Cape Codders lose locality pay battle

The Bush administration has rejected a recommendation to boost the salaries of federal workers in Cape Cod, Mass.

Federal workers in Barnstable County, where Cape Cod is located, would have taken home thousands more dollars per year beginning in January 2004 if the Bush administration had approved a Sept. 30 recommendation from the Federal Salary Council. The council, a body of government officials and federal union leaders, proposed increasing Cape Codders' salaries to the salary level of federal workers in Boston. If the change were in place today, a worker who makes $24,284 would have made $25,386 this year. A manager who makes $89,715 would have made $93,786.

But the council's proposal was rejected this month by Office of Personnel Management Director Kay Coles James, Office of Management and Budget Director Mitch Daniels and Labor Secretary Elaine Chao.

"Our review of available data on turnover, accessions, the use of special salary rates and other pertinent information does not indicate that federal agencies in Barnstable County are experiencing serious staffing problems," the officials said in a memorandum to President Bush. The three officials serve as the president's "pay agent," recommending pay rates for federal workers each year.

The officials said 2 percent of federal employees in Barnstable County quit their jobs in fiscal 2001, below the national average of 2.1 percent. The officials also didn't think the county is losing too many people to federal agencies in Boston (1.5 percent per year).

"We encourage federal agencies with installations in Barnstable County to make strategic use of existing pay flexibilities to address any recruitment or retention problems that may exist for specific groups of employees," the memo from the three administration officials said.

Each year, federal officials from across the country petition the Federal Salary Council for higher salaries in their areas. The council considers the petitions and then makes recommendations to the pay agent. The pay agent then recommends a course of action to the president, who has never rejected the pay agent's recommendations.

Though officials from dozens of counties seek higher salaries each year, only seven areas have been granted higher salary rates since 1994. Barnstable County was the first county in several years approved for higher salaries by the Federal Salary Council. Federal officials in Cape Cod argued that their county is the only one on the eastern seaboard from Maine to Delaware in which federal workers do not get special pay boosts each year based on the costs of local labor. That argument won the day with Federal Salary Council members at a Sept. 30 meeting.

But now that the pay agent has overruled the council, officials from Barnstable County would have to petition for higher salaries again next year. If they are successful next year, then higher salary rates would not take effect until January 2005.

According to Office of Personnel Management statistics for June 2002, 1,100 federal workers are employed in Barnstable County, 820 of whom are permanent full-time employees.