Anchorage Officials Temper Forecast of Army Cuts’ Impact

Following last week’s announcement that Joint Base Elmendorf-Richardson would lose 2,631 soldiers — 59 percent of the Army’s population — over the next two years, local economists feared the realignment would deliver a serious blow to the region’s economy.

“It’s going to take a big chunk out of the Anchorage economy,” Scott Goldsmith, professor emeritus of economics at the University of Alaska Anchorage Institute of Social and Economic Research, told the Alaska Dispatch News.

The area could lose 6,000 jobs — including direct and indirect — and likely send the economy into a recession, Goldsmith predicted.

But in the days following the Army’s announcement as to how it would shrink the service’s active-duty end strength from 490,000 to 450,000 soldiers, local officials have come to believe the restructuring will have only a moderate impact on the area’s economy.

The effects mostly would be limited to neighborhoods close to the installation, or ones that have a high concentration of Army residents, according to Jonathan King, president of Anchorage consulting firm Northern Economics.

“If you own a barbershop on Muldoon Road in northeast Anchorage you’ll feel an effect. If you live in south Anchorage you won’t feel it at all,” King told the Alaska Journal of Commerce. King estimated the region would suffer the loss of 4,500 jobs.

At this point, it’s not clear the personnel reductions will dramatically affect local school systems, he said. King estimated that military payroll spending in the region might be trimmed by 10 percent to 15 percent.

Bill Popp, president and CEO of Anchorage Economic Development Corp., noted that total military payroll spending at Joint Base Elmendorf-Richardson makes up only a tiny portion of the entire economy.

“Anchorage’s total payroll, including the military, was $8.58 billion in 2014. This will be a very small fraction of that,” Popp told the Journal of Commerce.

“Do we like this decision? No. It is the end of the world? No,” Popp said.

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