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Military drives local economy

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Posted: Sunday, August 22, 2010 12:00 pm | Updated: 9:12 am, Thu Aug 16, 2012.

By Andrew D. Brosig

Killeen Daily Herald

A Department of Commerce report released earlier this month found the Killeen area experienced significant growth in per capita income in recent years, compared to other parts of the state and the country.

Between 2008 and 2009, the Killeen metro area - the corridor stretching from Temple and Belton in the east to Lampasas in the west - saw a 4.6 percent rise in per capita income, from $37,070 to $38,757. That increase ranked the area 87th in the nation among 366 metropolitan areas studied and first in Texas for personal income growth.

Since the start of the decade, per capita income has increased by some 46 percent, adjusted for inflation, from $22,766. Per capita income is calculated, using Census Bureau numbers, by dividing the total personal income by the number of people living in an area, according to the report released Aug. 9 by the Commerce Department's Bureau of Economic Analysis.

At the core of that growth is Fort Hood. With an annual payroll of almost $2.6 billion, the facility provides stable jobs for a variety of soldiers, civilians and government contract employees. And the fruits of that labor are spent right at home.

"If nothing else, in a down economy, the military is steady work," said Bill Parry, executive director of the Heart of Texas Defense Alliance in Killeen. "Military installations have a tendency to buffer economic situations in a community.

"It has had a significant impact," Parry said. "The military has provided economic stability to this region in hard economic times."

Benefit from stability

It's the communities in the region that are benefiting from that stability. John Crutchfield, president of the Greater Killeen Chamber of Commerce, said the city of Killeen has seen steady growth for several years.

That growth belies the economic woes troubling other parts of the country. In the past five years, for example, the Killeen area has experienced the fifth largest economic increase in the state, Crutchfield said.

"Defense spending is one area that has not been significantly impacted by the recession," said Dr. Paul Stock, associate professor of economics at the University of Mary Hardin-Baylor in Belton. "There's still a lot of money being spent in that sector. That definitely impacts the Killeen and local area economies.

"The simple fact is the national economy is in a recession - a deep recession," he said. "Most sectors have been affected by that but the defense sector is somewhat protected."

The only other Texas metropolitan area that showed significant growth in per capita income was El Paso, the home of Fort Bliss, at 2 percent. Brownsville had a 0.3 percent increase, while the rest of the state - including the larger metro areas of Austin, Dallas-Fort Worth, Houston and San Antonio - all showed significant decreases in per capita income for the same period.

The growth locally didn't come as a real surprise to Copperas Cove Chamber of Commerce President Marty Smith. She'd been hearing predictions of a roll-back on the recession for some time.

"People were predicting that a year ago, they started predicting that growth," Smith said. "I know the military has a lot to do with it. Texas was the last one in the recession and I think we'll be the one that leads the states out."

Bill Kozlik, president of the Harker Heights Chamber of Commerce, agreed.

"I think this is a good, viable area for people to be in," he said. "People can come here and find jobs."

Big impact

Crutchfield cautioned against jumping to conclusions about the report. But one thing that can't be doubted is the impact Fort Hood - and other military installations around the country - have on the communities they call home.

Seven of the 10 metro areas that experienced the fastest growth in personal income in 2009 were military towns, according to the report. In fact, in most of the 57 metros where net earnings increased, those gains were concentrated in the government sector.

And it's not limited to the city of Killeen. Some 10 percent of the students in the Belton Independent School District, for example, are the children of military families, said Stephanie O'Banion, president of the Belton Area Chamber of Commerce.

"I would imagine we certainly see our economies in our communities pretty stable," O'Banion said. "I have to believe that money is being spent back into the communities."

School districts, too, experience the economic wind-fall. Lampasas Independent School District last year opened a new elementary school - Taylor Creek Elementary - to address the needs of military families.

"A lot of the eastern part of Lampasas County are military dependent families," said Jill Carroll, executive director of the Lampasas Chamber of Commerce. "I think we're definitely seeing growth."

As per capita income increases, so does the amount of disposable income individuals families have to spend, UMHB's Stock said. And consumer spending represents the largest sector of any economy, he said.

"Per capita income is going to affect personal consumer spending - consumer spending on houses, on food, entertainment, all those things," Stock said. "And all the consumer spending requires jobs to support it, to provide the goods and services consumers demand. It makes sense that would definitely help (the economy of) the local corridor."

Contact Andrew D. Brosig at abrosig@kdhnews.com or (245) 501-7469.

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