In the middle of the Pacific Ocean, the U.S. military’s future in Hawai‘i has become a topic of growing debate given the upcoming expiration of leases for around 46,000 acres of military base land. The armed forces leased the lands from the state of Hawai‘i in the 1960s for 65 years at a token fee of $1. The leases start expiring in 2028.

Some unsurprisingly want to see these territories returned. The U.S. military played a key role in seizing indigenous lands after overthrowing the Hawaiian monarchy in the 19th century. The military still occupies around 25 percent of the most populated island, O‘ahu, and a larger proportion of the state of Hawai‘i – 5.6 percent – compared to any other state.

The state of Hawai’i and the Trump administration have engaged in discussions about the future of these lands. Hawai‘i’s Congress members and the official indigenous-led state agency, the Office of Hawaiian Affairs, have gotten involved in the debates. 

With the size of the military’s presence in Hawai‘i hanging in the balance, we helped co-author a major new report earlier this year, “The True Cost of the U.S. Military in Hawai‘i,” to provide a clear assessment of the armed forces’ local impact.

For years, many have made bold claims, in particular, about the economic benefits the U.S. military brings to Hawai‘i. The facts show the military’s contribution is significantly smaller than most people think, while the economic damage and other harms caused by the military’s presence remain hidden or overlooked.

Drawing on what are collectively more than 45 years of experience studying the U.S. military, our calculations show that the Pentagon and others have been exaggerating the military’s impact by billions of dollars. Meanwhile, the military’s presence is driving up rents and fueling the housing crisis, damaging the environment and public health, and limiting the growth of industries that would create more local jobs than the military.

Amid the debates about the expiring leases, here’s what we found to be the military’s true impacts.

Exaggerated Claims

The Pentagon, parts of the state government, media outlets, and boosters often describe the military as part of a “three-legged stool” – with tourism and real estate/construction – that serves as the backbone of the state’s economy. They point to billions of dollars in annual military spending, including $10 billion for FY2023, as evidence of the Pentagon’s contribution to the state’s economic wellbeing.

With the help of a 2025 research trip to Hawai‘i and an examination of government spending data, we identified the fundamental problem with these claims: These sources imply that all Pentagon spending related to Hawaiʻi directly benefits the local economy.

This is untrue.

Significant chunks of Pentagon spending never touch the local economy. Instead, those funds are paid to people and corporations located in other states and countries.

In total, we found that the military’s actual economic impact is closer to $7.2 billion per year. This is $2.8 billion and nearly 30 percent less than the $10 billion spent by the Pentagon.

The military thus represents 6.4 percent of Hawaiʻi’s total gross domestic product (GDP) rather than the 9.2 percent recently claimed by the Pentagon and state government sources. Notably, our 6.4 percent calculation is similar to the most recent estimate of 6.0 percent of GDP made by Hawai’i’s Department of Business, Economic Development & Tourism.

$7.2 billion is still a lot of money, but at least five other industries are larger statewide, including real estate, accommodation and food services, state and local government, retail, and health care and social assistance.

Where the Money Goes

Unlike other industries where the vast majority of employees are residents in the state of Hawaiʻi, the opposite is true for the military. The vast majority of military personnel are not from Hawai‘i.

As a result, significant chunks of military spending going toward salaries and benefits actually leave the local economy when active-duty military personnel from outside Hawai‘i leave the state.

Thousands of military personnel counted as living in Hawaiʻi actually reside on Navy vessels for large parts of the year or are deployed abroad. While some of their salaries end up in the state’s economy, much does not. In total, our calculations show Hawai‘i benefits from $3.7 billion in spending on military personnel, which is around two-thirds less than the $6.2 billion boosters claim.

Large amounts of Pentagon spending also leave the local economy because many military contracts go to corporations that are not based in Hawai‘i. The top recipient of Pentagon contracts performed in Hawai’i in 2023, for example, was a joint venture involving a Spain-based multinational and a Texas-based company partnered with a smaller Hawaiʻi-based firm. Two of the rest of the top five recipients also aren’t locally headquartered.

The state conservatively estimates that 15 percent of contract dollars awarded to non-local companies leaves Hawai‘i in the form of profits and money spent where the companies are based. This suggests that at least $301.5 million in contract dollars claimed to benefit the state in 2023 actually left Hawaiʻi.

Overlooked Costs of the Military’s Presence

Aside from the inflated estimates of economic benefits, the military’s presence costs Hawai‘i in many other ways that are rarely recognized. Because most military personnel and their family members are not legal residents of Hawai‘i, most don’t pay state income taxes, yet they still benefit from the state’s public infrastructure, public services, and other amenities.

The military’s presence also helps fuel the housing affordability crisis. Our report estimated that active duty service members living off base and renting in the private market pushed up rents on the island of O‘ahu by 7.1 percent in 2024 alone. This caused local non-military renters to pay an average of $154 more per month and $1,850 more per year in rent. This upward pressure on rental prices caused by the military helps contribute to housing instability, the homelessness crisis, and the thousands of households forced to move out of the state because they were priced out. 

The problem is the generous housing allowances the Pentagon gives its military personnel: a monthly average of $3,679 per service member in Honolulu County. This combined with the military’s occupation of land, which keeps land prices high and the housing supply low, directly harm Hawai‘i’s residents.

Meanwhile, the 46,000 acres of land the military has rented for $1 per lease since the early 1960s represents billions of dollars in lost rental revenue. Based on the fair market value of this land, our report calculates Hawai‘i could claim up to $134 billion in back rent.

This sum does not include the billions of dollars needed to repair the environmental and public health damage caused by military training, testing, and other activities. A 2017 report by ProPublica estimated total past and future environmental clean-up in Hawai‘i to be at $2.77 billion, not including the $400 million spent since 1994 to only partially clean up the island of Kaho‘olawe after decades of Navy bombing.

Some will say that the military creates the jobs needed on Hawai‘i. It is undeniable that military spending creates jobs. However, it’s an inefficient job creator when compared to other industries. Our report followed years of research in showing that military spending creates an average of 5.3 jobs per $1 million invested compared to an average of 12.3 jobs created when the same money is invested in healthcare, education, food production, housing, and energy efficiency.

Put another way, spending in non-military industries creates an average of 134 percent more jobs than military spending, with the vast majority of jobs going to locals. It is simply more efficient to invest in other sectors of the economy rather than rely on military spending.

New Beginnings?

The future of the leased lands remains unclear. Returning most or all of the territory to Hawai‘i would not require any significant change in the military’s overall presence. The leases represent less than 20 percent of the military’s approximately 250,000 acres occupied in the state. Simply put, the U.S. Armed Forces have more than enough space to continue their current operations – although “The True Cost of the U.S. Military in Hawai‘i” report also presented safer alternatives to the military’s current strategy, centered around Hawai‘i, of aggressively confronting China in the Pacific.  

The Army already has indicated it will give up nearly 800 acres of a controversial training ground responsible for significant environmental damage. Some locals imagine a university dedicated to learning, cultural preservation, and ecological repair for the space.

As our report showed, hundreds of former bases across the United States and the world have been converted into new spaces benefitting local communities. In Hawai‘i, a former Army fort became a state park and monument, a community college, a state emergency operations center, and a school for children with special needs. Elsewhere, base conversion has produced thousands of jobs and created housing, hospitals, business incubators, solar and wind farms, cultural preservation sites, and much more.

As the people of Hawai‘i consider their future, they deserve an accurate picture of the armed forces’ actual impacts, and the alternatives, rather than billions of dollars in exaggeration.

The co-authored report “The True Cost of the U.S. Military in Hawai‘i” can be found here.