Study: Juneau cost of living high, growing

Posted: Tuesday, May 05, 2009

It costs more to live in Juneau, about 11 percent more, than it does in Anchorage, and the difference is increasing.

The state Department of Administration released its new report on geographical cost differences last week. It was produced by Juneau's McDowell Group at a cost of $400,000.

The study could mean raises for state employees in higher-cost areas such as Juneau. Any changes to pay would come as the results of the study are incorporated in new salary schedules and union contracts.

"There's some discussion that has to occur about how that is going to happen," said Kevin Brooks, deputy commissioner of the Department of Administration, which oversees labor issues.

It has been 23 years since a widespread cost of living study was done, and during that time it's become more expensive to live in almost every region outside Anchorage. The state's largest city provided the baseline for comparison with the rest of the state.

Brooks said it will be up to the Legislature to use the study when it approves funding for new pay schedules. The new data is likely to be used before that as new union contracts are negotiated, he said.

Jim Duncan with the Alaska State Employees Association said he was pleased that a new study had finally been done, but was still reviewing it.

"We go into bargaining this November, and we intend to include geographic differential in our contract," he said.

The ASEA contract expires June 30, 2010. It is one of several unions representing state employees.

While many state contracts contain references to geographic differential, those numbers have become increasingly out of date, Duncan said.

Getting the new numbers incorporated into new contracts will be part of the negotiations, he said.

"We can't do it unilaterally, we have to get agreement from the administration," Duncan said.

Brooks and Duncan said that until those contracts are negotiated and approved by the Legislature, it is not possible to say what the cost will be.

"It's difficult to tell what that means as far as monetary value," Duncan said.

"Some areas of the state would see an adjustment upward," he said.

In Juneau, where 3,365 state employees work, the report documented an increased cost of living since the last study in 1985.

Then, it cost 3 percent more to live in the capital city than in Anchorage, while it currently costs 11 percent more.

Duncan, a former state legislator from Juneau, said that finding was not a surprise.

"We've known for some time that the Juneau cost of living was increasing for a variety of reasons," he said.

The study established the geographic differential by looking at how much each community cost based on a "market basket" of different expenses an average worker was likely to have.

A few expenses were lower in Juneau. Fruits and vegetables were 4 percent less than Anchorage, and auto insurance was 24 percent lower.

The study established 30 percent of the cost of living was housing, 15 percent was food, 14 percent was transportation and 5 percent was medical, and then looked at the individual cost of those and other items.

Housing in Juneau cost 14 percent more than in Anchorage, but the shelter itself was only 4 percent more. Utilities, however, were 63 percent more, likely due to expensive heating oil use in much of Juneau.

McDowell found that while the price of dairy products in Juneau was identical to Anchorage, household furnishings and appliances cost 35 percent more.

Transportation cost 9 percent more in Juneau, motor fuel 13 percent more and car/truck ownership 24 percent more. Savings came from the cost of auto insurance, which in Juneau was 24 percent less than in Anchorage.

• Contact reporter Pat Forgey at 523-2250 or patrick.forgey@juneauempire.com.



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