Obama’s 2.1 Percent Pay Raise Announcement Boosts Locality Pay

President Obama’s surprise move last week to give civilian federal employees a 2.1 percent pay raise for 2017 means an increase in locality pay.

The announcement, a combination of a 1 percent across-the-board pay bump combined with a 1.1 percent boost in locality pay, goes into effect in January 2017 unless Congress takes action to stop it.

In late November, Obama said he was moving forward with his recommended 1.6 percent pay raise for feds in 2017 – a 1 percent base increased and a 0.6 percent locality pay bump. But on Dec. 8, the administration unveiled its new 2.1 percent recommendation in light of Congress’ decision to give troops a 2.1 percent increase in 2017 “and reconsideration of current and projected economic conditions,” the president said in a message announcing the decision.

» Get the best federal news and ideas delivered right to your inbox. Sign up here.

The largest locality pay increases remain concentrated in major American cities, with the biggest boosts for California’s Bay area, the Washington-Baltimore-Arlington area (which also includes parts of Pennsylvania and West Virginia), and the New York-Newark, N.J. area (which includes parts of Connecticut and Pennsylvania). The locality pay rate in 2017 for San Jose-San Francisco-Oakland, Calif., is 38.17 percent; for the D.C. area it is 27.10 percent; and for the NYC metro area it is 31.22 percent. General Schedule employees’ base pay is adjusted upward either by their specific locality’s percentage, or by the “rest of United States” designation. The “rest of U.S.” rate for 2017 is 15.06 percent.

Click here for the full list of 2017 locality pay rates. To compare, here is the list of locality pay rates in 2016.

The statutory formula for determining locality pay, which presidents historically ignore in favor of their own rates, would have boosted the adjustments by an average of 28.49 percent at a cost of $26 billion, and “federal agency budgets cannot sustain such increases,” Obama wrote in a letter accompanying the 2017 locality pay rates.

“Civilian federal employees made significant sacrifices as a result of the three-year pay freeze that ended in January 2014,” wrote Obama in the Dec. 8 letter to Congress. “Since the pay freeze ended, annual adjustments for civilian federal employees have also been lower than private sector pay increases and statutory formulas for adjustments to the General Schedule for 2014 through 2016. However, keeping our nation on a sustainable fiscal course requires tough choices.”

Locality pay rates for federal employees were frozen between 2010 and 2015.

Stay up-to-date with federal news alerts and analysis — Sign up for GovExec's email newsletters.
FROM OUR SPONSORS
JOIN THE DISCUSSION
Close [ x ] More from GovExec
 
 

Thank you for subscribing to newsletters from GovExec.com.
We think these reports might interest you:

  • Going Agile:Revolutionizing Federal Digital Services Delivery

    Here’s one indication that times have changed: Harriet Tubman is going to be the next face of the twenty dollar bill. Another sign of change? The way in which the federal government arrived at that decision.

    Download
  • Cyber Risk Report: Cybercrime Trends from 2016

    In our first half 2016 cyber trends report, SurfWatch Labs threat intelligence analysts noted one key theme – the interconnected nature of cybercrime – and the second half of the year saw organizations continuing to struggle with that reality. The number of potential cyber threats, the pool of already compromised information, and the ease of finding increasingly sophisticated cybercriminal tools continued to snowball throughout the year.

    Download
  • Featured Content from RSA Conference: Dissed by NIST

    Learn more about the latest draft of the U.S. National Institute of Standards and Technology guidance document on authentication and lifecycle management.

    Download
  • GBC Issue Brief: The Future of 9-1-1

    A Look Into the Next Generation of Emergency Services

    Download
  • GBC Survey Report: Securing the Perimeters

    A candid survey on cybersecurity in state and local governments

    Download
  • The New IP: Moving Government Agencies Toward the Network of The Future

    Federal IT managers are looking to modernize legacy network infrastructures that are taxed by growing demands from mobile devices, video, vast amounts of data, and more. This issue brief discusses the federal government network landscape, as well as market, financial force drivers for network modernization.

    Download
  • eBook: State & Local Cybersecurity

    CenturyLink is committed to helping state and local governments meet their cybersecurity challenges. Towards that end, CenturyLink commissioned a study from the Government Business Council that looked at the perceptions, attitudes and experiences of state and local leaders around the cybersecurity issue. The results were surprising in a number of ways. Learn more about their findings and the ways in which state and local governments can combat cybersecurity threats with this eBook.

    Download

When you download a report, your information may be shared with the underwriters of that document.