Communities also are military dependents

By Catherine E. Toth
Advertiser Staff Writer

Business at Michael's Barber Shop in Wahiawa sank by nearly 50 percent when about 10,000 soldiers from nearby Schofield Barracks were deployed this year.

Tammy Nguyen trims Army Sgt. George Rodrigues' hair at Michael's Barber Shop. The Wahiawa shop has had a drop in business since about 10,000 Schofield soldiers were deployed this year. Deborah Booker • The Honolulu Advertiser

The 10-year-old barbershop on Wilikina Drive survived. And so have the more than 100 businesses in the community, which rely heavily on the military.

Military-dependent communities on O'ahu, such as Wahiawa and Kane'ohe, have survived the largest deployment of soldiers since the Vietnam War. But could they — and the state as a whole — survive economically without the military altogether?

"I think the state could survive and even do better (without the military) because it's a crutch," said Ivan Eland, director of the Oakland, Calif.-based Center on Peace & Liberty, The Independent Institute, a nonprofit that supports smaller government. "The need for military bases for economic development has been vastly overstated."

But others doubt it.

"Having no military in Hawai'i is not a viable option," said James Mak, professor of economics at the University of Hawai'i-Manoa. "In the end, it's not whether we should have the military here or not, but how much military benefits us the most."

The military accounts for about 9.3 percent of spending in the state. Active military and their dependents, veterans, civilian employees and members of the National Guard make up about 16 percent of the state's population, according to the state Department of Business, Economic Development and Tourism.

Mak argued that the military is a more stable contributor to the state's economy than tourism, which sometimes is at the mercy of global events.

But Eland said military spending isn't productive spending — no consumer goods are produced, for example — and dependence on it stifles creativity within the private sector.

"In fact, the private sector has to carry the load of people doing security work by producing consumer goods for them, too," Eland said. "The population (in Hawai'i) has become dependent on the military for demanding its goods and services. This dulls competition and long-term economic potential. If the military demand for civilian products went away, the short-term economic effects would be negative, but the long-term effects would be positive."

Since 1988, 97 bases have shut down and another 55 were realigned. In California, 29 major bases and dozens of smaller ones closed, taking away more than 98,000 uniformed and civilian defense jobs and an estimated $9.6 billion in annual spending.

Next year, the federal government will decide whether to close or realign more bases. The Pentagon says another 25 percent of the 400 stateside military facilities is causing an excess of capacity and should be closed. The Bush administration estimates the cuts would save taxpayers more than $3 billion annually.

Some towns have actually improved from base closures.

England Air Force Base had anchored the community of Alexander, La., since it opened in 1955. Before closing in 1992, it employed 3,000 uniformed personnel and about 700 civilians. The base was transformed into the England Airpark, a mixed-use development with 1.5 million square feet of commercial space and more than 300 housing units spread over 2,200 acres. It now supports more than triple the number of workers employed by the base.

In Hawai'i, land is immensely valuable, with bases such as Pearl Harbor and the Marine Corps Base Hawai'i in Kane'ohe sitting on prime real estate that could be converted into housing or resorts, Eland said.

"Everyone thought (base closures) would be disasters," he said. "But in many cases, you'll find (a base closure) starts creative entrepreneurial activities and people making better use of facilities."

That hasn't been the case so far with Barbers Point Naval Air Station, which closed in 1999. Plans for a shoreline park, sports center, new raceway park and significant light industry and commercial development at Kalaeloa haven't materialized. Part of that is because of large-scale — and costly — environmental remediation at Kalaeloa.

While other states face more base closures, there are plans for an Army Stryker Brigade, new Air Force C-17 jets and a possible aircraft carrier battle group in Hawai'i.

These additions could bring more than 10,000 people to the state.

"There are many more costs to Hawai'i's enormous military presence than we are led to believe," said Kyle Kajihara, program director of the American Friends Service Committee in Hawai'i, a peace and justice group. "There are hidden costs such as the impact on the environment, that will last for generations ... There are many ways the military may be lucrative for many folks in the community, but others tend to pay a higher price because of its presence and the unequal distribution of impacts and benefits."

Hawai'i is ranked second only to Virginia in military spending per person in fiscal 2002 at $3,184.

Wahiawa is so dependent on the military, business owners wouldn't imagine life without it.

"We'd definitely have to reinvent ourselves, I can tell you that," said Dan Nakasone of the Wahiawa Community and Business Association. "We would have to attract that visitor market that drives past Wahiawa every day, but we're not set up for that ... People don't realize how important the military is to Hawai'i. It's one of the pillars of our economy. Without that, if we lose that segment, everything else would definitely feel the effect."

About 60 percent of business at Tom's Golf Shop in Wahiawa comes from the military at nearby Schofield Barracks, said owner Thomas J. Hrdlicka.

Hrdlicka says he would find a way to keep his business going if the military were no longer around. "I don't visualize we'd close. I'm a survivor."

Reach Catherine E. Toth at 535-8103 or ctoth@honoluluadvertiser.com.