The number of U.S.-based service members who receive pay stipends to compensate them for being assigned to high cost-of-living areas will fall by more than 46 percent in 2019, according to data the Pentagon released Thursday.
The changes come amid new calculations to set the annual cost of living adjustments (COLAs) for high-cost locations in the continental U.S. The list of locales eligible for COLA will drop precipitously after the new year, from 59 to just 20.
As a result, the department said the number of military members who receive the supplements to their basic pay would fall from roughly 28,000 to 15,000. And the total amount the department spends on COLA adjustments will drop to $22.1 million, about $6 million less than this year.
To decide the COLA locations each year, DoD hires a contractor to gather market-by-market statistics on how expensive it is to live in a particular locality, taking into account transportation, goods and services, federal income taxes, and “miscellaneous expenses” — but not housing costs, since those are already accounted for in members’ basic allowance for housing. If a location’s cost of living is deemed to be at least 8 percent more expensive than the nationwide average, it’s eligible for at least some COLA adjustment.
In 2019, the biggest adjustment will go to military members assigned to New York City. The calculations set an 8 percent COLA for Staten Island, followed by a 6 percent adjustment for what DoD defines as the rest of the New York City Military Housing Area.
The next highest payments will go to the relative handful of troops living in the San Francisco Bay Area. Members with a duty station in the San Francisco Military Housing Area will receive a 6 percent bump, followed by 5 percent for Oakland and Santa Clara County, the home of much of Silicon Valley.
The biggest drop is Atlantic City. In 2018, that area was eligible for a 7 percent COLA but will fall to 1 percent next year.
And DoD completely removed seven Military Housing Areas from its COLA-eligible list for 2019 based on the latest survey data. Those include:
Los Angeles, Marin and Sonoma counties in California
Indian Head Naval Ordnance Station, Maryland
Port Angeles, Whidbey Island and Yakima, Washington
The 2018 calculations also included COLA adjustments for 38 separate counties that aren’t formally designated as Military Housing Areas. But those are being pared back to just four counties in 2019.