The U.S. military’s economic benefit to Hawaii has been significantly overestimated, according to a new report from a consortium of groups and activists who contend that past studies failed to calculate the full impact of the armed forces in the islands.

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The 199-page report, titled “The True Cost of the U.S. Military in Hawaii,” says the military contributes $7.2 billion to Hawaii’s economy and 6.4% to its GDP annually, about 30% lower than most recently touted by the state and Pentagon.

The report, compiled in response to military land lease negotiations in the islands, was prepared by a coalition of scholars and activists who said they wanted the public and policymakers to have as much information as possible before any decision-making regarding the state and military. It was published by Institute for Policy Studies, a Washington, D.C.-based progressive policy think tank.

Co-authors include local community members with a history of vocal opposition to the military’s presence and impact in Hawaii, including Jon Osorio, dean of the University of Hawaii at Manoa’s Hawai‘inuiakea School of Hawaiian Knowledge; Wayne Tanaka, director of the Sierra Club of Hawaii; and Kyle Kajihiro, assistant professor of the UH Manoa Department of Ethnic Studies. Brown University’s the Costs of War Project co-founder Neta C. Crawford and director of programs Heidi Peltier, as well as Institute for Policy Studies associate fellow Christine Ahn and researcher Omar Ocampo also contributed to the report.

The report covered a multitude of topics, including the military’s environmental and social impacts, and whether its strong presence in Hawaii is actually necessary for national security. In addition to the lower overall economic impact, the authors argue that:

— The military paid $1 for 65-year Hawaii land leases, while the fair-market rent for the land totals up to $133.7 billion since 1964.

— Military demand for off-base housing has inflated average rents on Oahu by 7.1% in 2024, costing nonmilitary renters an additional $234.8 million, or about $1,848 a household.

— The cost to Hawaii of the Red Hill fuel disaster and remediation for PFAs, or so-called forever chemicals, at just three bases is “conservatively estimated” at $493 million.

When reached for comment on the report’s findings, U.S. Indo-Pacific Command officials said Hawaii is “the strategic cornerstone for U.S. security in the Indo-Pacific, where the Department of War maintains the essential capabilities necessary to defend the homeland and ensure a free and open region.”

“We respect the land and people of Hawaii and are committed to being good community members— protecting historic and sacred lands,” command officials said. “We remain steadfast in our dedication to strengthening our partnerships with the people of Hawaii through mutual respect and collaboration. Protecting these islands from global threats ensures a safer future for our families and a thriving Hawaii.”

Much of the new report examined the military’s economic impact on Hawaii. It questioned several findings of a Military and Community Relations Office report, published in January, which said the military’s direct contributions to the economy and GDP were $10.2 billion and 9%, respectively, in 2023. MACRO is a federally funded state agency housed in Hawaii’s Department of Business, Economic Development and Tourism. A recent Department of Defense study reached similar conclusions as the MACRO report.

“The economic benefits of the military’s presence, in particular, have been dramatically overstated,” said “True Cost” report co-author David Vine, a former professor of anthropology at American University in Washington, D.C., and a political anthropologist who has written extensively about the impacts of military bases.

Vine, who calculated the report’s estimates, said treating all military spending related to Hawaii as benefits to the local economy is the fundamental problem with the figures reported by the Pentagon and state.

The vast majority of military employees in Hawaii are from out of state, Vine contends, and the $6.2 billion in military personnel spending that the state and federal governments reported includes retirement benefits, Social Security, Medicare and taxes that often leave the state. When those benefits are accounted for, Vine concluded that personnel spending is more likely around $3.7 billion or less. He also found additional benefits leaving the state when accounting for federal contracts awarded to out-of-state companies.

Vine noted that his findings were in line with a 2023 report by DBEDT, which found that the military’s contributions to the state’s GDP from 2017 to 2022 hovered around 6%, while all federal government contributions were around 12%.

But retired state economist Eugene Tian, who reviewed Vine’s portion of the new report, noted the DBEDT 2023 study did not include the civilian workforce while the MACRO and Department of Defense study did, so the comparison may not be valid.

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Still, Tian said, the “True Cost” report provided “a good direction in estimating federal military impact in Hawaii,” especially its estimation of state taxes and on-base purchases.

Both Tian and Vine separately recognized that a comprehensive study on the military’s impact in Hawaii is difficult because of lacking data. Tian added a comprehensive study should also include the impact of visitors attracted by the military including personnel family and friends and those traveling to the state for military business and exercises.

“Overall, this is a good study trying to include estimates of all the leakages from the military spending,” Tian said. “The concept is different from the methodology used by the federal government,” where the U.S. Bureau of Economic Analysis “treats the military as an industry and includes spending on wages, equipment, and operations.”

MACRO Executive Director Laurie Moore told the Honolulu Star-Advertiser in an email that the January report examined the overall economic activity associated with defense spending in Hawaii, which included payroll, procurement, infrastructure investment and other spending.

She said the agency’s report is not an “apples-to-apples” comparison to the Institute for Policy Studies report because it uses different methodologies, asked different economic questions, and applied an alternative framework that focused on how much spending circulates locally.

“It is important to recognize that the military’s impact on Hawaii extends beyond any single number,” Moore said. “Economic measures are one component, but they are only part of a broader picture. The military’s presence intersects with workforce development, emergency response capabilities, infrastructure, education partnerships, environmental stewardship, community relationships and quality-of-life considerations.”

Regarding the new report’s finding on the impact on Oahu rental prices, Ocampo of the Institute for Policy Studies called the U.S. military “a major, largely unacknowledged driver of Hawaii’s housing crisis.”

“Year after year, rents and home prices climb while wages don’t, pushing out middle- and low-income families,” Ocampo said. “The military’s footprint is part of the problem — and reducing it is part of the fix.”

Moore said MACRO recognizes housing affordability as one of the state’s most significant challenges, which is “influenced by many interconnected factors.”

The “True Cost” report also argued that military land lease renegotiations should account for cleaning up the environment and restoring it, especially from PFAs. It suggests converting military bases into public infrastructure, cultural sites, farms or parks guided by Native Hawaiian principles.

Moore agreed that contamination and remediation concerns deserve accountability but added that PFAs “legacy contamination and long-term environmental impact” involve several complex factors and can arise from various historic and current activities in private and public sectors.

“Recognizing that broader context does not lessen the responsibility of any entity, including the military, to address contamination where it is identified,” Moore added. “Continued transparency, remediation efforts and informed dialogue remain important in helping communities understand and address issues that affect Hawaii’s people and the environment.”

Osorio said he hopes the findings of the report can be considered in the negotiations on the future of military land leases, which are up in 2029.

“As we go into this period of confrontation with U.S. Army and the Navy and with our own state officials, as well as federal officials,” Osorio said, “it’s really important that the public be fully informed about the impact of that military presence here.”

The new report was cosponsored by Brown University’s the Costs of War Project, ‘Aina Aloha Economic Futures, ‘Ilio‘ulaokalani Coalition, Sierra Club of Hawai‘i and the Transition Security Project.

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