Aerospace and defense industry - AZ Business Magazine March/April 2012

Arizona Jobs at Risk in Latest Defense Budget

The world is a dangerous place, which is why we should proceed with extreme caution when we consider big cuts to the Defense Department’s budget.

What’s happening in Ukraine right now is a reminder that there are existential threats to freedom and stability around the globe. In a time of escalating tensions worldwide, we don’t want to take tools out of our warfighters’ toolbox. As Sen. John McCain reminded attendees at a recent roundtable discussion with Arizona’s defense community hosted by Arizona Manufacturers Council Chairman Steve Macias, the world is getting more perilous, not less so.

The president on Tuesday released his fiscal year 2015 budget request, with the Defense Department coming in at $495.6 billion, $25 billion less than was projected a year ago. Those are big numbers. Obviously every sector of government deserves close scrutiny; in the federal government there’s almost always fat to be trimmed.

But let’s keep in mind that defense spending is a government responsibility enumerated in the Constitution. We’re not talking about the Railroad Retirement Board.

And there is a direct correlation between the defense budget and good paying Arizona jobs, where the defense industry is a major economic driver.

Defense jobs come with an average annual salary of $85,000, 41 percent above the average Arizona manufacturing salary. The top companies in the defense sector are represented in Arizona. Names like Boeing, Honeywell, General Dynamics and Raytheon dot the landscape in a sector responsible for over 30,000 jobs. These are the desirable, export-oriented jobs that other states are clamoring for.

These manufacturing jobs can thrive here because of all Arizona has done to make the state more attractive to these job creators. Reforms like a reduction in the corporate income tax, property tax relief, and a tax calculation that makes Arizona more competitive for companies that build products here but sell them outside our borders have all made the state a better place to do business than it was just a few years ago.

This year Gov. Brewer has again made manufacturing competitiveness a top priority. In her State of the State address this year, she called for an elimination of the sales tax that manufacturers pay on their electricity consumption. Arizona is one of the few states that charges sales tax in such a way.

Our nine military installations are important, too. We cheered when Luke Air Force Base was named as an F-35 training facility. However, we must also be cognizant of the impact of potentially phasing out the A-10. This could have significant implications for Davis-Monthan Air Force Base and southern Arizona’s economy. While the current trend might be towards unmanned aircraft, until that technology is ready to replace manned missions, the A-10 is still important.

Tucson-area Rep. Ron Barber called the A-10 “an invaluable aircraft for our military, Davis-Monthan Air Force Base and the Tucson community.” Rep. Trent Franks and Sen. McCain, with their spots on the House and Senate Armed Services Committees, and the rest of our delegation members are vocal supporters of Arizona’s defense jobs

We appreciate our congressional delegation’s support of our armed forces, as well as Arizona’s defense and aerospace industries. We would encourage all of our members of Congress to advocate for an Arizona-friendly budget that supports a strong defense system.

Glenn Hamer is the president and CEO of the Arizona Chamber of Commerce and Industry. The Arizona Chamber of Commerce and Industry is committed to advancing Arizona’s competitive position in the global economy by advocating free-market policies that stimulate economic growth and prosperity for all Arizonans.