The Federal Reserve Board will vote Sept. 7 on a proposed budget of $387.6 million for the 2000 and 2001 fiscal years, a 4.9% increase from the current biennium.
In proposing the budget this week, the Fed said it would set aside money to pay merit raises of up to 4.4% next year and 4% in 2001.
These raises are intended to help the Fed compete with the private sector for economists and technology experts.
The central bank plans to spend $3.1 million over the next two years on installing a computer system-Banking Organization National Desktop-that will let examiners quickly share data. The system's estimated cost is $16 million, and the installation is scheduled to be completed by 2003.
Another project is the renovation of the Fed's building, which would get $11.6 million of funding next year and in 2001, or 70% more than in the 1998-99 budget.
Year-2000-related expenses "will effectively go to zero," Fed Chairman Alan Greenspan said. The Fed's Y2K budget for 1998-99 was $15.2 million. In the proposed budget, $800,000 is suggested to complete system monitoring. Last month the Fed approved a 5.8% budget hike, to $2.285 billion, for its 12 district banks next year-the largest percentage increase since 1994.
The larger budget covers investments in a check operating infrastructure and allows for growing check and cash volumes; it also lets the banks pay higher salaries, according to the Fed.