White-collar federal workers in high-cost cities such as San Francisco and Washington could get bigger raises than expected in January if President Clinton earmarks part of the pending 4.8 percent "average" increase for locality adjustments.
If 1 percentage point of the average raise was set aside for locality pay, Washington-Baltimore federal workers would get a total raise of 4.94 percent. Those in San Francisco would get 5.59 percent. Federal employees in New York would get 5.25 percent. Those in Houston would get 5.52 percent.
Under the same formula, federal workers in Norfolk would get 4.69 percent; in Orlando and Pittsburgh, 4.7 percent; in Dayton, Ohio, 4.73 percent; and in Richmond, 4.76 percent.
A 4.8 percent raise also has been approved for military personnel, but the military raise is across the board. The actual raise for white-collar civilians depends on the locality pay breakdown.
Until the locality pay issue is settled--the decision is up to the president--civilian white-collar feds don't know whether they will get more or less than the average 4.8 percent.
Once the issue is settled--perhaps within a couple of weeks--an official pay table will be authorized and will be printed in the Federal Diary.
Federal pay, once standardized for almost every grade and job, now varies from city to city. The Bush administration first authorized an 8 percent pay differential for New York, San Francisco and Los Angeles. It said the higher pay was needed to meet competition with private-sector employers.
The bipartisan 1990 federal pay law--designed to close the "pay gap" between Uncle Sam and the private sector--authorized a dual pay raise each January. The "average" amount was supposed to reflect changes in national pay rates, with part of the average raise set aside for locality adjustments to take into account local private-sector pay practices.
Federal workers in high-cost, high-pay cities generally benefit when a larger portion of the overall raise is designated for locality adjustments.
Originally, the White House proposed a 4.4 percent average raise. But Sen. John W. Warner (R-Va.), chairman of the Armed Services Committee, pushed for a 4.8 percent raise for military personnel. Rep. Steny H. Hoyer (D-Md.) led a fight in the House to give federal civilian workers a 4.8 percent average raise. And Sen. Ted Stevens (R-Alaska), chairman of the Appropriations Committee, endorsed the idea of a 4.8 percent raise for both groups. That's how civilian federal workers wound up with a bigger raise.
The difference in the two amounts is significant. Higher pay means that workers can contribute more to the federal 401(k) plan. The value of life insurance policies increases, as does the value of unused annual leave, which workers can cash in when they retire. Most importantly, pay (together with length of service) determines the size of retired federal workers' lifetime annuities. More, even a little bit more, is a lot better.
According to data compiled by Hoyer's office, in 1995, white-collar feds got a 2.6 percent average raise, with 2 percentage points for an across-the-board raise and 0.6 percentage point for locality raises.
In 1996, the average raise was 2.4 percent, with 0.4 percentage point designated for locality pay. In 1997, 0.7 percentage point of a 3 percent average raise went to locality pay. In 1998, 0.5 percentage point of a 2.8 percent average raise went to locality pay. This year, 0.5 percentage point of a 3.6 percent average raise went to locality pay.
Two key points to remember:
* The 4.8 percent raise, as often stated here, is an "average," and actual raises will vary from city to city.
* Because the locality issue hasn't been decided, pay tables are not available and have not been printed in the Federal Diary or anywhere else.
Many readers have asked about pay tables. When they are ready, you will be the first to know.
Congress and the White House both want to offer long-term care health insurance to federal civilian workers and military personnel, their family members and retirees. But it could be 18 months to two years before a program is approved, set up and offered to employees and retirees.
At 9 a.m. tomorrow on WUST radio (1120 AM), insurance expert Arthur Stein will discuss insurance options for federal workers and military personnel, the differences between long-term care and long-term disability insurance and who should buy--and who should avoid--getting a "gap" policy until Uncle Sam's long-term care insurance program begins.
Mike Causey's e-mail address is email@example.com