Painful prediction: Army cuts at Benning fuel projections of 1,000 additional job losses in Columbus area, declining population

The Columbus Park Crossing shopping and dining area has become a magnet for restaurants and retailers since making its debut more than a decade ago. --
The Columbus Park Crossing shopping and dining area has become a magnet for restaurants and retailers since making its debut more than a decade ago. -- Ledger-Enquirer file photo

They were blunt and painful words to hear Friday from a respected Georgia economist delivering an annual prognostication that essentially sets the tone for the rest of the year.

"My forecast for Columbus for 2016 is not good," said Jeff Humphreys, director of the Selig Center for Economic Growth at the University of Georgia's Terry College of Business.

He proceeded to inform community and business leaders gathered at the Columbus Convention & Trade Center that the local metro area is on a path to losing about 1,000 jobs this year, much of that a ripple effect from the U.S. Army's budget cuts and downsizing at Fort Benning.

The housing market will suffer, Humphreys said, as will retailers, restaurants and anyone else who relies on spending by soldiers to turn a profit. The 3rd Brigade Armored Combat Team is all but gone at Fort Benning, with the former warfighting unit completing its inactivation by this spring and taking an estimated $198 million in payroll with it, according to previous U.S. Maneuver Center of Excellence numbers.

Humphreys was equally as blunt with his suggestion for Columbus leadership moving toward what he called a "decline over the next several years" in the local population as the military presumably continues to downsize through 2017 and beyond to deal with soaring federal budgets.

"Double down on economic development and try to compete aggressively and effectively for projects," he said. "You've got to bring in some big projects. That's the bottom line."

Asked after the UGA economic event what the Greater Columbus Chamber of Commerce is doing in that regard, Bill Murphy, executive vice president of economic development, conceded pressure is on the organization. But work, much of it taking place behind the scenes, is ongoing.

"Quite frankly, we're working on, I would say, 13 active projects that range in size and scope from $10 million to well over $150 million" in capital investment, he said, acknowledging job possibilities from those prospects range from 50 to 400.

"Not that all of those will come to fruition, but to me it signals that there is confidence in our local economy," Murphy said. "We just have to make sure that we're putting the resources in play that we need to help those companies make the decision to go ahead with that investment."

Fighting for growth

Murphy and chamber President and CEO Bryan Anderson both pointed to the possibility that the U.S. military could change direction with future budget cuts based on world events. Even if Fort Benning were not to add any personnel, it could help stabilize the current precarious situation surrounding the next anticipated Base Realignment and Closure process.

"Due to the nature of the United States' security situation, you have many people high in our government who are asking the deeper question about is this the right time to be making these cuts in our nation's defense," Anderson said.

In the short term, Anderson, who has been on the job here less than a year, conceded the current prospect pipeline -- of which outside economists don't have access -- must become "more robust" as Columbus works to attract more employers and jobs.

"There are some prospects we are continuing to talk to that could say today -- and we pray for it every day -- 'We are now announcing we are investing $50 million and we are going to hire 100 people,'" the chamber chief said.

Delving deeper into the entire process, Murphy said the chamber has consultants working in Washington to help congressional leaders understand the stakes behind cutting the defense budget too much, particularly when it comes to Fort Benning, which trains infantry and armor troops for battle.

The organization also has "engaged consultants" to help identify leads at trade shows scheduled this year, Murphy said, while also working with Georgia economic development officials in Atlanta. He estimated a third to 40 percent of the leads the chamber receives each year comes from the state.

"We want to make sure that we're top of mind, that they know about our products, they know what we're working on," he said.

The chamber, which has downsized its own staff in recent weeks, will eventually look to add positions critical to economic development and corporate recruitment, Murphy said.

"That will be happening over the next probably six to eight months, the rest of 2016," he said. "But I'm very confident that we're going to get the resources that we need. I think the business community, the public sector all understand that we're in this together and that we've all got to be working toward getting economic development to happen in our community."

On top of Friday's forecast of 1,000 job losses this year, the Columbus metro area in December appeared to hit rock bottom on the unemployment front, with its 6.4 percent rate tying it with Albany, Ga., for the highest level in the state.

Humphreys did not issue a projection for local unemployment this year, but it could possibly get worse from the lack of major job gains helping the city gain traction.

Georgia as a whole is expected to see slower job growth in 2016 than in the past five years due to employers cautious about the economy and global events, the UGA forecast said. Still, the state should see 2.4 percent employment growth this year.

Columbus is the only metro area among the state's top five population centers that looks to see a decline in jobs.

Seeking opportunities

Mayor Teresa Tomlinson, after Friday's event, said the line has been drawn with the forecast job losses in Columbus. That simply means there's work to be done.

"I understand the challenges, particularly as it relates to Fort Benning," she said. "But I do see these tremendous opportunities, and now that we know where the benchmark has been set, we are all committed to beating that, and beating it by far. ... We've got to go out there and turn it around."

Tomlinson conceded it was "really tough" to watch the UGA PowerPoint charts Friday, with Terry College of Business Dean Benjamin Ayers displaying charts with the names of several companies that have either relocated to Georgia or expanded in the state of late -- none of them in Columbus.

Mercedes-Benz, Sage, Baxter International, General Motors, Chime Solutions, Fiserv, Unisys, Stefani and even TSYS, the credit-card processor headquartered in Columbus, were part of the presentation. In the case of TSYS, it opened a 450-employee call center in the Atlanta suburb of McDonough in 2014. The company said at the time it chose that city rather than Columbus because it wanted a site away from here for continuity sake, such as a storm damaging one facility or another.

"You have the Atlanta region, because it's so dense, a lot of these opportunities are spilling out along I-20 (near McDonough) and down along the other interstate corridors, such as I-75," Tomlinson said. "Because we're off the interstate system, it really just doesn't trickle down here. We have to make our own economy and that becomes a great burden. So we've got a lot of things to talk about from a structural standpoint."

That conversation includes the ongoing effort to "thaw" the city's property tax freeze, which allows homeowners to enjoy falling tax payments after being in their dwelling for many years. But the mayor, who is pushing state legislation to phase out the freeze, said it is a critical impediment to growth in the city.

One argument is that companies opt to go elsewhere because they know employees will face much higher property taxes initially when they buy a home locally. Prospects may seek out communities that don't impact their workers' initial earning power as much, which helps attract and retain them long term.

"I know there's a lot of political interest in it," Tomlinson said. "But we need to start turning from the political debate to more of the economic reality of it. Let's have a factual reality-based discussion about whether or not we have a tax system structure that will allow us to grow. And I think that net zero job growth over 30 years tells you we don't currently have that. The fact that we're struggling coming out of this recession shows that our system and our structure is not receptive to the type of growth opportunities that may be out there."

Absent landing a large company within the next few months, both Murphy and Tomlinson said the city will continue to rely on the resourcefulness of existing businesses in Columbus as some of them expand. The mayor said the entrepreneurial sector doesn't get as much attention as big employers, but it is extremely important.

"I cut a ribbon on a business two months ago with 65 jobs. Well, if we get 10 of those, we're doing great," Tomlinson said. "So we have to remember that the smaller businesses are out there, too, and we need to do what we can to support them. In tough economic times, the smaller businesses really help a local economy."