Federal Pay: FY2003 Salary Adjustments

Federal white-collar employees are to receive an annual pay adjustment and a locality-based comparability payment, effective in January of each year, under Section 529 of P.L. 101-509 , the Federal Employees Pay Comparability Act (FEPCA) of 1990. In January 2003, they received a 3.1% annual pay adjustment under Executive Order 13282 issued by President Bush on December 31, 2002 and a locality-based comparability payment, averaging about 1.0% of the General Schedule payroll, under Executive Order 13291 issued by the President on March 21, 2003. The locality pay adjustment is retroactive to January 2003. (The December 31, 2002 executive order had frozen the locality-based comparability payments at the levels authorized for January 2002.) The cost of the combined pay adjustments is about $3.8 billion dollars. Although the federal pay adjustments are sometimes referred to as cost-of-living adjustments, neither the annual adjustment nor the locality payment is based on measures of the cost of living. The annual pay adjustment is based on the Employment Cost Index (ECI), which measures change in private-sector wages and salaries. The index showed that the annual across-the-board increase would be 3.1% in January 2003. The size of the locality payment is determined by the President, and is based on a comparison of non-federal and General Schedule (GS) salaries in 32 pay areas nationwide. By law, the disparity between non-federal and federal salaries was to be gradually reduced to 5% over the years 1994 through 2002; FEPCA requires that amounts payable may not be less than the full amount necessary to reduce the pay disparity to 5% in January 2003. The Federal Salary Council and the Pay Agent recommend that the 2003 locality payments range from 22.41% in the "Rest of the United States" (RUS) pay area to 46.79% in the San Francisco pay area. The payment recommended for the Washington, DC, pay area was 28.93%. Because the new locality rate replaces the existing locality rate, the change in locality rates is derived by comparing 2002 locality payments with those recommended for 2003. This comparison resulted in recommended increases in locality rates from 2002 to 2003 ranging from 16.17% in the RUS pay area to 27.13% in the San Francisco pay area, with a rise of 19.24% in the Washington, DC, pay area. The nationwide average net pay increase, if the ECI and locality-based comparability payments were granted as stipulated in FEPCA, would have been 18.56%. President George Bush's FY2003 budget proposed a 2.6% federal civilian pay adjustment. FEPCA has never been implemented as originally enacted. Since 1995, locality payments have been much lower than FEPCA requires.

Order Code RL31291
Report for Congress
Received through the CRS Web
Federal Pay: FY2003 Salary Adjustments
Updated March 25, 2003
name redacted
Analyst in American National Government
Government and Finance Division
Congressional Research Service ˜ The Library of Congress

Federal Pay: FY2003 Salary Adjustments
Summary
Federal white-collar employees are to receive an annual pay adjustment and a
locality-based comparability payment, effective in January of each year, under
Section 529 of P.L. 101-509, the Federal Employees Pay Comparability Act
(FEPCA) of 1990. In January 2003, they received a 3.1% annual pay adjustment
under Executive Order 13282 issued by President Bush on December 31, 2002 and
a locality-based comparability payment, averaging about 1.0% of the General
Schedule payroll, under Executive Order 13291 issued by the President on March 21,
2003. The locality pay adjustment is retroactive to January 2003. (The December
31, 2002 executive order had frozen the locality-based comparability payments at the
levels authorized for January 2002.) The cost of the combined pay adjustments is
about $3.8 billion dollars. Although the federal pay adjustments are sometimes
referred to as cost-of-living adjustments, neither the annual adjustment nor the
locality payment is based on measures of the cost of living.
The annual pay adjustment is based on the Employment Cost Index (ECI),
which measures change in private-sector wages and salaries. The index showed that
the annual across-the-board increase would be 3.1% in January 2003. The size of the
locality payment is determined by the President, and is based on a comparison of
non-federal and General Schedule (GS) salaries in 32 pay areas nationwide. By law,
the disparity between non-federal and federal salaries was to be gradually reduced to
5% over the years 1994 through 2002; FEPCA requires that amounts payable may not
be less than the full amount necessary to reduce the pay disparity to 5% in January
2003. The Federal Salary Council and the Pay Agent recommend that the 2003
locality payments range from 22.41% in the “Rest of the United States” (RUS) pay
area to 46.79% in the San Francisco pay area. The payment recommended for the
Washington, DC, pay area was 28.93%. Because the new locality rate replaces the
existing locality rate, the change in locality rates is derived by comparing 2002
locality payments with those recommended for 2003. This comparison resulted in
recommended increases in locality rates from 2002 to 2003 ranging from 16.17% in
the RUS pay area to 27.13% in the San Francisco pay area, with a rise of 19.24% in
the Washington, DC, pay area. The nationwide average net pay increase, if the ECI
and locality-based comparability payments were granted as stipulated in FEPCA,
would have been 18.56%. President George Bush’s FY2003 budget proposed a 2.6%
federal civilian pay adjustment.
FEPCA has never been implemented as originally enacted. Since 1995, locality
payments have been much lower than FEPCA requires.

Contents
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2003 Pay Adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Annual Pay Adjustment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Locality-Based Comparability Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Bureau of Labor Statistics (BLS) Surveys . . . . . . . . . . . . . . . . . . . . . . . 4
Report of the Federal Salary Council . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Pay Agent Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Federal Salary Council Recommended Pay Adjustments If the
Increase is 4.1% in January 2003 . . . . . . . . . . . . . . . . . . . . . . . . . 10
The President’s Recommendation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Congressional Actions and Considerations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Concurrent Budget Resolutions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Treasury, Postal Service, and General Government Appropriations Bill,
2003 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Employee Views . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
List of Tables
Table 1. January 2003 Recommended Locality Payments, Authorized
Locality Payments, and Net Annual and Locality Pay Increases . . . . . . . . . 17

Federal Pay: FY2003 Salary Adjustments
Introduction
In January 2003, federal white-collar employees received a 3.1% annual pay
adjustment under Executive Order 13282 issued by President Bush on December 31,
2002 and a locality-based comparability payment, averaging about 1.0% of the
General Schedule payroll, under Executive Order 13291 issued by the President on
March 21, 2003. (The December 31, 2002 executive order had frozen the locality-
based comparability payments at the levels authorized for January 2002.) The
locality pay adjustment is retroactive to January 2003. On February 13, 2003, the
Senate and the House of Representatives had agreed to the conference report for
H.J.Res. 2, making further continuing appropriations for the fiscal year 2003.
Section 637 of H.J. Res. 2 provided for a 4.1% pay adjustment effective as of the first
applicable pay period beginning on or after January 1, 2003. President Bush signed
H.J. Res. 2 on February 20, 2003 and it became P.L. 108-7. On March 21, 2003, the
President issued Executive Order 13291 which allocated the additional 1.0% as
locality pay. According to OPM, the cost of the combined 4.1% pay adjustment is
about $3.8 billion dollars. OPM issued new salary tables for 2003 to implement the
executive order and these are available on the Internet at [http://www.opm.gov].
Table 1 shows the recommended locality payments, the authorized locality
payments, and the net annual and locality pay increases.
Federal white-collar employees are to receive an annual pay adjustment and a
locality-based comparability payment, effective in January of each year, under
Section 529 of P.L. 101-509, the Federal Employees Pay Comparability Act
(FEPCA) of 1990.1 Although the federal pay adjustments are sometimes referred to
as cost-of-living adjustments, neither the annual adjustment nor the locality payment
is based on measures of the cost of living. FEPCA has never been implemented as
originally enacted. The annual pay adjustment was not made in 1994, and in 1995,
1996, and 1998, reduced amounts of the annual adjustment were provided. For 1995
through 2003, reduced amounts of the locality payments were provided. Federal
white-collar employees received a combined annual and locality pay adjustment of
4.6% in January 2002.2 The nationwide average net pay increase in January 2002,
if the Employment Cost Index (ECI) and locality-based comparability payments had
been granted as specified by FEPCA, would have been 18.84%. As stated above, in
January 2003, federal white-collar employees received a combined annual and
locality pay adjustment of 4.1%. The nationwide average net pay increase in January
1104 Stat. 1427.
2For the 2002 salary adjustments, see CRS Report RL30744, Federal Pay: FY2002 Salary
Adjustments
, by (name redacted).

CRS-2
2003, if the Employment Cost Index (ECI) and locality-based comparability
payments had been granted as specified by FEPCA, would have been 18.56%.
This report discusses the January 2003 annual adjustment and locality payments.
It does not cover salary adjustments for federal officials, federal judges, or Members
of Congress.3
2003 Pay Adjustments
Annual Pay Adjustment
Federal employees under the General Schedule (GS), Foreign Service Schedule,
and Veterans Health Administration Schedule receive an annual pay adjustment. The
President may extend the annual adjustment to the Senior Executive Service, the
Senior Foreign Service, and administrative law judges. Individuals in senior-level
(SL) and scientific and professional (ST) positions may receive the annual adjustment
at the discretion of agency heads.4 Annual adjustments for contract appeals board
members depend on whether Executive Schedule pay is adjusted.
The annual pay adjustment is based on the Employment Cost Index (ECI),
which measures change in private sector wages and salaries. Basic pay rates are to
be increased by an amount that is 0.5 percentage points less than the percentage by
which the ECI, for the quarter ending September 30 of the year before the preceding
calendar year, exceeds the ECI for that same quarter of the second year (if at all).
The ECI shows that the annual across-the-board pay adjustment would be 3.1% in
January 2003, reflecting the September 2000 to September 2001 change in private
sector wages and salaries of 3.6%, minus 0.5%.5 The pay adjustment is effective as
of the first day of the first applicable pay period beginning on or after January 1 of
each calendar year.
FEPCA authorizes the President to issue an alternative plan calling for a
different percentage than the ECI requires in the event of a national emergency or of
serious economic conditions affecting the general welfare. The alternative must be
3See CRS Report 98-53, Salaries of Federal Officials: A Fact Sheet; CRS Report RS20114,
Salary of the President Compared with That of Other Federal Officials; CRS Report
RS20115, Salary of the President: Process for Change; and CRS Report RS20278, Judicial
Salary-Setting Policy
, all by (name redacted). Also see CRS Report 97-615, Salaries of
Members of Congress: Congressional Votes, 1990-2003
; CRS Report 97-1011, Salaries of
Members of Congress: Payable Rates and Effective Dates, 1789-2003
; CRS Report
RL30014, Salaries of Members of Congress: Current Procedures and Recent Adjustments;
and CRS Report RL30064, Congressional Salaries and Allowances, all by (name redacted).
45 U.S.C. 5376: The minimum rate of basic pay for SLs and STs is equal to 120% of the
minimum rate of basic pay for GS-15, and the maximum rate of basic pay for SLs and STs
is equal to level IV of the Executive Schedule.
5U.S. Department of Labor, Bureau of Labor Statistics, Employment Cost Index-September
2001
(Washington: Oct. 25, 2001), pp. 2, 12.

CRS-3
submitted to Congress before the September 1 preceding the scheduled effective
date.6 President Bush did not issue an alternative plan.
Locality-Based Comparability Payments
GS employees receive the locality-based comparability payments; the Pay
Agent7 may also extend those payments to employees in other pay systems, including
the Foreign Service, Senior Foreign Service, Senior Executive Service, and
employees in senior-level, scientific and professional, administrative law judge, and
contract appeals board member positions.8 The Pay Agent determines the applicable
pay cap level for certain non-General Schedule employees to whom locality pay is
extended.9 OPM has proposed regulations to clarify and redefine the limitations.10
Blue-collar workers under the Federal Wage System (FWS) receive a prevailing rate
adjustment that is generally capped at the average percentage pay adjustment
received by federal white-collar employees. Special rate employees receive either the
special rate or the locality payment, whichever is higher. Law enforcement officers
receiving special rates under Section 403 of FEPCA receive both special rates and
6104 Stat. 1429-1431; 5 U.S.C. 5301-5303.
7The Pay Agent comprises the Secretary of Labor (Elaine L. Chao), the Director of the
Office of Management and Budget (Mitchell E. Daniels, Jr.), and the Director of the Office
of Personnel Management (Kay Coles James).
8The President, by Executive Order, delegated to the Pay Agent the authority to extend
locality-based comparability payments to certain categories of positions not otherwise
covered. U.S. President (Clinton), “Delegating a Federal Pay Administration Authority,”
Executive Order 12883, Federal Register, vol. 58, no. 229, Dec. 1, 1993, p. 63281.
9The President, by Executive Order, delegated to the Pay Agent the authority to determine
the applicable pay cap level for certain non-General Schedule employees to whom locality
pay is extended. U.S. President (Clinton), “Adjustments of Certain Rates of Pay and
Delegation of a Federal Pay Administration Authority,” Executive Order 13106, Federal
Register
, vol. 63, no. 236, Dec. 9, 1998, p. 68152.
10The proposed regulations state: “To provide consistent treatment between General
Schedule (GS) and non-GS employees receiving locality payments, OPM proposes to
provide that (1) non-GS positions whose maximum scheduled annual rate of pay is less than
or equal to the maximum payable scheduled annual rate of pay for GS-15 will be subject to
a locality pay cap equal to the rate for level IV of the Executive Schedule, and (2) non-GS
positions whose maximum scheduled annual rate of pay exceeds the maximum payable
scheduled annual rate of pay for GS-15, but is not more than the rate for level IV of the
Executive Schedule, will be subject to a locality pay cap equal to the rate for level III of the
Executive Schedule.” U.S. Office of Personnel Management, “Locality-Based
Comparability Payments,” Federal Register, vol. 65, March 24, 2000, pp. 15875-15877.

CRS-4
locality pay.11 Federal employees in Alaska and Hawaii, and outside the continental
United States, receive a cost-of-living (COLA) allowance rather than locality pay.
The locality-based comparability payments procedure was established by
FEPCA. It provides that payments are to be made within each locality determined
to have a non-federal/federal pay disparity greater than 5%. When uniformly applied
to GS employees within a locality, the adjustment is intended to make their pay rates
substantially equal, in the aggregate, to those of non-federal workers for the same
levels of work in the same locality.
FEPCA provides the President with the authority to fix an alternative level of
locality-based comparability payments if, because of national emergency or serious
economic conditions affecting the general welfare, he considers the level that would
otherwise be payable to be inappropriate. At least one month before those
comparability payments would be payable (by November 30, 2002), he would have
to prepare and transmit to Congress a report describing the alternative level of
payments he intended to provide, including the reasons why that alternative level
would be necessary.12 President Bush issued an alternative plan for the locality
payments on November 27, 2002.13
Bureau of Labor Statistics (BLS) Surveys. Under the law, the BLS
conducts surveys that document non-federal rates of pay in each pay area. Currently,
there are 32 pay areas nationwide. Until October 1996, the surveys were conducted
under the Occupational Compensation Survey Program (OCSP), which had been
approved by the Federal Salary Council and the Pay Agent. Since then, the surveys
have been conducted under the National Compensation Survey (NCS) program,
which was not approved for use with the January 2000, January 2001, and January
2002 locality payments and is not being recommended for use in determining January
2003 locality pay. The survey results are submitted to the Office of Personnel
Management (OPM), which serves as the staff to the Federal Salary Council and the
Pay Agent. OPM documents federal rates of pay in each of the pay areas and
11Rep. Peter King introduced H.R. 3794 on Feb. 26, 2002 and it was referred to the House
Committee on Government Reform. Sen. Christopher Dodd introduced S. 2770 on July 22,
2002 and it was referred to the Senate Committee on Governmental Affairs. No further
action occurred on the bills which would have amended the Federal Law Enforcement Pay
Reform Act (FLEPRA) of 1990, Title IV of Section 529 of P.L. 101-509, to provide higher
special pay adjustments for law enforcement officers in the following Consolidated
Metropolitan Statistical Areas: Boston (24.43%), Chicago (25.34%), Cincinnati (21.21%),
Denver (23.08%), Detroit (25.28%), Hartford (23.78%), Houston (31.55%), Los Angeles
(27.19%), Miami (21.79%), Minneapolis (20.21%), New York (26.44%), Philadelphia
(21.14%), Portland (20.90%), Sacramento (20.41%), San Diego (22.28%), San Francisco
(33.06%), Seattle (20.99%), and Washington, DC (20.01%). FLEPRA authorized special
pay adjustments of 16% in Boston, Los Angeles, New York, and San Francisco; 8% in San
Diego; and 4% in Chicago, Philadelphia, and Washington, DC.
12104 Stat. 1429-1436, as amended by 106 Stat. 1355-1356 and 1360; 5 U.S.C. 5301-5302
and 5304-5304a.
13U.S. President (Bush), “Text of a Letter from the President to the Speaker of the House of
Representatives and the President of the Senate,” Nov. 27, 2002.

CRS-5
compares non-federal and GS salaries, by grade, for each pay area. The average
salaries at each grade, both federal and non-federal, are then aggregated and
compared to determine an overall average percentage pay gap for each area. By law,
the disparity between non-federal and federal salaries is to be reduced to 5%.
Therefore, the overall average percentage pay gap for each pay area is adjusted to this
level each year by OPM. This adjusted gap is called the target gap.
FEPCA also stipulates that a certain percentage of the target gap between GS
average salaries and non-federal average salaries in each pay area is to be closed each
year. Twenty percent of the gap was closed in 1994, the first year of locality pay, as
authorized by FEPCA. An additional 10% of the gap was to be closed each year
thereafter, meaning that 30% of the gap was to be closed in 1995, 40% in 1996, 50%
in 1997, 60% in 1998, 70% in 1999, 80% in 2000, and 90% in 2001. In each of these
years, the locality pay increase has been implemented at a much lower percentage,
reducing the gap slowly; 23.5% of the gap was closed in 1995, 25.9% in 1996, 28.3%
in 1997, 29.2% in 1998, 31% in 1999, 33.5% in 2000, 38.1% in 2001, and 42.3% in
2002. These percentages represent the gap as recalculated after each adjustment. By
January 2002, FEPCA specified that amounts payable could not be less than the full
amount necessary to reduce the pay disparity of the target gap to 5%. This
percentage is applied to the target gap in each pay area to determine the locality rates
recommended by the Pay Agent to the President, after receiving advice from the
Federal Salary Council.14
The pay gaps on which the locality payments are based are 22 months old by the
effective date of the adjustment; thus, March 2001 gaps determine the January 2003
locality payments. Due to the fact that the NCS surveys were not approved for use
in determining the January 2000, January 2001, and January 2002 locality payments,
and are not recommended for use in January 2003, the March 2001 gaps were
determined by using the most recent OCSP survey data for each pay area. Since the
BLS had discontinued the OCSP program in October 1996, the pay survey data for
some of the largest pay areas were at least 6 years old. Specifically, the New York
data were as of July 1995; the Washington, DC, data were as of October 1995; and
the Los Angeles data were as of November 1995. Survey data for each of the other
28 pay areas varied from January 1996 to November 1996. Half of the data for the
“Rest of the United States” pay area were as of 1994. In its report to the Pay Agent
on the 2003 locality payments, the Federal Salary Council reiterated its explanation
of how the pay gaps were determined, stating that the method “uses the methods
employed to calculate pay gaps for the locality pay program since 1995, but involves
aging the non-Federal salary data over an increasingly extended time period.”
Specifically, the data were aged by using the change in the nationwide ECI from the
reference date of the survey to March 2001. The pay gaps were then recalculated
14The council comprises nine members. Members generally recognized for their
impartiality, knowledge, and experience in labor relations and pay policy are Samuel
Johnson Wallace, chair; Mary McNally Rose, vice-chair; and Rudy Joseph Maestas. The
other members represent the American Federation of Government Employees (Bobby L.
Harnage, Sr.); the National Treasury Employees Union (Colleen M. Kelley); the National
Federation of Federal Employees (Richard N. Brown); the American Federation of
Government Employees, AFL-CIO (Peter A. Tchirkow); the Association of Civilian
Technicians (Thomas G. Bastas); and the Fraternal Order of Police (James Pasco).

CRS-6
using March 2001 information on GS employment and salaries. The council
expressed the “hope that NCS data will be usable next year when most of the
improvements have been implemented and that this will be the last year we must use
the old OCSP data.”15
Report of the Federal Salary Council. The council reported the following
results from the application of this methodology. As of March 2001, the overall gap
between GS average salaries (excluding existing locality payments, special rates, and
certain other payments) and non-federal average salaries was 33.97%. The amount
needed to reduce this disparity to 5%, as mandated by FEPCA, averages 27.59% for
2003.
In order to meet the target for closing the pay gap, the council recommended
locality pay raises ranging from 22.41% in the “Rest of the United States” (RUS) pay
area to 46.79% in the San Francisco pay area. The payment recommended for the
Washington, DC, pay area is 28.93%. Because the new locality rate replaces the
existing locality rate, the change in locality rates is derived by comparing 2002
locality payments with those recommended for 2003. This comparison results in
recommended increases in locality rates from 2002 to 2003 of 16.17% in the RUS
pay area to 27.13% in the San Francisco pay area, and 19.24% in the Washington,
DC, pay area. The nationwide average net pay increase, if the ECI and locality-based
comparability payments were granted as required by law, would be 18.56% in 2003.
As in previous years, the council recommended that areas with pay gaps below
the pay gap in RUS receive the same adjustment as RUS. Under the methodology
which has been used since locality pay was first implemented in 1994, areas with low
publishability and pay gaps that were two-tenths of a percentage point (0.2%) or
more below RUS for three surveys were to be dropped as surveyed discrete pay areas,
and the resources used to conduct those surveys were to be redirected to new survey
locations. The council, as it has done the last 3 years, concluded, however, that
“[s]ince surveys conducted under the NCS program, as currently configured, are not
suitable for use in the locality pay program, reallocating survey resources to cover
new cities is not feasible.” Furthermore, the council determined that “using a
nationwide rate of change to adjust the RUS salary data may have overstated non-
Federal pay levels in RUS, and [that] part of the relative drop in the pay gaps in
[Huntsville, Indianapolis, and Kansas City] is probably due to Federal workforce
adjustments instead of changes in non-Federal pay.”16 Therefore, the council
recommended that these pay areas again be included with RUS in 2003.
Basic criteria used to determine whether a county or installation would be
included as part of a pay area for purposes of applying locality pay were established
by the council in 1993. In its report, the council notes that it has “reviewed the
criteria each year since [1993] and recommended only three modifications affecting
15Memorandum for the President’s Pay Agent from the Federal Salary Council, Level of
Comparability Payments for January 2003 and Other Matters Pertaining to the Locality
Pay Program
(Washington: Oct. 31, 2001), pp. 1, 13. (Hereafter referred to as 2003
Federal Salary Council Report
.)
16Ibid., pp. 2-3.

CRS-7
about 10,000 employees during the past 8 years.” (Those modifications involved
partial-county criteria in the case of New London, full-state criteria in the case of
Rhode Island, and reducing the percentage of population living in urbanized areas in
the case of Monterey.) Other criteria which would remain unchanged are that a
county be contiguous to a pay area, contain at least 2,000 GS employees, and
demonstrate some economic linkage with the pay area. The council stated that:
The criteria were intentionally made difficult to pass because the use of OMB’s
MSA [metropolitan statistical area] definitions as the basis for pay areas already
results in very large pay areas. It is the nature of a “locality” program that there
be borders. Once borders are established, there will always be employees near
the borders, and, if we change the borders, there are always new employees just
on the other side .... While we understand the concerns of Federal managers,
employees, and employee groups in all these locations, we believe the pay law
provides other flexibilities for agencies to deal with any recruitment or retention
problems in these areas without the necessity of making exceptions to the pay
area boundaries. These flexibilities include the use of special salary rates up to
60 percent above the base General Schedule, recruitment and relocation bonuses
of up to 25 percent of basic pay, and retention allowances of up to 25 percent of
basic pay.17
Since 1994, St. Mary’s County, MD, has been included in the Washington, DC-
Baltimore, MD, pay area. It continues to meet the county criteria and the council
recommended that it be included with this pay area for 2003. Santa Barbara County,
CA, has been included in the Los Angeles pay area since 1994, and New London,
CT, has been included in the Hartford, CT, pay area since 1998. Employment in
New London, CT, and Santa Barbara County, CA, again has fallen below the
threshold of 2,000 employees that one criterion requires. The council recommended
in 1997, however, “that once an area of application has been approved, it should not
be removed for the duration of FEPCA’s 9-year phase-in for the locality pay program
(1994 through 2002).” Therefore, the council recommended that New London and
Santa Barbara be areas of application for their respective pay areas “at the very least
until the new census data are available for evaluation and the new metropolitan areas
are defined in 2003.”18 Monterey County, CA, which became an area of application
to the San Francisco pay area in 2001, meets the criteria and is recommended to be
included with this pay area in 2003.
The State of Rhode Island was designated as an area of application to the Boston
pay area beginning in 2001. Because counties in Rhode Island are small in
comparison to counties in other states, Rhode Island cannot meet the requirement that
a county contain at least 2,000 GS employees. Therefore, the council recommended
that “Full State” criteria be adopted in this case. Under the recommended criteria,
“States smaller than 115 percent of the average county size in square miles in the
lower 48 states and Washington, DC, are treated as a single county for applying the
17Ibid., pp. 5-6.
18Ibid., p. 3.

CRS-8
county criteria.” Thus, Rhode Island is “considered as a single county.”19 The state
meets the criteria and is recommended for continued inclusion with the Boston pay
area in 2003.
As for the criteria for an installation, the portion of a federal facility that crosses
pay area boundaries, and that is not in the pay area, must have at least 1,000 GS
employees; the duty station(s) of the majority of GS employees must be within 10
miles of the prime-critical survey boundary area; and a significant number of the
facility’s employees must be commuting from the pay area. Since 1994, a portion of
Edwards Air Force Base has been included in the Los Angeles pay area. The base
no longer meets the employment criteria, but the council recommended that it
continue to be included with the Los Angeles pay area for the same reasons that New
London and Santa Barbara were recommended to continue as areas of application.
Methodology.20 The council, in its report to the Pay Agent on the 2001
locality payments, recommended that five improvements be made in the BLS
National Compensation Survey program. The council’s working group report on the
2003 locality payments provided a progress report. Listed according to their levels
of priority, the improvements and progress to date are as follows.
! Use three factors rather than nine to assign the correct federal grade level to
the non-federal jobs surveyed, and provide grade level guides for occupational
families. “OPM has designed and tested a prototype factor evaluation system
using four factors for use in the surveys, and BLS has successfully used the
new approach in field tests. OPM contracted for the development of
additional job family guides, which will be ready for testing soon.” This
approach will be phased into BLS surveys from 2003 through 2007.
! Develop a model to estimate missing data. “BLS has designed an econometric
model that could be used to estimate salaries for jobs not randomly selected
in the surveys. BLS and OPM staff continue to explore technical issues, such
as which jobs to include, what mathematical form to use, how to weight the
data, and whether to use factor patterns or grade level as the work level
variable.” The modeled data will be incorporated into BLS survey results in
2002.
! Improve the matching of federal survey jobs with non-federal survey jobs, and
provide subcategories for occupations which are “not elsewhere classified.”
“OPM formed an interagency working group that developed a crosswalk
19Memorandum for the President’s Pay Agent from the Federal Salary Council, Level of
Comparability Payments for January 2001 and Other Matters Pertaining to the Locality
Pay Program
(Washington: Oct. 22, 1999), p. 4. (Hereafter referred to as 2001 Federal
Salary Council Report
.) Bureau of the Census data on county size and land area are used in
determining whether the “Full State” criteria are met.
20For a discussion of the methodology concerns expressed by the Federal Salary Council,
the Pay Agent, and the Office of Personnel Management over the last several years, see CRS
Report 98-956, Federal Pay: FY2000 Salary Adjustments, by (name redacted); and
CRS Report 97-1008, Federal Pay: FY1999 Salary Adjustments, by (name redacted).

CRS-9
between Federal job classifications and the new Standard Occupational
Classification System, which BLS will be using in its surveys. OPM and BLS
are now reviewing the crosswalk and hope to introduce new Federal
employment weights for use in the NCS program based on the new crosswalk”
in 2002.
! For supervisory occupations, grade the highest level of work supervised.
Adjust the grade level based on the level of supervision, instead of grading the
supervisory job itself. “BLS has identified survey establishments where
supervisory jobs were surveyed, discussed new collection procedures with its
staff, and tested a new method of grading supervisory jobs based on grading
the highest level of work supervised.” The new approach will be fully
incorporated into BLS surveys in 2002.
! Develop criteria to identify and exclude jobs that would be classified above
GS-15 in government. “BLS has developed methods for identifying and
excluding jobs that would be classified above GS-15.” This improvement will
be incorporated into the surveys in 2002.21
The council’s report on the 2003 locality payments stated that it is “pleased with
the progress made to date and look[s] forward to reviewing NCS data [in 2002] after
four of the five improvements are implemented.” The council also “hope[s] the
impact of the improvements will be reflected in the survey results [presented in
2002].” However, the council noted that “none of the improvements are in current
surveys.”22
Definition of Metropolitan Areas. The component parts of the 32 locality
pay areas are determined by using the OMB definitions of metropolitan areas.
Whenever OMB revises the definitions, the locality pay areas change automatically.
In 2003, OMB will redefine the areas using the new criteria and 2000 census data.
On September 11, 2002, OPM proposed regulations which would provide that
locality pay areas would no longer change automatically when the definitions of
metropolitan areas change.23
Pay Agent Report. After considering the council’s recommendations, the
Pay Agent endorsed them in its December 13, 2001 annual report to the President on
the 2003 locality payments.24 The Pay Agent estimated that the cost of the January
2003 locality-based comparability payments would be $9.795 billion if the full
amount necessary to reduce the pay disparity of the target gap to 5% were provided
21The recommendations are from 2001 Federal Salary Council Report, p. 8. The progress
reports are from Federal Salary Council, Report of the FSC Methodology Working Group
(Washington: Oct. 22, 2001), p. 9.
222003 Federal Salary Council Report, p. 9.
23U.S. Office of Personnel Management, “Locality Pay Areas,” Federal Register, vol. 67,
no. 176, Sept. 11, 2002, p. 57536.
24Report on Locality-Based Comparability Payments for the General Schedule, Annual
Report of the President’s Pay Agent
(Washington: 2001).

CRS-10
in January 2003 as required by FEPCA.25 Table 1 shows the council’s and the Pay
Agent’s recommended locality payments for January 2003.
As for the recommended improvements in the BLS National Compensation
Survey Program, the Pay Agent stated that it “is now preparing to implement four of
the five survey improvements, which will affect surveys to be delivered [in 2002].”
According to the Pay Agent, “[i]mplementation of the fifth improvement, a four-
factor grading system with job family guides, will begin by 2003 but will not be fully
implemented until 2007.” The Agent expressed its hope that “the NCS data will be
usable for setting locality pay” in 2004.26
Federal Salary Council Recommended Pay Adjustments If the
Increase is 4.1% in January 2003. At its October 1, 2002 meeting, the Federal
Salary Council endorsed the recommendations of its Methodology Working Group
on the January 2003 pay adjustments if the increase were 4.1% (3.1% annual and
1.0% locality). According to the recommendations, the net (annual + locality) pay
adjustment would be 4.03% in the RUS pay area, 4.87% in the San Francisco pay
area, and 4.27% in the Washington, DC pay area.27
Once both the annual and locality pay percentage amounts are determined, the
actual pay rates are calculated as follows. First, the basic General Schedule (GS) is
increased by the annual adjustment percentage, resulting in a new GS schedule.
These new basic GS rates are then increased by the locality payment. The resulting
pay rates (annual + locality) are compared with the 2002 pay rates (annual + locality)
to derive the net increase in pay for 2003.
The President’s Recommendation
President George W. Bush issued his administration’s FY2003 budget on
February 4, 2002. The budget proposed a 2.6% federal civilian pay adjustment, but
did not state how the increase would be allocated between the annual and locality
adjustments required by FEPCA in January 2003.28 During a briefing on the FY2003
budget, OMB Director Mitchell Daniels explained the reasoning behind the 2.6%
recommendation:
We do believe that a distinction can and should be made between people in
harm’s way at a time of war. And, therefore, feel it’s entirely appropriate that
there should be some additional compensation for uniform personnel. And as to
25Ibid, p. 23.
26Ibid, p. 26.
27U.S. Federal Salary Council, Report of the FSC Methodology Working Group. Attachment
2 of the report. Sent to CRS by facsimile from the Office of Personnel Management, Oct.
2, 2002.
28U.S. Executive Office of the President, Office of Management and Budget, Budget of the
United States Government Fiscal Year 2003; Analytical Perspectives
(Washington: GPO,
2002), p. 23.

CRS-11
the civilian side, there’s a rough equation, called the ECI ... and it would have
pointed to 3.6, but that’s only a starting point. We decided that it would be fair
and appropriate, at a time when many other Americans have seen their pay go to
zero. And in the private sector, estimates for increases range from about 1.8 to
maybe 3. For those who are employed, we thought giving back 1 percent or, let’s
say, taking 1 percent less than this sort of rule of thumb index was something that
federal employees would feel is fair and I hope many will feel it’s an appropriate
thing to do. Let me just remind you, this is [an] increase at a time when the
economy is in recession and many Americans are seeing zero increase or even
a drop in pay.29
The statutory annual pay adjustment required in January 2003 was 3.1%. If the
President wanted to change the required rate of the annual adjustment, he would have
had to submit an alternative plan for the annual adjustment to Congress by September
1, 2002. Since President Bush did not issue an alternative plan, the annual
adjustment was the 3.1% required by law. He did issue an alternative plan to change
the amount of the locality-based comparability payments on November 27, 2002.
The alternative plan froze the locality payments at the levels authorized for January
2002. (See the discussion under “Treasury, Postal Service, and General Government
Appropriations Bill, 2003” for congressional action which resulted in a combined
4.1% pay adjustment for January 2003.)
President Bush said that he issued the alternative plan because
A national emergency has existed since September 11, 2001. Full statutory
civilian pay increases in 2003 would interfere with our Nation’s ability to pursue
the war on terrorism. They would cost about $13.6 billion in 2003 alone—$11.2
billion more than the 2.6 percent overall Federal civilian pay increase I proposed
in my 2003 Budget—and would build in later years. Such cost increases would
threaten our efforts against terrorism or force deep cuts in discretionary spending
or Federal employment to stay within budget.30
Citing a rate of inflation of 2.1% and a 2.1% per year federal quit rate as
indicators, he stated that his decision on the pay adjustment would not affect
recruitment and retention. The cost of the pay adjustment is about $2.9 billion.
The President announced his allocation of the 2003 pay adjustment in Executive
Order 13282, issued on December 31, 2002.31
29Press Briefing on the Budget by Office of Management and Budget Director Mitch
Daniels, Feb. 4, 2002. Available on the Internet at [http://www.whitehouse.gov/omb/
transcripts/daniels_03budget.html], visited Apr. 2, 2002. The ECI requires a 3.1% annual
pay adjustment in January 2003.
30U.S. President (Bush), “Text of a Letter from the President to the Speaker of the House of
Representatives and the President of the Senate,” Nov. 27, 2002.
31U.S. President (Bush), “Adjustments of Certain Rates of Pay,” Executive Order 13282,
Federal Register, vol. 68, Jan. 8, 2003, pp. 1133-1134.

CRS-12
Congressional Actions and Considerations
Congress, in considering the size of the federal white-collar pay adjustment that
would be provided in January 2003, could pass an adjustment that is different from
the adjustment recommended by the President in the budget or authorized by the
President in an alternative plan. The January 1999 (3.6%), January 2000 (4.8%), and
January 2002 (4.6%) overall pay adjustment amounts were set by Congress.32
Seven Members of Congress from the Washington, DC, area wrote a letter to
President Bush on January 30, 2002 urging him to adjust pay for federal civilian
employees at the same time and in the same proportion as pay for the uniformed
military. The letter stated: “Last year, the House and Senate budget resolutions
included a pay parity provision signaling that parity between our military and civilian
employees is fair and reasonable. Congress has supported pay parity in 17 of the last
20 years and we urge that you adequately fund the continuance of this
commitment.”33 The FY2003 budget proposed a 4.1% pay increase for the military.34
According to OPM, it would cost an additional $1.5 billion to provide a 4.1% pay
adjustment rather than a 2.6% pay adjustment to federal civilian employees.35
Senator Daniel Akaka, Chairman of the Senate Subcommittee on International
Security, Proliferation, and Federal Services of the Committee on Governmental
Affairs, in a statement on the Senate floor, said that “By 2005, over half the Federal
workforce will be eligible to retire, and as long as fewer young people are choosing
Federal service to fill these gaps, there should be a commitment from the highest
levels of government to ensure that agencies are adequately staffed with the right
people and the right skills to run the government in an effective and efficient
manner.”36 Representative Steny Hoyer, ranking member of the House Committee
on Appropriations, Subcommittee on Treasury, Postal Service, and General
32P.L. 105-277, P.L. 106-58, and P.L. 107- 67, respectively, provided the 3.6%, 4.8%, and
4.6% pay adjustments, respectively, but reserved for the President the decision as to how
the increases would be allocated between the annual and locality pay adjustments.
33The letter is available on the Internet at [http://www.house.gov/hoyer/20020130a.htm],
visited Feb. 4, 2002. See also Stephen Barr, “The Annual Reminder That Civil Servants
Have Friends on the Hill,” Washington Post, Feb. 1, 2002, p. B2. The Members of Congress
are Reps. Thomas Davis, Steny Hoyer, James Moran, Constance Morella, Frank Wolf,
Albert Wynn, and Del. Eleanor Holmes Norton.
34U.S. Executive Office of the President, Office of Management and Budget, Budget of the
United States Government Fiscal Year 2003
(Washington: GPO, 2002), p. 96. For the
uniformed military pay adjustments, see CRS Issue Brief IB10089, Military Pay and
Benefits: Key Questions and Answers
, by (name redacted).
35U.S. Executive Office of the President, Office of Management and Budget, Statement of
Administration Policy, H.R. 5120 - Treasury, Postal Service, and General Government
Appropriations Bill, FY 2003
, July 18, 2002, p. 2. Available on the Internet at
[http://www.whitehouse.gov/omb/] choose “Statements of Administration Policy,” visited
Aug. 5, 2002.
36Statement of Senator Daniel Akaka, “Federal Employees Deserve Pay Parity,”
Congressional Record, daily edition, vol. 148, Feb. 15, 2002, p. S895.

CRS-13
Government, testified on federal pay before the House Committee on the Budget on
February 14, 2002. In supporting parity between the military and civilian pay
adjustments, he stated that the federal government “will not be able to recruit, much
less retain the best and most valuable employees if [it] pays them one third less than
they can make in the private sector.” He added that “No successful fortune 500
company would stand for this nor should the federal government.”37
Concurrent Budget Resolutions
The Concurrent Resolution on the Budget for FY2003 (H.Con.Res. 353), as
agreed to by the House of Representatives on March 20, 2002, included language at
section 403 expressing the sense of the House that the size of the January 2003
federal civilian pay adjustment should be the same as that proposed for the uniformed
military, 4.1%. Among the findings stated in the Sense of the House was this: “In
almost every year during the past two decades, there have been equal adjustments in
the compensation of civilian employees of the United States.”38 Representative
James Moran sponsored the amendment that included the provision in H.Con.Res.
353. According to him, “Our real challenge is to raise the income of both groups
significantly, not to allow one group to fall further behind the other.”39
The Senate version of the Concurrent Resolution on the Budget (S.Con.Res.
100), as reported (without written report) from the Senate Committee on the Budget
on March 22, 2002, included Sense of the Senate language similar to H.Con.Res. 353
at section 302. Senator Paul Sarbanes sponsored the amendment to include the
provision.
The Concurrent Budget Resolution does not become law, but provides the
framework within which Congress subsequently considers spending legislation. Any
congressional recommendation on the civilian federal pay adjustment is usually
included in the Treasury, Postal Service, and General Government Appropriations
Bill.
Treasury, Postal Service, and General Government
Appropriations Bill, 2003

The Treasury, Postal Service, and General Government Appropriations Bill,
2003 (107th Congress), as passed by the House of Representatives (H.R. 5120) and
as reported by the Senate Committee on Appropriations (S. 2740), would have
37Statement of Congressman Steny H. Hoyer Before the House Committee on the Budget,
Feb. 14, 2002, p. 3.
38H.Con.Res. 353 was agreed to in the House by a 221-209 vote (Roll No. 79) on Mar. 20,
2002. U.S. Congress, House Committee on the Budget, Concurrent Resolution on the
Budget, FY2003
, report to accompany H.Con.Res. 353, 107th Cong., 2nd sess., H.Rept. 107-
376 (Washington: GPO, 2002), pp. 88, 156.
39“Budget Committee Approves Pay Parity for Federal Workers,” news release from Rep.
J a me s M o r a n , M a r . 1 4 , 2 0 02. Available on the Internet at
[http://www.house.gov/moran/20020314.htm], visited Apr. 2, 2002.

CRS-14
provided a 4.1% federal civilian pay adjustment, with no recommendation as to how
the increase should be divided between the annual and locality pay adjustments.
The House Subcommittee on Treasury, Postal Service, and General Government
marked up H.R. 5120 on June 26, 2002 and by voice vote adopted an amendment that
would provide a 4.1% pay adjustment. The subcommittee by voice vote approved
the bill for consideration by the full committee the same day. On July 9, 2002, the
House Committee on Appropriations marked up H.R. 5120 and by voice vote ordered
it to be reported favorably to the House of Representatives. It was reported (H.Rept.
107-575) to the House as an original bill by the House Appropriations Committee on
July 15, 2002.40 The House passed H.R. 5120 on a 308-121 vote (Vote No. 341) on
July 24, 2002. Section 643 of the bill both as reported and as passed would mandate
the 4.1% increase.
The Senate Subcommittee on Treasury and General Government marked up S.
2740 on July 11, 2002 and by voice vote approved the bill, which included the 4.1%
pay adjustment, for consideration by the full committee. On July 16, 2002, the
Senate Committee on Appropriations marked up S. 2740 and on a 29-0 vote ordered
the bill to be reported favorably to the Senate. It was reported (S.Rept. 107-212) to
the Senate as an original bill by the Senate Committee on Appropriations on July 17,
2002.41 Section 637 would mandate the 4.1% pay adjustment.
The 107th Congress adjourned sine die before action could be completed on the
treasury bill. Several Members of Congress from the Washington, DC metropolitan
area, including Representatives Tom Davis, Steny Hoyer, Jim Moran, Frank Wolf,
and Albert Wynn, reportedly have said that they will negotiate to add a 1.0% locality
payment to the pay adjustment early in the 108th Congress.42 In a statement
responding to the President’s alternative plan, Representative Hoyer said that “Before
the 107th Congress adjourned, I had a good conversation with Speaker Hastert
regarding a 4.1% pay adjustment for federal employees and I am confident that we
will authorize that adjustment when Congress reconvenes in January.” He also said
that
Congress has spoken very clearly on this issue. Both the House and Senate have
already agreed to the 4.1% through action in the fiscal year Treasury-Postal
appropriations bills. In addition, the Federal Salary Council recently
40U.S. Congress, House Committee on Appropriations, Treasury, Postal Service, and
General Government Appropriations Bill, 2003
, report to accompany H.R. 5120, 107th
Cong., 2nd sess., H.Rept. 107-575 (Washington: GPO, 2002), p. 97.
41U.S. Congress, Senate Committee on Appropriations, Treasury and General Government
Appropriation Bill, 2003
, report to accompany S. 2740, 107th Cong., 2nd sess., S. Rept. 107-
212 (Washington: GPO, 2002), p. 95.
42Stephen Barr, “Don’t Give Up on 4.1% Raises, Key Local Lawmakers Say,” The
Washington Post
, Dec. 2, 2002, p. B2. Stephen Barr, “Draft OPM Tables Reflect 3.1%
Raise, but Congress May Have Last Word,” The Washington Post, Dec. 3, 2002, p. B2.
Tanya N. Ballard, “Lawmaker, Union Stand Behind 4.1 Percent Pay Raise,” GovExec.Com,
Dec. 2, 2002.

CRS-15
recommended that the pay adjustment for 2003 be 4.1% and 4.1% provides parity
with the military pay adjustment recently signed into law by the President.”43
On December 5, 2002, Senators George Allen, Barbara Mikulski, Paul Sarbanes,
and John Warner sent a letter to Senator Ted Stevens, chairman of the Senate
Committee on Appropriations, which “request[ed] that in any Continuing Resolution
or any Omnibus Appropriations bill that a 4.1 percent pay raise be included for
federal civilian employees.” The letter stated that “federal employees are an integral
part in our fight against terrorism and protecting our homeland security” and “fully
deserve the additional one percent increase to the 3.1 percent pay adjustment
currently scheduled for federal employees in 2003.”44
In the 108th Congress, on February 13, 2003, the Senate and the House of
Representatives agreed to the conference report for H.J.Res. 2, making further
continuing appropriations for the fiscal year 2003.45 Section 637 of H.J. Res. 2
provided for a 4.1% pay adjustment effective as of the first applicable pay period
beginning on or after January 1, 2003. In the conference report accompanying the
bill, the conferees endorsed the Federal Salary Council’s October 2002
recommendation for allocating locality pay. FEDweek reported the following with
regard to the pay increase: “Although not specified in the recently enacted
legislation, it’s expected that the funds for the additional percentage point of salary
will be divided up as locality pay.”46 According to the Federal Times, “the extra 1
percent ... likely will be calculated as locality pay.”47 Agencies are required to absorb
the cost of the increase.
President Bush signed H.J. Res. 2 on February 20, 2003 and it became P.L. 108-
7. On March 21, 2003, the President issued Executive Order 13291 which allocated
the additional 1.0% as locality pay.48 The locality pay adjustment is retroactive to
January 2003. According to OPM, the cost of the combined 4.1% pay adjustment is
about $3.8 billion dollars. OPM issued new salary tables for 2003 to implement the
executive order and these are available on the Internet at [http://www.opm.gov].
43Media Release, Rep. Steny H. Hoyer, “Hoyer Determined to Push Ahead for 4.1% Fed Pay
Adjustment,” Nov. 30, 2002.
44Letter sent to CRS by facsimile on Dec. 11, 2002.
45U.S. Congress, Conference Committees, 2003, Making Further Continuing Appropriations
For the Fiscal Year 2003, and For Other Purposes
, conference report to accompany H.J.
Res. 2, 108th Cong., 1st sess., H. Rept. 108-10 (Washington: GPO, 2003), p. 1358. The
Senate agreed to the conference report for H.J.Res. 2 on a 76 to 20 vote (No. 34) and the
House of Representatives agreed to the conference report on a 338 to 83 vote (Roll No. 32)
on Feb. 13, 2003.
46FEDweek Issue: Wednesday, Feb. 19, 2003. Available on the Internet at
[http://www.fedweek.com], visited Feb. 19, 2003.
47Tim Kauffman, “Federal Workers In Line For Second ‘03 Pay Raise,” Federal Times, Feb.
17, 2003. Available on the Internet at [http://federaltimes.com], visited Feb. 19, 2003.
48U.S. President (Bush), “Further Adjustment of Certain Rates of Pay,” Executive Order
13291, Federal Register, vol. 68, Mar. 25, 2003, pp. 14525-14526.

CRS-16
Table 1 shows the recommended locality payments, the authorized locality
payments, and the net annual and locality pay increases.
Employee Views
As in past years, the American Federation of Government Employees (AFGE)
and the National Treasury Employees Union (NTEU) endorse pay parity between
federal civilian employees and the uniformed military and full implementation of
FEPCA.49
49See The American Federation of Government Employees, AFL-CIO, “2002 Federal Pay
Raise Insufficient for Critical Government Employee Recruitment,” Jan. 14, 2002. Available
on the Internet at [http://afge.org] (choose Press Releases), visited Feb. 4, 2002. Stephen
Barr, “Government Pay Review, Recruiting Problems Will Shake Up OPM Priorities,”
Washington Post, Feb. 4, 2002, p. B2.

CRS-17
Table 1. January 2003 Recommended Locality Payments, Authorized
Locality Payments, and Net Annual and Locality Pay Increases
2003 Recommended
2003 Authorized
Net Increase, Annual
Pay Areas
Locality Payments
Locality Payments
and Locality Pay
Atlanta MSA
25.52%
10.85%
4.14%
Boston-Worcester-Lawrence CMSA,
all of Bristol County, MA, and the
32.81%
15.00%
4.40%
State of Rhode Island
Chicago-Gary-Kenosha CMSA
36.15%
16.15%
4.51%
Cincinnati-Hamilton CMSA
31.10%
13.44%
4.34%
Cleveland-Akron CMSA
26.90%
11.50%
4.19%
Columbus, OH MSA
24.76%
11.78%
4.11%
Dallas-Fort Worth CMSA
27.64%
12.10%
4.22%
Dayton-Springfield MSA
24.02%
10.67%
4.09%
Denver-Boulder-Greeley CMSA
32.79%
14.77%
4.40%
Detroit-Ann Arbor-Flint CMSA
35.91%
16.27%
4.50%
Hartford MSA and New London
33.37%
15.56%
4.41%
County
Houston-Galveston-Brazoria CMSA
44.16%
20.53%
4.77%
Huntsville MSA
22.41%
10.06%
4.03%
Indianapolis MSA
22.41%
9.83%
4.03%
Kansas City MSA
22.41%
10.26%
4.02%
Los Angeles-Riverside-Orange
County CMSA and Santa Barbara
38.15%
17.71%
4.57%
County and Edwards Air Force Base
Miami-Fort Lauderdale CMSA
31.29%
13.81%
4.35%
Milwaukee-Racine CMSA
26.44%
11.20%
4.18%
Minneapolis-St. Paul MSA
29.32%
12.84%
4.28%
New York-Northern New Jersey-
36.71%
16.83%
4.53%
Long Island CMSA
Orlando MSA
22.55%
9.65%
4.03%
Philadelphia-Wilmington-Atlantic
30.24%
13.43%
4.31%
City CMSA
Pittsburgh MSA
23.02%
10.52%
4.04%
Portland, OR-Salem, WA CMSA
30.55%
12.97%
4.33%
Richmond-Petersburg MSA
24.90%
10.75%
4.12%
Sacramento-Yolo CMSA
29.86%
13.29%
4.30%
St. Louis MSA
23.15%
9.99%
4.06%
San Diego MSA
31.58%
14.07%
4.35%
San Francisco-Oakland-San Jose
46.79%
21.08%
4.87%
CMSA and Monterey County
Seattle-Tacoma-Bremerton CMSA
30.86%
13.11%
4.34%
Washington, DC-Baltimore, MD
28.93%
12.74%
4.27%
CMSA and St. Mary’s County
Rest of the U.S.
22.41%
9.62%
4.03%
Average
27.59%
12.14%
4.21%
Source: Memorandum for the President’s Pay Agent from the Federal Salary Council, Level of Comparability Payments
for January 2003 and Other Matters Pertaining to the Locality Pay Program
(Washington: Oct. 31, 2001), p. 11; and
Report on Locality-Based Comparability Payments for the General Schedule, Annual Report of the President’s Pay
Agent
(Washington: 2001), p. 19. U.S. President (Bush), “Adjustments of Certain Rates of Pay,” Executive Order
13282, Federal Register, vol. 68, Jan. 8, 2003, pp. 1133-1134. The Executive Order provided a 3.1% annual pay

CRS-18
adjustment and froze locality payments at the January 2002 levels. U.S. President (Bush), “Further Adjustment of
Certain Rates of Pay,” Executive Order 13291, Federal Register, vol. 68, March 25, 2003, pp. 14525-14526. The
Executive Order provided a locality-based comparability payment, averaging about 1.0% of the General Schedule
payroll.
Notes: The actual pay rates are calculated as follows. First, the basic General Schedule (GS) is increased by the annual
adjustment percentage, resulting in a new GS schedule. These new basic GS rates are then increased by the locality
payment. The resulting pay rates (annual + locality) are compared with the 2002 pay rates (annual + locality) to
derive the net increase in pay for 2003. Salary tables for 2003 are available on the Internet at
[http://www.opm.gov]. MSA refers to a Metropolitan Statistical Area. CMSA refers to a Consolidated
Metropolitan Statistical Area. The component parts of each pay area are described at 5 CFR 531.603(b).

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