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US military boosts ET economy $862 million

KNOXVILLE, Tenn. -- East Tennessee isn't known as a hub for military activity although National Guard and Reserve units populate area counties.

But a new report indicates active duty personnel, Guard and Reserve units, armed forces retirees, and veterans are making a hefty financial impact.

The U.S. military pumped about $862 million into East Tennessee's economy in 2010, according to a report released March 3, by the East Tennessee Military Affairs Council.

The report, produced by the non-profit ETMAC in conjunction with the Knoxville Chamber, outlined the economic effects of various sectors of the military and related commerce, such as military contracts to private business, located within 50 miles of Knoxville. The report did not include federal Department of Energy facilities.

While there are no large active-duty military bases in East Tennessee, several small to medium-sized units create a large impact, according to Mike Edwards, Knoxville Chamber president and CEO. "The impact of these units may not be as easily understood," Edwards said.

The $862 million includes $219,115,097 from more than 7,000 active duty, National Guard and Reserve personnel and operations. The Air Force accounts for the largest share, with an impact of $131,572,949, of which $123 million is from McGhee Tyson Air National Guard Base. The U.S. Army produces the next largest share at $68,946,417, of which almost $37 million is generated by the 278th Armored Cavalry Regiment.

Military retirees made up the largest segment, accounting for $334,098,279 of the total economic impact in 2010. Since the report was last produced in 2003, the number of local military retirees has increased by 2,000 to more than 8,000.

Bob Franke, a Loudon Country commissioner and retired Air Force colonel, moved to Tellico Lake after more than 37 years of active duty around the country. Franke said he became familiar with the area on trips to McGhee Tyson Air Base.

Many retired military officers have moved to lakeside communities around Knoxville, he noted.

Benefits paid to veterans amounted to $135,392,911. Defense Department contracts accounted for $173,548,871 of the annual impact, largely a result of military activity in Iraq and Afghanistan.

The 2010 East Tennessee Military Impact Report can be view at www.etmac.org.