OPM announces new cost-of-living data for Pacific region employees

Federal employees living in the country's Pacific region are likely to receive a smaller cost-of-living allowance in 2009 based on the results of a report released Dec. 9 by the Office of Personnel Management.

Since 2004 the cost of living for employees in the Pacific region, which includes Hawaii, has fallen relative to that of Washington, D.C., the report concluded.

OPM's cost-of-living survey uses prices in Washington as an index and assigns the location a value of 100. The relative cost of living in the various counties is expressed by a deviation from 100. In the 2007 survey, Hawaii's Honolulu County's cost-of-living index score was 121.37, down from 125.80 in the 2004 survey. Hawaii County scored 111.71 last year, compared to 117.25 in 2004. Kauai County's score fell from 127.63 four years ago to 118.14 in 2007, while Maui County scored 123.62 in 2007, and 131.50 in 2004. Guam and the Northern Mariana Islands scored 119.98 in 2007 compared to 127.40 in 2004.

Currently, COLAs in the Pacific region range from 17 percent to 25 percent. OPM has not yet announced new rates to reflect the survey's findings.

OPM estimated from its price canvass that the average annual expenditure for a middle-income family in Washington totaled $57,910.67. That figure includes an estimated $6,516 spent on food, $22,057.19 for housing and utilities, and $2,183.43 for clothing and clothing-related services, among other expenses. The report did not provide a comparable itemization for Hawaii families.

The survey, conducted in the District of Columbia, Guam, and Honolulu, Hawaii, Kauai, and Maui counties in 2007, examines the cost of a range of consumer goods and services, chosen with the help of COLA advisory committees in each area. The committees include two OPM representatives and 12 rank-and-file employees and managers from other agencies. OPM does not use an advisory committee in Washington because its own employees are familiar with local goods and services.

"We found the work of the CACs to be extremely helpful and informative," said the report, published on Tuesday in the Federal Register.

The report noted that it was difficult in some instances to find exactly equivalent products, particularly in health care, because the same plans are not offered in Hawaii, Guam and Washington. In cases where exact equivalence is not possible, OPM uses a formula to calculate more broadly what federal employees in each locale pay for health care.

The COLA system has come under criticism from some legislators, because while payments are not taxed, they also are not considered part of basic pay eligible for Thrift Savings Plan matching funds and they do not count toward federal retirement benefits. In October, the Senate passed a bill that would move Alaska and Hawaii, currently covered by COLAs, into the locality pay system.