States play a critical role in supporting the national defense mission. Installations, supply chains, service members and communities rely on a complex web of state, territorial, and federal systems. This ecosystem of investment and support builds off of the Department of Defense’s National Defense strategy and is resourced by Congress. Installation, equipment, personnel, and service spending drives the development of industry supply chains and regional economies. Foundational data on these DoD investments is captured in the annual Defense Spending by State (DSBS) report. This analysis is compiled to help state and local leaders assess a region’s defense assets and identify opportunities to target assistance to support more resilient and innovative communities and businesses. The National Governors Association is partnering with the DoD to explore the ways the DSBS data can inform and strengthen state economic and infrastructure planning.
The DSBS report is developed annually by the US Department of Defense Office of Local Defense Community Cooperation (OLDCC- formerly the Office of Economic Adjustment). OLDCC leverages the capabilities of state and local partners through grants and technical assistance to enhance readiness of defense installations and ranges and assists states and local governments to maximize support of the military mission. The DSBS report is a key element of OLDCC’s mission to provides high level insight for state and local partners to better understand the ways in which defense investments can be optimized and supported. The most recent report, released in January 2021, is the second to include an assessment of the defense footprint in the U.S. territories. This addition highlights the territories’ crucial role in the defense mission as well as the economic impact of these activities.
The data in the DSBS report provides an important first step- a door to open to other state/region specific planning conversations. With DoD personnel counts and payroll information as well as first and second tier contract spending, it can be used to better understand the ecosystem that supports defense communities and enhances and drives regional economies. As the commander-in-chief of their respective National Guards, Governors sit at the nexus between the national defense mission and state and local security and life-saving missions. The National Guard and Governors provide a unique perspective on the dual nature needs of the Nation – at home and overseas.
The key to impactful utilization of the Defense Spending by State report lies in its connection to other relevant federal data sources as well as state and local data. Additional data can fill in the details of the outline that the DSBS report provides to allow for meaningful strategic planning, and policy and program development. Since the development of the DSBS report, a number of states have commissioned studies to explore the impact of the direct and indirect effects of installations and defense spending on their economy.
States have also utilized the DSBS data as a starting point to better understand their industry supply chains, workforce development needs, and options for accessing and leveraging federal programs. Some states showcase the level of investment made in defense to attract business and feature their rankings as a key indicator of economic competitiveness.