President Bush changes locality pay formula
President Bush decided on Thursday to use a new formula to determine locality pay for federal employees in 2007, giving a greater portion to employees in cities such as New York and San Francisco.
The new formula takes into consideration the increasing pay gaps between the private and public sectors in some cities, such as New York, compared to others. But switching formulas means that many cities and the "Rest of U.S." category will get a slightly smaller locality boost.
The final locality number will depend on whether lawmakers allocate a 2.7 percent or a 2.2 percent total pay increase for civilians next year. Congress may not make its decision until well into 2007, forcing retroactive pay raises for federal employees.
The president's decision Thursday assumed a 2.2 percent raise.
Lawmakers approved a 2.7 percent raise in draft legislation for civilians, but passed a 2.2 percent raise for the military. Historically, lawmakers have brought the civilian raise in line with the military's and it is unlikely, especially during a time of war, that lawmakers would grant civilians more than soldiers.
Assuming the total pay raise is 2.2 percent, and the portion devoted to locality raises is 0.5 percent, employees in the New York region would get a 3.03 percent total pay raise under the new formula. New Yorkers would have received a 2.63 percent raise under the old formula. San Francisco area employees would be in line for a 3 percent raise, rather than 2.71 percent. Washington workers would receive a 2.64 percent raise, as opposed to 2.4 percent.
The "Rest of U.S." area is slated to get a 1.81 percent raise under the new formula, which is smaller than the 2.03 percent it would have received.
In October, the Federal Salary Council, an independent body of salary experts, employee representatives and federal officials that usually makes recommendations on the allocation of locality pay, chose to leave it up to the president.
Once Congress votes on the final pay raise amount, Bush will still have to sign an executive order with the 2007 pay raise.
COMMENTS
- I have worked for the Federal Gov't for 22 years and this actually makes my blood boil. I am in Georgia and our expenses are getting out of control--granted SF and NY are bigger but pleazzzzzzeeeeeeee we need to keep up with this ecomony!! Pattie Pitts Posted October 4, 2007 6:50 AM
- Two years ago, the locality pay for our GS counterparts was changed from "Rest of US" to NYC, and only for the GS employees. This was under the basis that more GS's were coming from the NYC area which justified our GS personnel a minimum of a 10 percent pay increase, while the WG's received 3.1 percent. They say locality pay is based on where you live but that's difficult to understand when you receive a 3.1 percent increase and the guy who lives next door to you receives a 13 percent increase. Kevin Posted December 26, 2006 3:12 PM
- This is such a load. First of all locality pay is joke. I live in West Central Florida, the Tampa Bay area to be exact. Tampa is grouped in "Rest of US" but yet places like Detroit get higher locality. I grew up in South Eastern Michigan. My $225,000 house in this area (out in the "country" because I can't actually afford a decent house near the base) is a $120,000 house in Michigan. How is this correct? The cost of living in Tampa kills Detroit, but yet they get almost double the locality pay. Daniel Posted December 7, 2006 8:11 AM
