Maine’s economy is steeling for a $250 million punch to the gut if the Defense Department’s plan for military bases flies – and that’s just in payroll losses.

The announcement that Portsmouth Naval Shipyard is slated to close and that Brunswick Naval Air Station will be scaled back to half its size has sent a chill through the state’s economic planners. The two installations employ more than 5,000 civilians and nearly as many military personnel.

“If they follow through, it will certainly have a significant impact,” said Galen Rose, the acting state economist in the State Planning Office. The Navy projects a total 4,266 jobs lost between 2006 and 2011 in Brunswick and 9,166 in Portsmouth under the plan, if there is no economic recovery.

In Brunswick, forecasters have estimated the base’s current economic impact on the region at $333 million. The Navy pegs the figure at $187 million in salaries, contracts, materials and medical purchases a year. The Defense Department is recommending about half the base’s military personnel – 2,300 people – be reassigned and 61 civilian jobs eliminated. The base payroll averages about $120 million a year.

The Portsmouth shipyard, located on Seavey Island in the town of Kittery, employs about 100 military personnel and 4,300 civilians. It bought about $30.7 million worth of goods and services from New England states last year, according to the Seacoast Shipyard Association. The shipyard paid Maine-based employees about $185 million last year, and New Hampshire-based employees about $122 million.

Rose said that when the secondary effects of the job losses are taken into account, the overall employment impact could easily be two or three times the military job losses.

“It’s certainly serious,” he said, especially for the southern part of the state.

“Clearly the effect of the shipyard closing has a greater impact,” said Charles Colgan, an economist with the Muskie School of Public Service. He said the general growth of the Bath/Brunswick area and the nature of the BNAS jobs mean it can weather the job losses and other economic blows better than the border communities.

“In Kittery, it’s a very different situation,” he said. “You’re shutting down a manufacturing facility with ties to other manufacturing facilities throughout Maine and New Hampshire.”

That means the people who lose their jobs are generally skilled and older – making it harder to find replacement jobs for them.

“The costs are higher because you’re not talking about a lot of entry-level positions” such as sailors, said Colgan.

Rose, however, said it might not be so bad for the Portsmouth area because of its geography and the general health of the economy in southern Maine.

“It’s in a densely populated area of the state in an excellent location for redevelopment,” said Rose. “Pease Air Force Base took between five and 10 years to recover and I suspect we’re looking at the same here.”

The pace of the military downsizing is key to the economic impact, Colgan noted. If the Navy implements its changes in Brunswick over a period of years, the local labor market, schools, housing market and other sectors will be able to absorb the losses more easily.

“Brunswick will probably be able to recover within 10 years,” he said. “In Portsmouth/Kittery, it’s much tougher to predict. It could take much longer there.”

He said the process in Kittery could be much more drawn out, depending on the future use of the site.

Other base closures have taken two to three years to take effect after the final decision.

The State Planning Office is assessing the role of the defense industry in Maine’s economy for an analysis requested by the governor’s office. Rose said depending on how much depth the governor is looking for, the report could be released as early as next week.

If efforts to reverse the Pentagon recommendations fail, the state and federal labor resources will be ready with job retraining and assistance programs. But no one in Augusta is talking about that now.

“We are trying to demonstrate that the bases shouldn’t be on the list,” said Adam Fisher, spokesman for the Maine Department of Labor. “We’re looking at this as the beginning of a process, not the end.”

Efforts to reach Lewiston-Auburn development officials about the local impact were unsuccessful.


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