Future defense cuts leave San Diego’s economy vulnerable, with the effects trickling to more than just the immediate communities and industries, according to a local economist at a Tuesday forum.
“It’s easy to see the direct impacts, sometimes it’s hard to see the second and third effects,” said Brig. Gen. Vincent Coglianese, commanding general of Marine Corps Installations West, Marine Corps Base Camp Pendleton.
Local military, as well as community and industry leaders, discussed the military’s economic impact on San Diego at a roundtable discussion at the Marine Memorial Golf Course at Camp Pendleton, hosted by The Daily Transcript.
Lynn Reaser, chief economist at Point Loma Nazarene University's Fermanian Business & Economic Institute, said San Diego appears to have weathered sequestration cuts, but there are “huge ripple effects” on the overall economy.
“The rest of San Diego is doing alright, but it’s not booming," Reaser said. "We do have a housing industry that is rebounding strongly; we have a consumer that is coming back to some extent. … The tourism industry is doing relatively well -- although that also will be affected by some of the reductions to funding. Overall, the rest of the economy today is feeling moderately well, but it still will be vulnerable to any major defense cuts that may continue to come down the road.”
As a result of budget cuts, the Marine Corps is decreasing from 202,000 to 182,000, and there will be about 3,500 fewer Marines in the Southern California area, Coglianese said.
In addition, the number of Marines deployed will also decrease by about half. There are typically 10,000 marines deployed just from Camp Pendleton, with a good portion in Iraq or Afghanistan, Coglianese said.
This will be reduced to about 4,000 or 5,000, and they will not be deployed to those locations. That results in 5,000 more Marines at the home station, and more training on Camp Pendleton.
There are about 38,000 Marines and 17,000 dependents living in Camp Pendleton, said Jerry Kern, deputy mayor for the city of Oceanside.
“What happens out here has a direct and immediate impact to what happens in the city of Oceanside,” Kern said.
He referenced the period of the first Gulf War, when the city of Oceanside lost about 15 to 20 percent of business overnight because no one was visiting the stores.
The city has diversified since that time, but what happens at Camp Pendleton still affects it.
About 30 percent of Fallbrook’s apartment occupancy is military, said Richard Kennedy, CEO of the Fallbrook Chamber of Commerce.
Fallbrook also serves as a gateway to Temecula, impacting the local gas stations and restaurants as Marines use the area as a thoroughfare to get there.
The military presence also affects tourism in the areas surrounding Camp Pendleton.
Kern said much of the tourism industry in Oceanside is driven by people staying in hotels to visit servicemen staying on base.
Tony Nufer, board member of the San Diego Military Advisory Council, said the country is just beginning to feel the effects of the budget reduction.
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