For Massachusetts residents who oppose the wars in Iraq and Afghanistan specifically or who oppose war generally, the news coming from the Donahue Institute at UMass may not be as cheery as one statewide business association makes it sound.
“The success of the defense industry in Massachusetts during the past two decades is one of the great untold stories of the Commonwealth’s economic history,” begins a report released last month by the Associated Industries of Massachusetts. (The Donahue Institute prepared the report, funded by a grant from Raytheon, the giant military contractor.) “As the overall economy has struggled in the face of two recessions and fundamental industry shifts, Massachusetts defense contractors have quietly almost tripled the value of their contracts to $15.6 billion, increased their employment rolls by over 70 percent to 115,563 people and increased their overall economic output by 146 percent. These contracts support businesses large and small, as well as many of our state’s higher education institutes. … The industry generates more than $3 billion in tax revenue for local, state and federal governments struggling with fiscal emergencies.”
In 2009, the $15.6 billion in defense contracts awarded to Massachusetts firms represented 85 percent of all federal contracts awarded here. According to AIM, defense is the leading industry sector in the state.
About 65 percent of the contracts, totaling $10.1 billion, went to just four organizations in 2009: Raytheon topped the list, with $4.58 billion, followed by General Dynamics ($2.14 billion), Massachusetts Institute of Technology ($1.75 billion) and General Electric ($1.68 billion).
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For Western Mass. residents, whatever their feelings are about military matters, this much should be clear: the $146 million in government military contracts for this region represents an incredibly small percentage of that $15.6 billion whole. Of the cities and towns in the region, Northampton is the top beneficiary of military spending—$49 million awarded to six contractors—followed by Pittsfield ($34 million) and Springfield ($19.5 million).
In places like Northampton, whose elected city officials in October passed a resolution against the United States’ involvement in Iraq and Afghanistan, strong anti-war sentiments seem to coexist comfortably with support by the local government for the city’s biggest defense contractor.
Widely known as a maker of submarine periscopes, Kollmorgen Electro-Optics in fact makes high-tech optics for a wide variety of military applications. According to the company’s website, Kollmorgen’s new real-time 360-degree imaging system, known as One-360, is designed to give remote military command a complete and close-up view of distant battlefields. To demonstrate how well the device works, Kollmorgen uses panoramic images of downtown Northampton as a stand-in for a “complex battlespace.”
If spending on high-tech optics systems like Kollmorgen’s was part of the Northampton City Council’s broad target in October when it voted to urge the federal government to “redirect our federal tax dollars to the pressing educational, employment, health, housing, nutritional, infrastructure, energy, and environmental needs of our city, state, and country,” neither the nature of Kollmorgen’s work nor the source of its contracts got in the way of the Northampton City Council’s earlier decision to provide the company with financial assistance in the form of tax breaks through the city’s Tax Increment Financing (TIF) Program. The TIF represents a 5 percent tax break on new growth. In an emergency meeting in December, 2009, the City Council extended the length of the TIF for Kollmorgen and other qualifying businesses. At the time, city councilors expressed concern that Kollmorgen would leave Northampton if it didn’t get the TIF extension, which was tied to a substantial state tax credit.
Kollmorgen currently employs 381 workers in its Northampton facility and, according to a recent report in the Daily Hampshire Gazette about the company’s ongoing relocation from King Street to Village Hill, expects to add “at least 30 high-paying jobs over the next five years.” The Gazette reports, “In addition to high-paying professional jobs that are staying local, Kollmorgen will breathe life back into a site that’s been unused for some 15 years and they’ll pay a significant amount in property taxes, some $220,000 a year, to the city in doing so.”
