Salary council releases locality pay recommendations

The average locality pay increase in 2006 will be 1.21 percent if recommendations made Monday by the Federal Salary Council, an independent body of salary experts, employee representatives and federal officials, are approved.

The council endorsed a 2.1 percent across-the-board pay raise coupled with the locality increase, which varies by city. The most expensive area--San Francisco--would receive a 2.29 percent locality increase to supplement the general raise.

These recommendations depend on Congress and the president approving a 3.1 percent total pay raise. The House already passed a bill with that figure, and the Senate is preparing to vote on a 3.1 percent raise. President Bush, however, has proposed an overall increase of 2.3 percent.

While 31 cities are set to receive more locality pay under the council's recommendations, the rest of the country is lumped into a single "Rest of U.S." category and will get a 0.8 percent locality increase.

The council removed three cities from "Rest of U.S." status, recommending individual locality pay rates for them, and bumped three other cities in the opposite direction. Raleigh, N.C., Buffalo, N.Y., and Phoenix will receive higher increases, while the Kansas City metropolitan area, St. Louis and Orlando, Fla., would get a 0.8 percent increase, along with the rest of the country.

Raleigh is set to receive a 1.15 percent hike, Buffalo 1.0 percent and Phoenix 0.93 percent.

Additionally, the council supported a proposal to include 15,000 federal employees currently in the rest of U.S. RUS category in higher locality pay areas starting in January. These employees live in areas adjacent to cities that already have separate locality pay.

The council rejected a proposal to split the Los Angeles locality pay area in two, with one for coastal regions and another for inland areas. Proponents of the split said inland labor is less expensive, which causes recruitment and retention problems for higher-cost areas such as Ventura and Orange counties.

Cities with high locality increases include: Hartford, Conn., with 1.78 percent; New York, with 1.98 percent; and Houston, with 1.6 percent. Indianapolis fell at the low end with a recommended increase of 0.84 percent--slightly above the rest of U.S. standard.

The council's recommendations will go to the President's Pay Agent, a board made up of the heads of the Office of Personnel Management, Office of Management, and Budget and Labor Department. Board members will consider the council's stance and submit their recommendation to President Bush by Nov. 30.