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Local Aid and Finance Cost-of-living and inflation data available
Local officials seeking inflation data for planning purposes can access several relevant economic indicators.
PERAC COLA
The Public Employee Retirement Administration Commission gives local retirement boards the option to grant a cost-of-living adjustment based on the Social Security Administration’s COLA determination.
The Social Security Administration uses the national Consumer Price Index for Urban Wage Earners and Clerical Workers, known as the CPI-W, from the U.S. Department of Labor, to determine annual cost-of-living adjustments in order to prevent inflation from eroding Social Security and Supplemental Security Income benefits.
Social Security has set the COLA at 2.3 percent for benefits paid in calendar 2008. For 2007, the SSA’s COLA was 3.3 percent.
The latest Boston-area CPI-W, covering the year ending in November 2007, was 3.2 percent. The Boston-area CPI-W encompasses most of New England.
CPI
The Division of Local Services recommends that Massachusetts local officials looking at changes in budgets, revenues or other factors consider using inflation data to present data in “constant dollars” over multiple years. The DLS suggests two particular indices: the Boston-area Consumer Price Index for All Urban Consumers (CPI-U), and the State and Local Government Implicit Price Deflator.
The Boston-area CPI-U for the year ended in November 2007 was 3.4 percent, according to the latest data from the U.S. Department of Labor. The Boston-area CPI-U for the same period in 2006 and 2005 were 2.1 percent and 3.3 percent, respectively. Historically, the CPI has averaged 3 percent over the long-term.
State and Local Government Implicit Price Deflator
The State and Local Government Implicit Price Deflator also serves as an indicator of inflation, but it measures inflation as it relates to a “market basket” of goods and services typically purchased by state and local governments. The Massachusetts Department of Education uses this price deflator index to calculate the inflation rate for cost factors in the foundation budget formula.
The State and Local Government Implicit Price Deflator was 5.1 percent for the year ended in September 2007, according to the latest U.S. Department of Commerce data. The State and Local Government Implicit Price Deflator rose 5.2 percent from September 2005 to September 2006.
Property tax exemption COLA
In March 2007 the state revenue commissioner determined the cost-of-living adjustment to be used in fiscal 2008 by communities that adopt certain local options regarding property tax exemptions for senior citizens. The Department of Revenue measures the cost-of-living adjustment by the increase in the Consumer Price Index during the previous calendar year. The cost-of-living adjustment for fiscal 2008 exemption purposes is 4.3 percent. This adjustment was 3.3 percent in fiscal 2007, 2.8 percent in fiscal 2006, and 3.8 percent in fiscal 2005. The figure for fiscal 2009 is expected to be released in March 2008.
Sources
The U.S. Department of Labor’s Bureau of Labor Statistics releases current information on the CPI each month. The latest Boston-area and national CPI data, as well as local and national employment rates, are available at http://stats.bls.gov/cpi or by calling the CPI Quickline at (202) 691-6994.
The Division of Local Services Municipal Data Bank provides CPI and State and Local Government Implicit Price Deflator data for 1980 to 2007. See www.mass.gov/dls for a downloadable spreadsheet, or call the DLS at (617) 626-2300.
Local Aid and Finance Cost-of-living and inflation data available
Cost-of-living and inflation data available
Local officials seeking inflation data for planning purposes can access several relevant economic indicators.
PERAC COLA
The Public Employee Retirement Administration Commission gives local retirement boards the option to grant a cost-of-living adjustment based on the Social Security Administration’s COLA determination.
The Social Security Administration uses the national Consumer Price Index for Urban Wage Earners and Clerical Workers, known as the CPI-W, from the U.S. Department of Labor, to determine annual cost-of-living adjustments in order to prevent inflation from eroding Social Security and Supplemental Security Income benefits.
Social Security has set the COLA at 2.3 percent for benefits paid in calendar 2008. For 2007, the SSA’s COLA was 3.3 percent.
The latest Boston-area CPI-W, covering the year ending in November 2007, was 3.2 percent. The Boston-area CPI-W encompasses most of New England.
CPI
The Division of Local Services recommends that Massachusetts local officials looking at changes in budgets, revenues or other factors consider using inflation data to present data in “constant dollars” over multiple years. The DLS suggests two particular indices: the Boston-area Consumer Price Index for All Urban Consumers (CPI-U), and the State and Local Government Implicit Price Deflator.
The Boston-area CPI-U for the year ended in November 2007 was 3.4 percent, according to the latest data from the U.S. Department of Labor. The Boston-area CPI-U for the same period in 2006 and 2005 were 2.1 percent and 3.3 percent, respectively. Historically, the CPI has averaged 3 percent over the long-term.
State and Local Government Implicit Price Deflator
The State and Local Government Implicit Price Deflator also serves as an indicator of inflation, but it measures inflation as it relates to a “market basket” of goods and services typically purchased by state and local governments. The Massachusetts Department of Education uses this price deflator index to calculate the inflation rate for cost factors in the foundation budget formula.
The State and Local Government Implicit Price Deflator was 5.1 percent for the year ended in September 2007, according to the latest U.S. Department of Commerce data. The State and Local Government Implicit Price Deflator rose 5.2 percent from September 2005 to September 2006.
Property tax exemption COLA
In March 2007 the state revenue commissioner determined the cost-of-living adjustment to be used in fiscal 2008 by communities that adopt certain local options regarding property tax exemptions for senior citizens. The Department of Revenue measures the cost-of-living adjustment by the increase in the Consumer Price Index during the previous calendar year. The cost-of-living adjustment for fiscal 2008 exemption purposes is 4.3 percent. This adjustment was 3.3 percent in fiscal 2007, 2.8 percent in fiscal 2006, and 3.8 percent in fiscal 2005. The figure for fiscal 2009 is expected to be released in March 2008.
Sources
The U.S. Department of Labor’s Bureau of Labor Statistics releases current information on the CPI each month. The latest Boston-area and national CPI data, as well as local and national employment rates, are available at http://stats.bls.gov/cpi or by calling the CPI Quickline at (202) 691-6994.
The Division of Local Services Municipal Data Bank provides CPI and State and Local Government Implicit Price Deflator data for 1980 to 2007. See www.mass.gov/dls for a downloadable spreadsheet, or call the DLS at (617) 626-2300.
