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Commissaries feel budget squeeze

Staff reports Published: May 19, 2013

Base commissaries face turbulent times as staff vacancies swell under a federal hiring freeze, employee furloughs remain a worry and the Defense Commissary Agency digests budget guidance for fiscal 2015 that will force new efficiencies on stores and possibly deeper cuts to store operations.

The guidance directs at least a 5 percent, $70 million, cut to the $1.4 billion annual taxpayer subsidy needed to run 252 base grocery stores. It also directs the agency to develop options to accommodate deeper cuts, as much as one third of the subsidy, without impacting commissaries overseas.

The commissary benefit has been targeted often over recent decades, usually when budget officials are told to identify quick savings or a new study concludes military shopping discounts are a costly anachronism for a modern force in an age when most patrons reside off base.

In the gloomy fiscal time of budget sequestration, there are some real, near-term factors threatening commissary services and patron access. There also is the more distant rumble that subsidies for stores might be slashed, which could deeply impact stateside shopping and, critics charge, even fumble a commitment to leave commissary operations overseas unchanged.

Watching these events closely is Patrick Nixon, a former commissaries director who now is president of the American Logistics Association. ALA represents manufacturers and vendors doing business with base stores.

Nixon said the most immediate threat to commissaries, where shoppers realize savings of more than 30 percent over commercial prices, is a federal hiring freeze, which took effect for stateside commissaries Feb. 4.

A hiring freeze hits commissaries harder than most other federal workplaces because 40 percent of store workers are military spouses or teenagers. That means high turnover and deeper job vacancy rates as families move to new assignments, leaving jobs that can't be filled and relocating near commissaries that can't rehire them.

"There are some stores whose staffing level is down below 70 percent because they can't hire replacements," Nixon said. He worries that the hiring freeze alone could force stores to reduce operating hours.

"We cannot speak to percentages of staffing levels right now," said Commissary Agency spokesman Kevin Robinson from headquarters at Fort Lee, Va. "However, the hiring freeze has affected us," he said, noting staff turnover.

"The most significant effect has been our inability to hire store-level positions . to ensure that product is on the shelf and that cashiers are in place to check out customers," Robinson said. "So we are working hard to maximize flexibility of our workforce by rescheduling employees and shifting them around . to serve our customers during peak shopping periods."

Commissaries also would be impacted by any Defense-wide civilian employee furloughs.

In March, after Congress finally passed a defense appropriations bill for this fiscal year, a tentative plan to furlough most Defense employees for 21 days was cut to 14 through September. Since then, Defense Secretary Chuck Hagel has said plans are being reconsidered.

There is hope Congress will grant enough relief from the across-the-board cut formula of sequestration that Defense employee furloughs can be avoided through a mid-year budget reprogramming request, now working.

If that doesn't happen, commissaries will be closed an extra day per week during the furlough period. So if employees are to be furloughed 14 days, stateside commissaries would be closed an added day for 14 weeks.

"We are cautiously optimistic that they will find a solution to the furlough issue and that won't happen," Nixon said. "But that's our major concern right now - furloughs and the hiring freeze."

For fiscal year 2014, the Obama administration has proposed full funding for commissaries, which signals strong support for the benefit, Nixon said. But the defense budget request doesn't reflect $52 billion in cuts from sequestration which will take effect in 2014 if, as expected, Republicans and Democrats continue to refuse to negotiate a significant debt?reduction deal.

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To comment, write Military Update, P.O. Box 231111, Centreville, VA, or email milupdate@aol.com or twitter: Tom Philpott @Military_Update

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