DOD Readies New Plan for Trimming Commissary Subsidies

In the face of congressional resistance to its plan for phasing out funding for commissaries, defense officials are working on a new proposal that aims to preserve discounts for military families and protect employees from pay cuts, according to draft documents being prepared for the administration’s fiscal 2017 budget request.

The new plan still is designed to make military grocery stores self-sustaining — as military exchanges are — but it would trim funding for commissaries more gradually than the administration’s FY 2016 proposal while testing variable pricing as a way to offset lower funding levels, reports Stars and Stripes. The plan also would prohibit commissary employees from incurring a pay cut while the stores are being converted to non-appropriated fund activities, which receive no congressional funding.

DOD had proposed slashing the Defense Commissary Agency’s budget by $322 million in FY 2016 — out of a total allocation of $1.4 billion — and $1 billion in FY 2017. The proposal would have forced some stores to close, while reducing days of operation and operating hours, and laying off staff, at the remaining stores. 

The new plan would cut the agency’s budget by only $8 million in both FY 2017 and 2018, with steeper cuts over the following three years. The slower rate at which the funding cuts would be introduced would ensure they don’t outpace promised efficiencies, and as a result, preserve customer discounts, a resale industry expert told the publication. And by preserving the discounts at commissaries, customer traffic at base exchanges would not suffer.

The proposed reforms are supported by a new report from Boston Consulting Group, which was asked by the commissary agency to find ways to increase stores’ efficiency, according to the store.

Dan Cohen
Dan Cohen
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