Forecasting USMC Basic Allowance for Housing Utilizing Historical Dependency Rates

The Department of Defense (DoD) consists of more than 1.3 million service members, with nearly 700,000 dependents. Service members with dependents incur higher costs to the DoD, relative to those without. The DoD should focus on accurately forecasting Basic Allowance for Housing (BAH) expenses utilizing historical dependency rates to closer align budget and execution. Currently, the Marine Corps budgets for BAH based on the previous year's execution instead of using dependency rates to forecast. During Fiscal Years 2017-2019 (FY17-19), the Marine Corps has averaged more than $100 million in under execution for BAH with dependents. This antiquated method reduces leadership's flexibility to align funding to other programs early in the PPBE process. Secondarily, a benefit of the All-Volunteer-Force (AVF) is that service members are a reflection of society. Monitoring dependency rates and comparing them to societal trends allows the DoD to shape family-friendly policy. Societal trends show that civilians are increasing in age, education, and professionalism before gaining dependents. The military is experiencing the same trend. The Marine Corps has the data available to forecast dependency rates and create more accurate BAH budgets that reduce annual under execution. The refined process could provide leadership with the flexibility of $50-100 million in the first year. There are no concerning anomalies between military and civilian dependency rates.