that gives his family farm a fighting chance.

Smith sells his strawberries, cantaloupes, watermelons, sweet potatoes and collard greens through local grocery stores, farmers markets and roadside stands. But for some of those crops, up to half the annual sales of T.C. Smith Produce Farm Inc. are to a company that provides produce for commissaries at military installations, including Fort Bragg and Camp Lejeune.

If the military reduces troop strength to pre-World War II levels and cuts spending as Defense Secretary Chuck Hagel proposed last week, Smith might have to cut back on the acreage he plants and restructure the loans he took out to install new packing and irrigation equipment.

“It could be devastating to us,” said Smith, a fourth-generation farmer who last week was trying to keep his young strawberry plants from freezing. “You always keep in the back of your mind that something can happen, but it’d be tough.”

And not just on his farm.

Besides the 110,000 active-duty service members assigned to a half-dozen bases in North Carolina, there are an additional 340,000 private-sector jobs in the state that are supported by the military, along with 30,000 federal government civilian jobs and 60,000 state and local government jobs. In all, according to the N.C. Department of Commerce, the military supports 540,000 jobs in the state that account for more than $30 billion in personal income, making it North Carolina’s second-largest industry, behind agriculture.

“Almost every county in the state benefits from the military,” said Scott Dorney, executive director of the N.C. Military Business Center in Fayetteville, a business-development arm of the state’s community college system. More than 80 of the state’s 100 counties have companies that contract with the military, providing a range of goods and services.

Mostly small- to medium-sized, they help feed and clothe troops, build and run base housing, landscape grounds, maintain vehicles, conduct training and manufacture specialized electronics, textiles and other gear used on bases here and around the world.

Service members and those who support them have seen the military cut spending and reduce recruitment since the end of the war in Iraq, and have known that more cuts and a larger troop drawdown were coming as involvement in Afghanistan comes to a close. It’s part of the cycle of the military, tied to world events and magnified by budget sequestration, automatic cuts imposed by Congress when it couldn’t come up with a detailed budget-reduction plan of its own.

A major impact

Hagel’s 2015 budget proposal is the first in 13 years in which none of the country’s 1.4 million active-duty troops is expected to be engaged in a war.

It reflects plans to reduce military spending by the nation’s largest employer by $75 billion over the next two years, and cuts every branch of service, including the National Guard and Reserves.

The Army, the largest branch, would see the biggest reduction. It now has 522,000 members, and Hagel has proposed trimming to between 440,000 and 450,000. The Army could shrink to 420,000, Hagel said, if sequestration remains in effect.

It’s not clear how many of Bragg’s 57,000 conventional troops would be cut.

Reductions might be achieved through attrition, as soldiers leave service and are not replaced by new recruits. The military also could stop re-enlistments.

In addition to reducing personnel, the military may try to save money by limiting wage increases; requiring dependents and retirees to make higher co-pays on their medical care; reduce subsidies for commissaries, which help military families and retirees by selling groceries at reduced cost; cancel or not renew contracts for purchases; and, now that they’re not training for repeated deployments, use military personnel for jobs that contractors had been paid to do.

Some military leaders have suggested a round of base realignments and closings as a way to achieve long-term savings. That’s a yearslong process that involves the convening of a commission that studies options and makes recommendations to Congress.

If that happened, most observers believe Fort Bragg and Camp Lejeune would be spared. Part of the reason is that the bases are considered two of the military’s crown jewels, home to some of its go-to units such as the 82nd Airborne Division at Fort Bragg, and the II Marine Expeditionary Force and 2nd Marine Division at Lejeune.

They are also the home bases of more than half of the nation’s special forces troops, whose numbers stand to grow by about 3 percent in Hagel’s budget proposal as the military relies less on broad-scale warfare and more on focused engagement.

In fact, some believe both bases could gain troops if others are closed, as both did in the 2005 base realignment and closure process, in part because military communities in North Carolina have worked so hard to be accommodating.

“We’re kind of the poster child for military-community cooperation,” said Sheila Pierce, executive director of Jacksonville Onslow Economic Development. Around Camp Lejeune, Fort Bragg, Seymour Johnson Air Force Base in Goldsboro and smaller outposts, local and state leaders have tried to let the military be the military: sometimes loud, up at odd hours, and occasionally intrusive as aircraft on training missions zoom right overhead.

“If they leave, jobs leave, money leaves,” Pierce said. “So we’re very protective of our installations.”

Local agreements prevent certain kinds of development from coming too close to installations’ borders, so troops can use as much of the land as possible for training. Where aircraft need to fly, there are building-height restrictions and cell towers are disallowed.

In places, the military pays neighboring farmers to keep their fields in agriculture or forestry use instead of selling it for housing subdivisions where buyers might later complain about the use of a nearby bombing range.

Hoping to hang on

Base officials at Lejeune communicate well with local leaders, Pierce said, and have told them for the past year or more that a drawdown was coming. The base has about 40,000 Marines and could lose several thousand conventional troops under the Pentagon’s proposal, though it could also add to its special forces.

Right now, she said, the community is still growing, adding restaurants and hotels to serve the thousands of additional people who moved in with the last base realignments. But eventually, she said, that will end, and Jacksonville and surrounding counties will see some contraction.

“You might see some of the small businesses close, the ones that are almost completely reliant on the military,” she said, such as barbershops, dry cleaners, tattoo parlors. “But I think our economy will temper it well, and maybe make up for it in other areas.”

Beyond the boundaries of the installations, state leaders will continue to make the case that North Carolina is the most military-friendly state in the country and wants to keep the third-largest military population – or increase it.

Gov. Pat McCrory traveled to Washington in December to remind branch chiefs of the importance of the military to North Carolina’s economy and the value of the state’s bases to the military’s training. He appointed a retired Marine Corps major general, Cornell Wilson, as one of his advisers. Sen. Kay Hagan said Friday that protecting the installations is one of her top priorities.

Smith, the produce farmer, said he and other local growers hope to continue to provide for military families.

“It would hurt us” to lose that business, he said, and not just because of the lost income.

“We take great pride in what we do with the commissaries because we know we’re trying to feed soldiers and their families and military veterans,” he said. “They have sacrificed so much for their country.”