Washingtonians aren't the only people suffering because of high prices here.
The rising cost of beans, cars, housing and utilities here is cutting millions of dollars from special, tax-free cost-of-living (COL) payments to 35,000 U.S. civil servants in Alaska, Puerto Rico, Hawaii, Guam, and the Virgin Islands.
By law, civil servants in those areas are entitled to special, tax-free COL payments, representing the difference between living costs where they are and Washington. As prices here have skyrocketed, the government has been cutting those COL payments elsewhere.
This Sunday thousands of federal and postal workers in Alaska will lose part of the 25 percent, tax-free COL payments they have been getting.
Feds in Fairbanks will keep their 25 percent allowance -- for now. But those in Anchorage will drop to 20 percent. And the tax-free COL allowance for Juneau will drop to 22.5 percent.
In December, U.S. civil servants and postal aides in Puerto Rico lost their 7.5 percent differential, for a new tax-free COL payment equal to 5 percent of salary.
Federal workers in Hawaii (Oahu) dropped from a 15 percent to a 12.5 percent COL differential last August. Those in Guam lost 2.5 percent, for a new COL payment of 7.5 percent. Allowances for the Virgin Islands are 7.5 percent in St. Thomas, and 5 percent in St. Croix.
Washington is considered the "base" mainland city for computing COL benefits for U.S. "non-foreign" areas. And as living costs here have climbed faster than in Alaska, Hawaii, Guam and Puerto Rico, the tax-free COL payments for all of those areas have dropped.
Ironically, Uncle Sam is still considered a poor payer in many of the areas, especially in Alaska. A federal telephone operator in Fairbanks, for example, gets about half the salary (even with a COL differential) of a nonfederal telephone operator now earning $21,000. But the government still has people standing in line for jobs because of high unemployment in many areas of Alaska.
Carter administration officials want Congress to scrap the COL system as part of an overall "reform" of the federal pay system. Their plan -- Congress willing -- is to compare pay and fringes of government to industry and peg local U.S. salaries to local rates.
Under pay reform, workers' pay would be linked to wages -- but not necessarily living costs -- paid in hometown industries. Federal officials concede that the Alaskans, Hawaiians and Puerto Ricans would lose their tax-free COL payments under the system, but believe their wages would be adjusted upward dramatically to match local industry rates. Feds in those areas will believe it when they see it. Meantime -- thanks to high costs at the local Giant, Safeway and on the real estate market here -- all of them are taking cuts in their tax-free living cost allowances.