Virginia first in Defense Spending

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For the first time in at least 16 years, in 2009 Virginia became the number one state for direct Department of Defense expenditures. According to the DoD’s recently released annual Atlas/Data Abstract for the US and Selected Areas, Virginia received almost $57 billion in federal fiscal year 2009, including about $18 billion in payroll and nearly $39 billion in contracts. This edged out both California and last year’s leader Texas.

Over the past decade Virginia, California and Texas have dominated Defense Department investment. In 2009 the three received almost a third of the total $528 billion domestic defense spending. The most recent numbers show that Virginia ranks second behind California for contract spending and second behind Texas for payroll, which includes active duty, DoD civilian, National Guard/Reserve, and retired military pay.

Where the Commonwealth excels is in the number of DoD civilian employees, leading the nation with just under 90,000. A study conducted last year for VNDIA by George Mason University’s Center for Regional Analysis determined that the economic benefit to the state of these civilian workers is significantly greater than that of uniformed personnel. Virginia is strong there as well, however, ranking fifth in the nation with 63,000 active duty service members.

Virginia’s strongest lead is found in per capita spending by the Defense Department. While the Commonwealth barely edged out California for overall spending, the Golden State is the most populous in the nation making it only 14 in rank for per capita DoD spending. Virginia remains a solid number one here, and the $7,223 per resident spent by the DoD in Virginia more than doubles number two Connecticut.

The cumulative effects of this direct spending and employment add up quickly. Last year’s GMU study showed that in the end, the Defense Department contributes to about 16 percent of Virginia’s gross state product.

Virginia’s $56.9 billion in DoD investment comes in just ahead of California’s $56.7 billion. The Commonwealth passes all other states handily in per capita spending – the Defense Department spent $7,233 for each of Virginia’s 7.8 million people in 2009.

From the Defense Advocate, a publication of the VIRGINIA NATIONAL DEFENSE INDUSTRIAL AUTHORITY | Advocates for the Nation’s Military in Virginia | | JULY 23, 2010