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Pentagon Budget Drains Most Cities, Report Says

August 15, 1991

WASHINGTON (AP) _ Three-fourths of the nation’s cities provide more tax dollars to support the Pentagon than they receive back through military contracts and other defense spending, says a report issued Thursday.

The report by James Anderson, a Michigan State University economic historian, said 250 of the 335 metropolitan areas designated by the Census Bureau ″show a net loss in their balance of payments with the Pentagon.″

In a similar study two years ago, Anderson found that most congressional districts also pay more taxes for military spending than they get back.

Pentagon spokeswoman Susan Hansen said the awarding of contracts, location of facilities and other spending decisions are based on military, not geographical considerations.

″Defense is for the common good,″ she said. ″We provide for the whole country rather than for the benefit of one particular area.″

Boston Mayor Raymond L. Flynn, president of the U.S. Conference of Mayors, said the report ″shows that Pentagon growth means urban loss. ... Cities all across America are being shortchanged by federal neglect and misplaced federal spending priorities.″

But Daniel Mitchell, economist with the conservative Heritage Foundation, said the report envisions the defense budget as ″a pork-barrel redistribution device.″

Anderson, whose study was published by Employment Research Associates, a nonprofit consulting firm based in Lansing, Mich., said at a news conference, ″Pentagon bloat is eroding our industrial foundations and impoverishing our communities.″

Not only does the Pentagon favor a select few metropolitan areas at the expense of others, he said, but the 1980s military buildup deprived all cities of money for education, housing, transportation and other programs.

Anderson did say that base closings and other reductions in military spending should ease the impact in future years on the ″net loss″ cities.

The study was based on fiscal 1990, during which U.S. military outlays totaled $299 billion and an additional $4.9 billion was spent on military categories of foreign aid.

By calculating the portion of taxes paid in each metropolitan area that went to support the military, Anderson found that Pentagon spending provided large benefits for some Sun Belt locations while imposing burdens on city dwellers in the Frost Belt.

In the Midwest, for example, 76 of 85 metropolitan areas had net losses.

But some states in the South and West also don’t get a dollar-for-dollar return on the share of taxes they pay to support the military, the report said. California and Texas, which were net gainers from such spending 10 years ago, are now in the loss column, Anderson said.

The South had 89 net-loss metropolitan areas compared to 36 that showed a net gain.

″Even the West, which glitters with Pentagon gold,″ has 32 net-loss cities compared with 27 that showed a gain, he said. The net-gain areas are concentrated in Southern California, Washington and New Mexico.

Of California’s 23 metropolitan areas, he said, 13 now show a net loss. These include Los Angeles, with a loss of $2.3 billion, and San Francisco, $1.9 billion.

The biggest losers are New York, $8.75 billion; Chicago, $7.72 billion; Detroit, $4.64 billion; Houston, $3.28 billion; Philadelphia, $2.61 billion; Atlanta, $2.26 billion; Los Angeles, $2.32 billion; Miami, $2.01 billion; San Francisco $1.95 billion; and Cleveland, $1.85 billion.

Washington, D.C., is the biggest net gain area, with a gain of $6.57 billion.

The report said the average tax burden for military spending per metropolitan area was $773 million.

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