Employment cuts will hurt Md. economy, but exactly how much?


December 06, 1991|By Ted Shelsby

How do you factor a secret organization into the state economy?

That's the dilemma faced by economic development officials as they try to determine the effect of a proposed 15 percent cut in the staff at the National Security Agency, the super-secret spy organization based in Anne Arundel County.

Questions of NSA's importance to the state's economic health arose yesterday, the day after Robert M. Gates, the new director of the Central Intelligence Agency, suggested eliminating one in nearly every seven jobs at the spy complex off Route 32.

That could result in the loss of as many as 6,000 jobs. According to an estimate by Representative Tom McMillen, D-Md.-4th, employment at the electronic spy center is between 15,000 and 40,000 people.

While NSA officials are usually pretty tight-lipped about the organization's mission, they offered some insight yesterday into the dollars they pour into the regional economy.

Its payroll alone is staggering. Last year, NSA paid $831.7 million in salaries.

That's $250 million more than Baltimore Gas and Electric Co. and the local General Motors plant combined paid their workers. BG&E has 9,400 workers and GM employees about 3,400 at its Broening Highway plant.

NSA's salary figure was only for its Maryland workers. About 15 percent of its employees commute from Washington and four nearby states. Its total payroll is secret.

NSA workers last year paid more than $54 million in income taxes to Maryland.

If Mr. McMillen's higher employment estimate is correct, it means the spy center has as many workers in the state as Marriott Corp., Martin Marietta, Giant Food, BG&E and Hechinger combined.

To fulfill its missions of providing computer and communications security and gathering foreign intelligence information, NSA awarded contracts totaling $641.4 million to nearly 2,000 Maryland firms.

J. Gilbert Haus Jr., vice president of Airport Squares Cos., a real estate development firm that has erected 25 buildings near the airport, says about half its space, "in excess of a million square feet," is leased by NSA.

Leslie Legum, president of Circle Cos., another real estate development firm active in the area surrounding NSA's puzzle palace, said a cutback of the magnitude suggested by Mr. Gates would have an effect on future development in the region.

Mr. Legum also noted that NSA was the major draw in luring other companies into the region, including Ford Aerospace, General Electric and RCA.

Michael Lofton, Anne Arundel County's director of economic development, said a 15 percent cut at NSA would hurt during good economic times and would be a lot more painful in today's economic environment.

"Any time one of the largest employers in the state talks about a 15 percent reduction, it's time for serious concern," he said.

Mr. McMillen questioned the wisdom of cutting back on the nation's intelligence gathering, but he expressed hope that the skills of NSA's workers could be applied to commercial ventures, such as protecting the secrecy of the computer records of banks.

Security agency and the local economy

NSA's payroll approaches the $1 billion mark. But the economic spinoff from spying goes on and on:

$25 million in rent at off-site locations;

L $37 million on maintenance and upkeep of its own facilities;

$10 million in official air travel, 98 percent of it out of Baltimore-Washington International Airport.

Since 1982, NSA has completed $156 million in construction projects, including its own integrated circuit plant. Between 1992 and 1997, $86 million in construction spending is projected.

The puzzle palace's employee service sold nearly 200,000 tickets to local theaters, concerts and sports events in fiscal 1990.

Its utilities bill for fiscal 1990 totaled $18 million.

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