DOD Releases Report on Defense Spending by State in Fiscal Year 2019

 Jan. 13, 2021

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States and communities have a new tool to enhance national security and mission readiness, while making their economies stronger and more resilient. Today, the Department of Defense’s (DoD) Office of Local Defense Community Cooperation (formerly the Office of Economic Adjustment) released its Fiscal Year 2019 Defense Spending by State report to help states and communities better understand defense personnel and contract spending in their localities. This analysis helps state and local leaders assess a region’s dependence on defense spending and target assistance to support stronger communities and companies.  

Defense spending rose in Fiscal Year 2019. DoD contract obligations and payroll spending in the 50 states and the District of Columbia increased by $64.3 billion, or 19 percent, over the prior year. This was driven by a 19 percent increase in DoD contract obligations. Personnel spending in the 50 states and the District of Columbia increased by 4 percent. 

DoD contract obligations and payroll spending in the 50 states and the District of Columbia totaled $550.9 billion, which is 2.5 percent of the country’s gross domestic product (GDP). If the total spending were divided across every U.S. resident, it would amount to $1,678 per U.S. citizen. Of those funds, $403.9 billion (73 percent) were spent on contracts for products and services, while the remaining $146.9 billion (27 percent) paid the salaries of DOD personnel.  

California, Virginia, and Texas topped the list of recipients for overall defense spending. However, Virginia, Hawaii, and Alabama ranked highest when considering defense spending’s impact on their states’ GDP.  

The top ten states for total Defense spending in Fiscal Year 2019 were:

RANK    STATE        DEFENSE SPENDING (billions)
1.            California               $66.2
2.            Virginia                    $60.3
3.            Texas                         $54.8
4.            Florida                      $29.8
5.           Maryland                 $26.1
6.          Connecticut            $19.7
7.          Pennsylvania          $18.1
8.         Washington             $17.8
9.         Alabama                     $16.0
10.       Massachusetts      $15.8

West Virginia, Maine and Wisconsin had the largest increases in DoD spending from Fiscal Year 2018 to 2019. This was driven by large contracts to Northrop Grumman in West Virginia, General Dynamics in Maine, and Oshkosh Corp. and Fincantieri Marine Systems in Wisconsin. These contracts were related to rocket motor production, shipbuilding and military vehicle production.

The top ten recipients of Defense contracts in Fiscal Year 2019 were:

RANK    COMPANY              DEFENSE SPENDING (billions)
1.          Lockheed Martin           $45.6 
2.          Boeing                                  $25.7 
3.          Northrop Grumman     $19.5 
4.          General Dynamics         $18.6 
5.          Raytheon                             $15.7 
6.          United Technologies     $10.3 
7.          BAE Systems                     $7.3 
8.          Huntington Ingalls         $6.7 
9.          Humana                                $6.7 
10.        L3 Technologies             $4.9 

All ten companies were on this list in Fiscal Year 2018. United Technologies (47 percent), Northrop Grumman (41 percent), and General Dynamics (29 percent) had the largest year over year increases.

“The report compiled by the Office of Local Defense Community Cooperation can be a great tool to state and local officials,” said Ellen Lord, Under Secretary of Defense for Acquisition and Sustainment. “All of our work is aimed at supporting the National Defense Strategy and this report is key as we look to continue defense reform and modernization efforts.” 

Patrick O’Brien, the Director of the Office of Local Defense Community Cooperation, states the report is an opportunity for governors and local officials to use its data to strengthen their defense presence and supply chains.  Mr. O’Brien further indicates “state and local officials need to use this information to better understand the essential continuum of investments across people, equipment, weapons systems, real estate, and services required to maintain our National Defense. Across these areas, they should determine if there are opportunities to further develop workforce skills, enhance and improve innovativeness and buying power, and partner to strengthen the resilience of our installations and industrial base.”

Conducted between March and December 2020, the analysis primarily entailed an examination of DoD­funded prime- and sub-award contract data and defense personnel and payroll figures. Findings are drawn from an array of sources, including the DoD’s Defense Manpower Data Center and USAspending.gov, which is managed by the U.S. Department of the Treasury.

The FY19 report, as well as previous years’ reports, can be found on the OLDCC website at: https://oea.gov/defense-spending-state-fiscal-year-2019.