Ohio, New York may suffer under consolidation of Pentagon accounting

More than a month after the Pentagon announced its recommendations for base realignment and closure (BRAC), many states have been rallying to save their military bases. But a couple of states are now putting up a fight to keep their not-as-glamorous defense accounting offices from closing.

Cleveland is home to one of the largest Defense Finance and Accounting Service operations (DFAS) in the country. The site, however, is slated for realignment — a move that could lead to the loss of more than 1,000 jobs in a city that the Census Bureau deemed the poorest big city in the United States in the fall of last year.

An additional 5,000 jobs would be lost nationwide as the Pentagon plans to close 20 small accounting offices and consolidate all payroll and accounting functions in three centers: Columbus, Indianapolis and Denver, argued Steven LaTourette (R-Ohio).  For example, California is slated to shutter four DFAS centers and centers in New York, Florida, Kentucky, Maine, Missouri and South Carolina would also be closed.

“The entire DFAS process has to be reversed,” said LaTourette. “The loss of jobs would be devastating.”

The economic disruption in areas that are losing mostly civilian jobs is going to be high, said a lobbyist who is working on behalf of several states. “They buy houses, and they go to the schools,” he said. However, the 1,013 civilian jobs that the DFAS center in Cleveland would lose are slated as DoD-civilian, which means that those people should be offered alternative employment within the Pentagon’s system, said Daniel Else, a defense specialist at the Congressional Research Service.

“The economic impact on the area seems to be pretty darn small,” Else said, adding that it would be one-tenth of 1 percent. “If they talk about significant impact on local economy, they will have to prove it.”

LaTourette is joined in his criticism by another Republican, Rep. Sherwood Boehlert from New York, and Ohio Democrats Dennis Kucinich and Stephanie Tubbs Jones. Rome, N.Y., is slated to lose up to 382 jobs with the planned closing of the DFAS center there.

The bipartisan team also has support from the House Armed Services Committee chairman, Rep. Duncan Hunter (R-Calif.), according to Boehlert.

“I have unlimited faith in the BRAC Commission process,” which analyzes the Pentagon’s list and comes up with its own recommendations, Boehlert said at a press briefing Thursday. Commission member Lloyd Newton, a retired Air Force general, is scheduled for a site visit in Rome on June 22, Boehlert said.

Meanwhile, House lawmakers have been struggling to get accurate information from the Pentagon’s BRAC decisionmakers. It took repeated e-mails to the Department of Defense and up to seven days to receive a response to questions, said LaTourette. Representatives in states that will lose their DFAS centers “can’t rely on [Pentagon’s] information given on DFAS,” he said.

Ohio and New York’s fight is the common reaction of communities that find themselves on the BRAC list. “I have yet to find a community that does not want to reverse the [Pentagon’s] decisions,” said Chris Hellman, an analyst with the Center for Arms Control and Non-Proliferation. Hellman worked on the Hill in the early 1990s for then-Rep. Tom Foglietta (D-Pa.), who had a DFAS center in his district that was closed.

The communities may have very little chance to get off the chopping block, Hellman said. The Pentagon has been reducing and consolidating the DFAS centers for years, he said.

“This is a trend that we have seen with DFAS over the last decade, and this is an opportunity to continue the trend,” Hellman said. He argued that the military would have closed a lot more in the past 10 years had Congress not put on the breaks.

“With electronic communications it is something you can easily consolidate” and, with a military that increasingly wants to become paperless, “there is not a geographical imperative that says it will have to be done in a specific spot,” Hellman added.

There are 12 military pay functions in the Pentagon’s countrywide accounting system: active-duty pay, reserve pay and retired pay for each of the four services. Cleveland handles eight of the 12 pay functions. LaTourette said that Indianapolis is likely to absorb most military payroll functions, but the facility there cannot handle an additional 3,500 workers.

Officials do not expect a large number of workers to transfer to the three consolidated offices, which could mean that new people would have to be trained and larger facilities built, LaTourette argued. Indianapolis currently specializes in active-duty pay.

“It is risky and foolish to move so many military pay functions to a center that is not trained to do them,” he said. “Our soldiers, reservists and retirees better cross their fingers and hope they continue to get paid on time.”

The Defense Department was able to move its centers around and consolidate them in the past without disrupting the pay flow, said Else, and the military should be able to do that again.

To shutter the Cleveland DFAS will cost the Pentagon nearly $29 million and no savings will be seen for several years, LaTourette argued. Meanwhile, the Defense Department spent $173 million in previous years to bring the smaller centers up to par. It will cost about $159 million to close them.

On June 27, both Ohio and New York will have a chance to make their cases in a hearing in front of the BRAC Commission.