Twenty years is too long to wait to update a cost-of-living index that affects how much state employees make in various cities. Much has changed over two decades, and the result is a penalty against thousands of state workers in the hub of state government, Juneau.
The capital is, according to multiple studies, the most expensive major city in Alaska. According to a study released by the Juneau Economic Development Council in December, Juneau is the most expensive major city in Alaska or Washington well ahead of Seattle. Yet 20 years ago, researchers found a different result, and the state is still basing its paychecks on those numbers.
Using Anchorage as its baseline with a cost-index score of 100 the state assigned cost-of-living payments to its workers based on their city's or village's score. Juneau, along with Ketchikan, Kenai, Palmer, Seward and Sitka, rated just a 100 back then. Some of the most far-flung villages, where transporting goods is costly, rated tens of percentage points higher a situation that likely would continue to today. But what does not continue is a higher cost of living in Fairbanks. The Interior's largest city rated 104 in the study 20 years ago, and therefore its state employees get 4 percent more than their counterparts in Juneau or Anchorage.
The JEDC index rated Juneau considerably higher than Fairbanks in cost of living, and a breakout of some of the comparative costs makes it easy to see why. A 2,400-square-foot house in Juneau was found to cost $390,000, compared to $349,615 in Fairbanks. The same box of breakfast cereal that went for $3.52 in Juneau was $3.07 in Fairbanks.
State officials say it would cost $500,000 for a new survey, and legislators are thinking about doing one. It's time to do it so that the cost-of-living adjustments can again serve their purpose: easing the burden of living in Alaska's costliest places.
The Juneau Empire
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