The Economic Impact of Duluth's 148th Fighter Wing

There’s no doubt that Duluth’s 148th Fighter Wing is a highly prized part of the community. Affectionately known locally as “the Bulldogs,” the elite Air National Guard unit has a proud battle record, a tradition of public service, and a long list of alert missions, including air patrol in the wake of the September 11 attacks.

Pat Mullen, Chair of the Chamber of Commerce Military Affairs Committee, can easily tick off their accomplishments, from stopping the 2005 closure of the base, located near the Duluth International Airport, to modernizing the unit’s mission.

“We’ve gotten them from Block-25 jets to Block-50s...We’re already advocating for the F-35 Strike Fighter...that will help us sustain a base here in Duluth...into the [20]30s and ‘40s.”

The current mission of the 148th is Suppression of Enemy Air Defense, an anti-aircraft and surface-to-air missile function entrusted to only five wings of the entire US Air Force. During the threat of base closure in 2005, the Defense Department’s Base Realignment and Closure program determined that the 148th was of “low military value.” The Minnesota National Guard convinced the Pentagon to give the 148th a reprieve, but with little examination of the extent to which military spending benefits the local economy as compared to the taxpayers’ expense.

Both Duluth and Superior appear to pay out a good deal more than they get back, and the economic benefit is overstated by all levels of government.

Duluth’s 2015 share of military spending is $104,584,593—$1,216 for every man, woman and child. Superior pays the Pentagon $636,414 of Wisconsin’s total of $8 billion in taxes for the military.  For 2015, Minnesota pays $9.36 billion—just over $1,700 per capita—but only gets back $715 per capita in military contracts, ranking Minnesota 20th in economic benefit out of the 50 states plus Washington DC.

In the 148th’s 2014 Annual Report, the unit’s economic benefit to Duluth is broken down into four categories: Military Pay (just under $27 million), Civilian Pay (27.5 million), Operating Expenses ($21.4 million), Indirect Jobs Created (14.3 million). The unit’s executive officer agreed to release a more detailed breakdown of these categories, but has not yet provided the data as of press time.

On the surface, it seems like a fair tradeoff, with Duluth spending only $10.3 million more than what the 148th brings in. The unit’s annual report claims over 1,000 jobs, 450 of which are full-time.

Minnesota had 20,274 military jobs in 2014 with an average annual salary of $32,717—46th of the 50 states plus DC. By comparison, Virginia—where nuclear submarines are built in Newport News for $2 billion apiece—has 136,176 military jobs that pay an average of $91,193.

Most 148th members are part-time enlisted reservists, who with four or more years seniority, make $344.10 a month, according to military data. Certainly this pay is significant to those earning it, many of whom rely on their reservist pay for tuition and mortgages, but it does suggest the overall economic impact is less than the $27 million reported by the 148th. Five hundred and fifty reservists, at $344 a month, comes to not quite $2.3 million.

The City of Duluth’s budget also overstates the economic impact of 148th employment by expressing it in terms of a percentage of the total number of employed Duluthians (2.48 percent) rather than comparative payroll.

A 2002 St. Louis County Planning Department report on the 148th offers some details, though they are hard to interpret. For example, the County report claims $3.3 million in jet fuel consumption produces 49 contracts—also listed as 49 jobs, which would mean 49 employees with an annual salary of more than $67,000 each.

An employee at Monaco Air, which sells jet fuel at the Duluth Airport, says they do not sell fuel to the unit. “The 148th actually does its own fueling,” a fact confirmed by Captain Jodi Kiminski, Executive Officer of the 148th. Kiminski says she doesn’t know where the unit’s jet fuel comes from, but “our guys are the ones pumping it in.” 

So, who’s doing the work of those 49 contracts for $67,000 a year, as reported by St. Louis County?

The County’s report also includes categories of employment impact, like hospital jobs (24.6), Auto Dealers & Service jobs (16.4), construction (31), and “Eating & Drinking jobs” (42)—all for a total of 453 jobs related to the presence of the 148th.

Yet the report’s recorded $32.2 million in “Local Sales Activity” is merely the total of $25.8 million in Air Guard income, plus $3.1 in construction, and $3.3 million for jet fuel, with no explanation of how these relate to the 1,809 military and civilian jobs claimed in the report.

Kiminski says the 148th’s operating expenses of $21.4 million in 2014 include overseas deployment (last year, they went to Bulgaria and Estonia), training exercises nationwide, and flying the planes themselves—all of which Kiminski concedes “doesn’t necessarily impact Duluth.”

Yet the operating costs of a single F-16D are $7,000 to $24,000 per flight hour, depending on calculation method. Even multiplying the lower of the two by the 148th’s recorded 2014 flight hours of 3,400 would be virtually the unit’s entire 2014 operational expenses—and all of dubious local benefit even if the jets flew only over Duluth. 

To be sure, there is more to community benefit than cold, hard cash. In 2014, the Bulldogs logged 4,700 volunteer hours to projects like Adopt-a-Highway, Habitat for Humanity, the Red Cross, and the Boy Scouts.

In a post-9/11 world, the 148th provides counterterrorism support to a port city and to the largest city near the Canadian border all the way from Detroit to Spokane.

Not to mention that, even if the economic benefits are overstated, the 148th doesbring a good bit of money into Duluth. However, none of that negates the need for transparency by the City, the County, and the unit itself—and any drawbacks are usually ignored.

At the very least, military spending is not positively correlated with a state’s economic and social wellbeing; indeed, there’s some evidence of a negative correlation.

Mississippi and Alabama have considerably higher military job incomes than Minnesota—$53,399 (31st in the nation) and $58,591 (23rd), respectively. But Minnesota’s average per capita income is much higher—$30,913 (10th), compared to Mississippi’s $20,618 (50th) and Alabama’s $23,680 (45th), and the unemployment rate in Minnesota is much lower—3.7 percent, compared to six percent in both Mississippi and Alabama.

This is a pattern. Washington DC has the highest defense contract spending per capita, a whopping $6,452, but its poverty rate is also the highest at 20.7 percent. Texas has 172,297 active duty military personnel, making it 15th in military jobs and 11th in Pentagon contracts, while Texas is 30th in average per capita income.  

But the post-9/11 atmosphere has made it more difficult to question or criticize military spending, conveniently (for the Pentagon’s $600 billion budget) equating skepticism with a failure to “support our troops.”

US military spending is the highest in the world, exceeding that of the next nine countries combined, seven of which are US allies (Saudi Arabia, France, Great Britain, Japan, Germany, India, and South Korea). Of the top 10, only China and Russia are potential adversaries.

The US has a military presence in 70 countries, including Germany and Japan, which are probably safely on our side by now. France and the United Kingdom—the third and fourth biggest military powers in the world—have bases in ten countries and seven countries, respectively.

None of Minnesota’s representatives in Congress have anything less than effusive to say about the 148th.

In response to a request for comment, Senator Al Franken issued the following statement: “The Air National Guard’s 148th Fighter Wing based in Duluth has long been recognized by our nation’s military leaders as one of the Air Force’s top units. It not only has distinguished itself when it’s been deployed overseas, but it continues to play an important role in safeguarding our national security along our northern border. Its mission also has a significant positive economic impact in the region and the airmen and women are an integral part of the Duluth community. That’s why I’ll continue to support the important investments we make in its planes and personnel.”

Eight District Representative Rick Nolan’s spokesman, Steve Johnson, declined comment, calling the Zenith’s past reporting “inaccurate” and “misleading.”

Fortunately, Nolan likes the 148th a great deal more. At a December 6 awards dinner, he said, “[T]here is no unit in our nation better prepared to protect our people, defend our homeland, or provide critical help in times of natural disaster than the 148th.”

Senator Amy Klobuchar responded, “The Bulldogs of the 148th are a critical asset to our nation’s defense and an invaluable part of the Duluth community. I worked hard to bring active association to the 148th Fighter Wing as part of a long-term plan to help strengthen our national security and to ensure the Fighter Wing remains competitive for the next generation of aircraft, like the F-35.

“I also worked to secure investments in the Duluth International Airport so the region will have the resources to support the F-35. I fought to make sure the 148th received new F-16s so it could continue to meet existing commitments and remain relevant today and well into the future. As the city’s seventh largest employer, the 148th generates over $90 million in activity annually for Duluth’s economy. I am committed to doing all I can to support our servicemembers and keep this crucial base strong.”

Klobuchar’s enthusiasm may be heightened by the $120,000 she receives in campaign contributions from some of the largest defense contractors, including $10,000 from Lockheed-Martin, manufacturers of the F-35 fighter jet, which the 148th wants to bring to Duluth.

At a cost of $1.5 trillion over 55 years, the Pentagon deemed the F-35 “too big to fail,” which for defense contractors represents guaranteed income. The Duluth taxpayers’ share of the F-35 bill is $1.7 million for 2015 alone; Superior’s is $10,363, according to federal budget research compiled by the National Priorities Project.

Michael Latsch, whose 2009 documentary, From Duluth to Balad, covered the 148th’s three deployments to Iraq, says the F-35 illustrates how high-cost, high-tech weapons have long-term policy and budget implications.

“The Air Guard wants to be of service to the nation that’s most useful at the current moment, and the close air support mission was, and is still, very relevant to the national defense and military situation. And so, seeking out [the F-35] helped to ensure [the 148th’s] relevance.” 

Kiminski responds, “If I didn’t fully, 100 percent believe in air power I wouldn’t be in my job...Our air power, air superiority, what we do...we do it well and we’ve continued to show progress...and there’s a reason why they keep calling us to do it.”

Duluth City Councilor Sharla Gardner, while quick to praise the 148th’s accomplishments, is concerned about the long-term consequences of America’s military spending. “There are good jobs [with the 148th]. It does contribute to the economy; the jobs pay really well.

“But the mission...has changed so much in the last 40 years because the Guard used to be the Air National Guard, with the emphasis on ‘guard.’ I remember when we had Hurricane Katrina and the Guard and the militia that would have taken care of a lot of that was away. They were deployed, you know, they were overseas.

“We’ve got an all volunteer army now. We have people being deployed eight, nine, and ten times...We seem to be in a constant state of war that we have apparently been in since 2001...It’s a distraction from the real state of our economy. It’s a distraction from our crumbling infrastructure that needs repairing. It’s a distraction from the problems we have within our own country.”

Duluthian Tom Gilliam spent nearly four years as a Navy Corpsman, assigned for six months to accompany ground troops in Viet Nam. “This valorization of the military owes its origin to...September 11. All this emphasis on security, on being protected.”

Gilliam regularly participates in parades as an anti-war member of Veteran for Peace. “You feel like you’re a cyclist at the Tour de France... There’s this reflexive thing to ennoble the cause [of Viet Nam], however wrong it was.” He notes that while 58,000 Americans died in Viet Nam, three million Vietnamese died, but there’s “not much empathy for the loss.”

>> The article above war written by Robert Kosuth, and first appeared in the excellent Zenith News newspaper.