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Back Local News Draft SEIS: Military buildup to bring millions in tax revenue

Draft SEIS: Military buildup to bring millions in tax revenue

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THE military buildup will bring millions in additional tax revenue for the government of Guam, with a maximum of $86.4 million in 2021 and a steady-state level of $40 million in 2028, according to the draft supplemental environmental impact statement.

The draft impact study said personal income tax revenue, which includes Section 30 reimbursements, is estimated to be the primary driver of GovGuam tax revenue impacts associated with the Navy's revised plan to move 4,700 Marines from Okinawa to Guam.

Under the modified program, the timetable for constructing facilities to accommodate the troop relocation has been extended from seven to 13 years and the first major wave of Marines is anticipated by 2020.

The plan is anticipated to generate a maximum of 7,031 full-time jobs in 2021, approximately 6,150 of which are related to construction and 881 related to operations. Of the total number of new jobs, 3,058 are projected to be picked up by Guam residents.

At steady-state, by 2028, labor force demand is expected to increase by 1,438 full-time jobs, of which 762 are estimated to be taken by Guam residents.

According to the draft SEIS, civilian labor force income is expected to climb to $296 million in 2021 and reach a steady-state level of $67 million in 2028.

"The estimated average salaries for jobs related to the construction phase ($38,600) and the military operational phase ($46,000) would be considerably higher than the 2012 Guam median salary of $28,074," the draft study said.

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Construction activity will take place in three categories – nonresidential construction for base operations and training facilities; residential construction for cantonment housing and furnishings; and equipment handling and installation of furnishings and equipment into newly constructed facilities.

The economic analysis also includes the operational aspects involving federal defense operations spending.

"Permanent Marine and civilian military pay was input into the IMPLAN model as employee compensation (a category that does not contribute to direct labor income, though civilian pay was later added to labor income results as direct labor income)," the SEIS said.

"Because rotational Marines would live only part of the year on Guam, it was assumed that 20 percent of their income would be spent on Guam; this spending was input into the model using a spending pattern similar to the spending pattern of visitors."

The economic analysis projected gross island product to increase by a maximum of $635 million in 2021 and decline to a steady-state level of $75 million by 2028.

The primary driver of gross island product impacts in 2021 would be DOD construction activity. During the steady-state period, gross island product impacts would be primarily driven by expenditures related to Marine Corps operations.

 

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