What BRAC recommendations? Katrina will save Louisiana jobs!

If at first you don't succeed ...

Right before the wicked sisters Katrina and Rita struck, rejoicing all around, from city, state and national elected officials occurred when the Defense Base Closure and Realignment Commission (BRAC) spared New Orleans part of planned activities (thus jobs) cuts as part of its task to align resources and military needs. But it really didn't serve as that much of a consolation prize for the state.

The original proposal would have closed the Naval Support Activities center in Algiers entirely by taking some things out of state entirely (Navy) and moving other activities (Marines) to the Belle Chasse Naval Air Station-Joint Reserve Base. Instead, the Algiers center stays open and the Marines are intended to stay put. Further, the Algiers facility will be reshaped in the hope of attracting new federal clients.

But, when all is said and done, from the state’s perspective it has lost with certainty almost 1,000 “jobs” (actually, military personnel for the most part). In addition, it has given away $92.3 million to have been pumped into the area economy by the expansion that would have occurred at Belle Chasse to suit the transfer of around 1,500 Marines, instead promising to spend in the neighborhood of $65 million in bonds (perhaps up to $100 million) to rebuild the Algiers facility and hoping to find the private sector willing to pitch in around another $100-135 million for the project. If all goes right, that means the state will forgo possibly as much as $200 million to save 200 jobs for sure and to hope to attract a few hundred, maybe a couple of thousand jobs sometime in the next several years.

These million-dollar jobs might turn out to be one-sixth that price if the state can talk the federal government into letting the Navy jobs stay and that actually was part of the state’s request. But only slight hope remains that BRAC would come back and change its mind on that account. Further, none of the “federal city” plan even is certain to happen. BRAC gave the state a Sep. 30, 2008 deadline to have funding in place for the conversion. The state says it will not proceed on the project unless it has tenants lined up. If it doesn’t, the Marine transfer happens anyway.

Economically speaking, the private sector continues to send a loud and clear message by its reluctance to locate in Louisiana in tandem with its showing no compunction to cut back work forces in the state (leading to ferocious spin control from the state), so the only reason we could expect the federal government to be any more bullish on locating activities in the state would be for political reasons. As it is, the “federal city” is in a district held by a Democrat whose state has a Democrat governor. Only its freshman Republican senator could get much in the way of political mileage out of this, but so would its senior Democrat senator (provided she can win reelection in 2008). The only nearby Republican House member also is a freshman.

In short, the facility, even with tens of millions of state dollars pumped into it, may employ only a fraction of the jobs lost. Even with the state putting in as much as $100 million and refusing another almost $100 million shot into the economy, even with a couple of thousand jobs created (making the total loss only a thousand) these are pretty expensive jobs indeed. And, they won’t be coming our way for many years while the thousand gone leave soon.

And all of this was prior to damage of facilities as a result of the hurricanes but, worse, the long-term consequences of which in terms of lost area population and productive capacity and future hurricane risk could doom any relocations to make the concept a reality.

But, wait ... riding to the rescue in both the Republican senator's bill and the Democrat senator's bill (yes, Sens. David Vitter and Mary Landrieu proposed basically the same bill) is the federal government and the generosity of the taxpayers who support it, in the form of giving the state for the porject $160 million! This is pork barreling at its finest. BRAC said the state had to pay to even have a chance at these jobs, and now its senators want to shift the costs away from it entirely and have it ahead $60 million – a nice consolation prize if those jobs don’t show up.

With the project less attractive than ever before, these senators are using Katrina as an excuse to make it happen anyway. And it’s another reason, besides their miserable performance before, during, and after Katrina and Rita’s vicissitudes, why Louisiana politicians’ credibility continues to erode faster than an Orleans Parish levee.