11/4/2008 - EIELSON AIR FORCE BASE, Alaska --
Some servicemembers stationed overseas, including Alaska and Hawaii, will see a slight decrease in their cost of living allowance -- effective this month.
This comes as a result of reductions in spendable income for military families across all ranks and services.
Every year the Bureau of Labor Statistics collects shopping behavior data specific to American military families. This is accomplished through a Consumer Expenditure Survey which details how military families allocate their spendable income across all COLA types of goods and services. Spendable income is the total Regular Military Compensation minus basic allowance for housing, taxes, savings, life insurance, gifts and contributions.
The BLS updates for fiscal year 2009 indicate average annual expenditures for COLA-type goods and services have decreased, causing spendable income to decrease an average of 1.54 percent across all ranks and family sizes. The decrease in spendable income is due primarily to the increase in housing and utility expenditures across all income levels.
Higher expenditures on housing and utilities result in a significant decrease in net average COLA expenditures. The reduction of annual spendable income results in slightly lower monthly COLA payments for servicemembers. Spendable income varies from member to member based on: pay grade, number of dependents, and years of service; so changes in COLA payments will also vary accordingly.
The spendable income data change is independent from the Retail Price Survey that we are conducting which could result in additional data changes. Most servicemembers in Alaska will see a slight decrease in their COLA. Lower enlisted members could see their COLA decrease by four to five dollars a month; more senior officers may see a decrease of up to $40 or more a month.
If you have questions about COLA or other military pay issues, please contact your local comptroller customer service.