Panel sets 2003 locality pay rates

Federal employees would receive pay increases ranging from 4.02 percent to 4.87 percent in January under recommendations that will be submitted to the Bush administration and most likely adopted.

The proposed raises, endorsed by the Federal Salary Council at a meeting Tuesday, would include a 3.1 percent across-the-board increase plus locality-based raises ranging from an additional 0.92 percent to 1.71 percent.

President Bush could ultimately reject the proposed raises, but recent history suggests that the council's recommendations will take effect in January. As part of the 2003 Treasury-Postal appropriations bill, Congress is likely to approve a 4.1 percent average pay increase for federal workers. Following a formula in federal law, Bush is then likely to set the 3.1 percent across-the-board increase and then follow the council's recommendations for the locality raises.

Federal workers in 31 metropolitan areas, ranging from Atlanta and Washington to Huntsville, Ala., get special locality pay, based on the cost of labor in each city. Outside the 31 areas, federal workers in the 48 contiguous states are covered by the "Rest of the U.S." locality pay category.

The Federal Salary Council, a commission of government representatives and federal employee union leaders, oversees locality pay. It also recommends pay raises based on formulas set in the 1990 Federal Employees Pay Comparability Act and in Office of Personnel Management regulations.

The council's endorsed 2003 raises reflect the fact that the government has largely ignored the formula for locality pay set out in the 1990 law. Under the formula, the government was supposed to close an estimated 30 percent gap between private sector and federal pay to 5 percent. The pay gap is down to about 19 percent, a council report issued Tuesday said. Getting the gap down to 5 percent would require double-digit raises.

Critics of the locality pay system say it doesn't accurately portray pay differences among occupations. Standard locality rates mask the widely varying salaries that different types of professional employees can demand. Critics have also questioned the methodology used to estimate the pay gap.

Next year, the salary council, headed by new Chairman Sam Wallace, plans a top-to-bottom review of the locality pay system. The council will review the structure of the system, the number of locality pay areas, the precision of pay gap measurements and the salary surveys used to estimate locality pay differences.

Federal Salary Council Recommended
2003 Percentage Pay Raises, By Locality

Atlanta 4.14%
Boston 4.40%
Chicago 4.51%
Cincinnati 4.34%
Cleveland 4.19%
Columbus 4.11%
Dallas/Ft. Worth 4.22%
Dayton, Ohio 4.09%
Denver 4.40%
Detroit 4.50%
Hartford 4.41%
Houston 4.77%
Huntsville, Ala. 4.03%
Indianapolis 4.03%
Kansas City 4.02%
Los Angeles 4.57%
Miami 4.35%
Milwaukee 4.18%
Minneapolis/St. Paul 4.28%
New York 4.53%
Orlando 4.03%
Philadelphia 4.31%
Pittsburgh 4.04%
Portland 4.33%
Richmond 4.12%
Sacramento 4.30%
St. Louis 4.06%
San Diego 4.35%
San Francisco 4.87%
Seattle 4.34%
Washington, D.C. 4.27%

Rest of U.S. 4.03%