Cost-of-living surveys are administered every three years for each overseas location to determine where service members are buying food, clothing, gas and services. (Pixabay)
Troops stationed in Hawaii and Guam stand to lose more than half of their cost-of-living allowances — hundreds of dollars per month in many cases — that could dent their paychecks as early as April 1.
Hawaii Sen. Mazie Hirono lambasted Defense Department officials last week over the coming 50% to 66% cuts during a subcommittee hearing of the Senate Armed Services Committee.
“As we continue to combat inflation, the thought of slashing the cost-of-living allowance for service members in Hawaii is absurd,” Hirono said. She told the Defense Department officials that her office had fielded numerous complaints from Hawaii service members about the impending cuts.
“Today, the cost of a gallon of gas in Hawaii is $4.85, more than a dollar above the national average of $3.46,” Hirono said at the March 15 hearing. “A gallon of milk in Honolulu is $7.25 compared to the national average of $4.41. The cost of housing in Hawaii is higher than any other state – I could go on.”
The looming cuts are the result of two separate surveys last year.
The Defense Department conducted a living-pattern survey in Hawaii from February through mid-March in 2022 and collected data for the Retail Price Schedule from March through June 2022.
Unit commanders in Hawaii were briefed in early fall on proposed cuts to cost-of-living allowances based on the survey’s findings.
In November, the Defense Department announced it would conduct a second “do-over” survey. According to a Feb. 15 Defense Department memo, the results of the second survey changed little from the original one.
On Oahu, where most troops in the state are based, the second survey concluded that the overseas cost-of-living allowance should decrease by eight points.
An eight-point point decrease would reduce a service member’s allowance according to their grade, years of service and number of dependents.
For example, an E-6 with 10 years of service and three dependents would lose $312 per month, the February memo states. A similarly situated O-4 would lose $408 per month.
The decrease is greatest for service members on the island of Kauai, home to the Navy’s Barking Sands Pacific Missile Range, where the rate dropped 14 points. The examples above would see respective decreases of $546 and $714.
Guam decrease
On Monday, Joint Region Marianas, which oversees support of U.S. installations on Guam and the Northern Mariana Islands, said in a Facebook post that it was “working closely with Indo-Pacific Command to advocate for an appeal of the new Overseas Cost of Living Allowance (OCOLA) Adjustment Policy for Guam.”
Troops stationed there are faced with a 66% decrease, and the regional command said in the Facebook post that “we strongly encourage service members and their families to prepare for an OCOLA decrease, which is anticipated to reflect in the April 1” pay stub.
“The change in pay will take effect on March 16, 2023,” the post states.
The Defense Department did not respond to questions posed Wednesday by Stars and Stripes.
The cuts in overseas cost-of-living allowance affects only active-duty service members and their families, not federal civilian employees.
‘Evened the playing field’
Cost-of-living surveys are administered every three years for each overseas location to determine where service members are buying food, clothing, gas and services.
Survey teams collect actual prices at the top two stores or businesses identified in a living pattern survey, and all the data is used for comparisons to stateside pricing. That means if stateside prices increase, cost-of-living rates will decrease.
At last week’s Senate subcommittee hearing, Gil Cisneros, under secretary of defense for personnel and readiness, said overseas cost-of-living cuts are not just a Pacific islands phenomenon.
“Germany, Japan – all these areas are facing the same cut because, again, the COLA is meant to bring pay into alignment with what it would be here, to make sure that the dollar, if they were in the States, would stretch just as far overseas,” Cisneros said, adding that inflation “doesn’t really play into the COLA analysis.”
“As people are struggling here in the continental United States, it’s kind of evened the playing field out,” he said.
Hirono remained unconvinced.
“Clearly I don’t think these kinds of cuts are justified for service members in Hawaii,” she said. “They’re already having a pretty hard time.”
