2.02% Pay Raise Expected for 2017

Earlier in the year the President announced a 1.0% across-the-board pay raise for federal General Schedule (GS) employees. Now, under different authority, the President transmitted to Congress his plan to provide an additional 0.6% average locality pay increase for federal GS employees.

In the Washington-Baltimore area, this means GS employees will receive a 2.02% pay raise after January 1, 2017.

According to the Office of Personnel Management, the GS base pay schedule is usually adjusted annually each January with an across-the-board pay increase based on nationwide changes in the cost of wages and salaries of private industry workers. Most GS employees are also entitled to locality pay, which is a geographic-based percentage rate that reflects pay levels for non-Federal workers in certain geographic areas as determined by surveys conducted by the U.S. Bureau of Labor Statistics. There are currently 47 locality pay areas, which cover the lower 48 States and Washington, DC, plus Alaska, Hawaii, and the U.S. territories and possessions.

There's been a Washington-Baltimore cost of living increase of 0.8% over the past 12 months, according to a Bureau of Labor Statistics report. While a 1.6% or 2.02% increase might sound good in light of this report, when one considers a report from Long and Foster that in the past 12 months home prices increased 5%, it begins to seem inadequate. Long and Foster report that the median home sale price increased from $515,000 to $543,000, an increase of $28,000 over the past year.

Keep in mind that Congress has not finished its work on the various fiscal year (FY) 2017 appropriations bills needed to fund federal agencies for the remainder of the current fiscal year. It is still possible that Congress could act between now and the end of the calendar year to set differing pay amounts (including even blocking a pay raise entirely) for either or both the across-the-board raise or for locality pay. If Congress continues to stay silent on a pay raise, however, the President’s plan for the 1.6% average raise, and the 2.02% DC-specific raise, will become law.