San Diego’s Military Economy Reaches $50 Billion Annual Milestone

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Sailors aboard the aircraft carrier USS Carl Vinson “man the rails” as the ship departs its homeport of San Diego. Navy photo by Daniel Jackson Norgart

The military remains San Diego’s largest single economic sector, supporting 338,000 jobs and and reaching the $50 billion milestone in the most recent fiscal year.

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The San Diego Military Advisory Council‘s ninth annual report on the region’s military economy, released Friday at a press conference at Naval Base Point Loma, painted a picture of steady growth despite the vagaries of funding from Washington.

“The numbers are truly impressive in terms of the scope, the size and the synergy,” said Dr. Lynn Reaser, chief economist at Point Loma Nazarene University. “The military far and wide remains San Diego’s most important economic driver.”

The military — including the Navy, Marines, Coast Guard, Homeland Security and Veterans Administration — is the region’s largest employer. One out of every six U.S. Navy sailors and one out of every four U.S. Marines receive their paychecks in San Diego.

Federal military spending in the region is expected to increase by 3.8 percent in the 2018 fiscal year, which began Oct. 1, compared to 3.2 percent in the previous year.

Rear Adm. Yancy Lindsey with Dennis Dubard

A key driver of the growth is a steady rise in the number of Navy ships based here, from 40 in 2015 to 64 in the current fiscal year.

Rear Adm. Yancy Lindsey, commander of Navy Region Southwest, said ships are being moved here because San Diego is the “stepping off point to the Pacific” — the world’s leading economic region — and the nearby cluster of air, sea and land training areas is unmatched.

He said 72 ships are expected by 2025, with more possible if the rate of ship building is increased. “First of all, we need a larger Navy,” he said.

Rep. Susan Davis, a member of the influential House Armed Services Committee, said that while she was pleased with the economic impact, she was most concerned about supporting the men and women who serve.

“What’s really import is the men and women who serve our country and call San Diego home,” she said. “We have food insecurity among our military families; the cost of housing is a tremendous challenge.”

She promised to address both of these issues in Congress.

Though defense funding has been covered by a continuing resolution instead of a formal Congressional spending bill for the past three years, Reaser said the outlook for San Diego remains strong.

“San Diego has been weathering these storms for a long time now,” she explained.

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