My source is the GM for the NEX on my base. I have no reason to think she is hiding or distorting facts to protect her job.
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Commissaries Closing?
- Thread starter exNavyOffRec
- Start date
My source is the GM for the NEX on my base. I have no reason to think she is hiding or distorting facts to protect her job.
I wouldn't think she is either but the larger Exchange 'enterprise' is supported by DoD, albeit to a much lesser an extent than the commissaries, exactly how much I haven't seen in print.
Spekkio
He bowls overhand.
I think a non-servicemember would ask why military gets to have their food subsidized by federal tax dollars via BAS, then gets to shop at a grocery store subsidized further by tax dollars, but John Q. Public has to buy food with his taxable income at a completely for-profit grocery store? When eating shipboard food it's one thing, but there's nothing exceptional about grocery shopping inport.
My issue with reducing pay or benefits is that people come to rely on it in their budgets. It's not so simple as saying "starting on Oct 1, you cannot shop at the commissary anymore." It might be for the flags making those decisions, but those few hundred dollars a month matter a lot to E-4/E-5s with dependants.
If you close the commissaries and give servicemembers the supposed benefit of them, I guarantee it would be less than what we spend on the commissary (and, let's be realistic about the benefit too - not an extra $4,500 per servicemember). It seems a little ridiculous to me that we get a tax free benefit (BAS) and a store that gives us tax free savings and at cost groceries. Why not just close the store altogether and give servicemembers the benefit entirely? DoD doesn't have business being a grocer.
I say this as a fairly loyal member of the commissary - I'd say I purchase about 3/4 of my groceries there annually, but I definitely do think that its a benefit that could be distributed more efficiently.
Or this.
Not true. We asked for doctors out in town and got it. It was purely at the decision of the Tricare rep, as the MTF was not considered "full" at the time we applied.
That is changing. 8,000 patients on Prime who are seeing doctors outside the gate at NAS Jax are being pulled back into the MTF.
Other MTF's are doing the same but with different numbers. This is purely a cost savings measure.
The problem with this idea is again the math. According to the FY2012 DeCA financial report, the return on investment is about 2x for the money spent on this benefit, meaning that the $1.4B spent on DeCA by the government produces $2.8B in savings for shoppers there. So, to enact your plan, you would have to cover $2.8B, not simply $1.4B to have there be a net zero affect on the service member. Now the report does not break down the demographic of the shoppers... so if you drop everyone except active duty members, you might be able to reduce the overall savings number and thus save the $1.4B, but I think that is a tall order.
In addition, this is a benefit. Pure and simple. So by closing the commissaries you are reducing service member benefits. The options as I see it are:
1. Do nothing. Continue to provide service members a $2.8B benefit for the cost of $1.4B
2. Close the commissaries. Eliminate the $2.8B benefit and tell the service member to "suck it up"
3. Restructure the system. Spend a large amount of money on how to close the commissary, but increase BAS, or change pay scales, or figure out how to offset the increased cost on families through some other medium. If you trust the government to figure that out, then good on you. I doubt it would produce a 2 for 1 ROI. And once again, it would cost service members more. BUT, it would look great for a FITREP bullet because you saved the govt $1.4B!!! Even if you asked that bill to be paid by the military member.
4. Look at ways to reduce costs and work more efficiently within the current system. Maybe increase the surcharge (5%), which hasn't been changed in almost 30 years. Explore better logistics operations. Figure out how to minimize waste. Reduce SKUs to only the best selling items. Etc. Run a more efficient business in other words.
DeCA will always be a subsidized benefit of the military. It will never be self sufficient if it is still in place to be a benefit.
The bottom line is should the military service member bear the burden of increased costs in order to save the government money? My answer in this case is still no.
Not sure "saved the gov't 1.4 billion dollars by designing and implementing a plan to close all CONUS comissaries" is a FITREP bullet that I would want or one that would help out in any promotion board.
But, I agree with most everything else.
Spending $1.4B for customers to save $2.8B seems like a pretty good investment to me. (2x ROI).
Spekkio
He bowls overhand.
ROI is calculated from gross investment, not net profit/loss. You have to add in the operating costs that the commissary makes back as well -- another 6 billion IIRC. So the total minimum cost to keep the commissaries open in 2012 was $7.5 billion, $6 billion of which were recouperated in sales; it's not a 2 for 1 win for the servicemember.
Not only that, you're collecting tax money from about 314,000,000 citizens (157,000,000 if you want to go with the bogus 51% number) to pay for 1,430,000 AD personnel to have cheaper groceries. That's 100 people paying $10/year for every person in the military to be able to shop at a commissary, yet the report says "Value of Benefit for taxpayers," as if all taxpayers are allowed to shop there. The taxpayer not only loses $10 for taxes supporting hte commissary, but he also loses the economic benefit of servicemembers shopping at a private enterprise in his neighborhood. There is no ROI for the taxpayer whatsoever.
I'd also be weary of hanging my hat on 'savings' figures. Every store I've ever encountered claims that I will 'save' by shopping there. Savings compared to which store? Does the servicemember hypothetically seek out deals at other grocery stores, or just buy everything at full price when calculating 'savings'? Is this number based on actual food sales, or aggregate cost of consumers buying the entire inventory vs. another competitor? Is it based on the prices they would have to charge to turn a profit?
Also, if you go back to about page 18-22 in the financial report, you'll see that DECA has some issues with their accounting practices, thus further raising the question of how accurate that figure is.
And even after all that, it still doesn't answer the basic question of why servicemembers ought to be entitled to tax subsidized grocery shopping after they have already received tax subsidized BAS.
Not only that, you're collecting tax money from about 314,000,000 citizens (157,000,000 if you want to go with the bogus 51% number) to pay for 1,430,000 AD personnel to have cheaper groceries. That's 100 people paying $10/year for every person in the military to be able to shop at a commissary, yet the report says "Value of Benefit for taxpayers," as if all taxpayers are allowed to shop there. The taxpayer not only loses $10 for taxes supporting hte commissary, but he also loses the economic benefit of servicemembers shopping at a private enterprise in his neighborhood. There is no ROI for the taxpayer whatsoever.
I'd also be weary of hanging my hat on 'savings' figures. Every store I've ever encountered claims that I will 'save' by shopping there. Savings compared to which store? Does the servicemember hypothetically seek out deals at other grocery stores, or just buy everything at full price when calculating 'savings'? Is this number based on actual food sales, or aggregate cost of consumers buying the entire inventory vs. another competitor? Is it based on the prices they would have to charge to turn a profit?
Also, if you go back to about page 18-22 in the financial report, you'll see that DECA has some issues with their accounting practices, thus further raising the question of how accurate that figure is.
And even after all that, it still doesn't answer the basic question of why servicemembers ought to be entitled to tax subsidized grocery shopping after they have already received tax subsidized BAS.
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While the ROI of DeCA as a company is calculated that way, the ROI of this investment is not. If the government is looking to provide a benefit to the service member, this way provides a 2x ROI for their investment. The government spends $1.4B and the servicemember recieves $2.8B. If the government was trying to get that benefit to the servicemember in a pure cash payment, then they would need to spend $2.8B. The $6B you mention is offset by the income of the commissary. So $6B is self sustaining and $1.4B is not.
I don't know how they calculate the savings. My guess is by taking an average cost of a product in the local market vs the cost of the product at the commissary. However if you don't believe you can save money at the commissary, then you obviously don't look at prices. Go buy a pack of chicken at the commissary and then out in town and let me know how many dollars you saved. It is substantial.
As for the question of entitlement, that is the heart of the debate. Do you believe that this benefit should continue to be provided to the service member or not? The commissary is part of the pay and benefits package of being in the military. If you believe that the taxpayers should not be footing as large a bill for the pay and benefits of the military, then the commissary should be closed. Of course in that case, this $1.4B could be taken out anywhere since everything a service member recieves is tax subsidized... Pay, BAS, BAH, Hazard Pay, Tricare, etc. In the end it is a tax savings through reduced financial benefit to the service member. If you believe the military should recieve less benefit in order to save tax payer dollars, then close the commissary and tell the service member to suck it up.
Spekkio
He bowls overhand.
We'll have to agree to disagree here. It's clear to me that this is funky math in a pitch to keep the commissary around.
Also, you didn't answer my question: What is this $2 ROI even based on? The report doesn't say, but you're willing to quote it as fact. I've got some stuff in my garage to sell you. You should borrow someone's money to buy it, I promise they'll save $2 for every dollar you spend!
I think your comparison wrt to pays and allowance is apples and oranges to exclusive stores for servicemembers that operate on the taxpayer's dime.
I don't think people would have an issue with raising an E-4's taxable pay. I do think that they would have an issue keeping a grocery store open in CONUS at a loss to the taxpayer when the servicemember could just as easily go to the local Walmart, Costco, Sam's Club, whatever like every other working human being in America. Besides, if commissaries exist for AD servicember benefits, why are they always closed by the time they get liberty?
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http://www.commissaries.com/documents/whatsnew/afr/afr_2012.pdf
Page 15 explains the savings and the 2 for 1 ROI. It is pretty straightforward.
Customers in 2011 saved $2.8B by buying items at the commissary instead of out in town.
The government gave DeCA $1.4B to make the commissaries avialable to these customers.
Therefore, in order to provide a $2.8B BENEFIT, the government only had to spend $1.4B
How is the pay and allowance not comparable? Is pay provided by taxpayer money? Is healthcare provided by taxpayer money? Is flight pay provided by taxpayer money? Is the savings on food from the commissary provided by taxpayer money? Yes in all cases.
You are missing the point with your comparison to Walmary, Costco, etc. Those locations are MORE COSTLY to the service member compared to the commissary. The commissary is not a competitive business, it is a cost + 5% BENEFIT. Perhaps the optics of the benefit aren't as good as simply raising the base pay, but it is a financial BENEFIT to the service member. Why don't we pay for healthcare on AD? Everyone else does. Why is the taxpayer subsidizing my doctor's visit? Dental cleaning? Eye exam? Because it is a BENEFIT and part of the compensation of the military.
Once again, the question is, do you beleive that service members should reduce their benefits in order to save taxpayer money? Closing the commissary will save tax payer money, and reduce service member benefit. That is the bottom line.
Page 15 explains the savings and the 2 for 1 ROI. It is pretty straightforward.
Customers in 2011 saved $2.8B by buying items at the commissary instead of out in town.
The government gave DeCA $1.4B to make the commissaries avialable to these customers.
Therefore, in order to provide a $2.8B BENEFIT, the government only had to spend $1.4B
How is the pay and allowance not comparable? Is pay provided by taxpayer money? Is healthcare provided by taxpayer money? Is flight pay provided by taxpayer money? Is the savings on food from the commissary provided by taxpayer money? Yes in all cases.
You are missing the point with your comparison to Walmary, Costco, etc. Those locations are MORE COSTLY to the service member compared to the commissary. The commissary is not a competitive business, it is a cost + 5% BENEFIT. Perhaps the optics of the benefit aren't as good as simply raising the base pay, but it is a financial BENEFIT to the service member. Why don't we pay for healthcare on AD? Everyone else does. Why is the taxpayer subsidizing my doctor's visit? Dental cleaning? Eye exam? Because it is a BENEFIT and part of the compensation of the military.
Once again, the question is, do you beleive that service members should reduce their benefits in order to save taxpayer money? Closing the commissary will save tax payer money, and reduce service member benefit. That is the bottom line.
Yeah, for that FITREP bullet, you'd forever be known by your Sailors as......
*You're a mean one LT
".
BzB