GovernmentExecutive.com

As gasoline prices nationwide soared to levels measuring nearly twice those of a year ago, federal employees who drive personal vehicles on government business are seeking an increase in their mileage reimbursement.

Federal law allows the General Services Administration to establish a mileage reimbursement rate for government employees who use their own cars for work, but the GSA-mandated rate cannot exceed the rate established annually for tax deduction purposes by the Internal Revenue Service.

The IRS set the current rate at 40.5 cents per mile in November 2004. The 3 cents increase from the previous year was one of the largest ever and was the result of higher vehicle and fuel costs in September 2004, IRS officials said. But those higher gasoline prices pale in comparison to the prices motorists are now paying at the pump.

While the IRS did lift federal taxes on some types of diesel fuel used primarily by commercial trucks, it did not indicate any plans to review the mileage reimbursement rate. The IRS declined to comment on the issue on Tuesday.

According to AAA Mid-Atlantic's Daily Fuel Gauge Report, the average price for a gallon of regular unleaded gasoline in the United States was $1.85 one year ago. As of Tuesday, the average price reached $3.04 a gallon, with prices in the Washington Metro area averaging $3.23 per gallon.

In a letter Tuesday to IRS Commissioner Mark Everson, National Treasury Employees Union President Colleen Kelley asked the IRS to raise the reimbursement rate.

"This is placing an especially heavy burden on those who must travel to perform their work duties," Kelley wrote in the letter. "The current rate of $0.405 is simply insufficient to cover the actual costs of driving a car on government business when gas prices are over $3 per gallon."

Kelley said GSA has indicated that it would be willing to increase the rate, but is unable to do so until the IRS raises the rates.

GSA spokeswoman Mary Alice Johnson confirmed this, and said federal laws forbid GSA from setting mileage reimbursement rates higher than the IRS'.

John B. Townsend II, AAA Mid-Atlantic's government and public affairs manager, predicated that the price of a gallon of gas will level off.

"While it is too soon to say this is a harbinger of things to come, it appears the price situation at the pump is stabilizing," Townsend said. "After a wild ride, the price of gas actually dipped by a penny at pumps in Virginia and by 2 cents at gas stations across the nation."

Maryland and Washington currently have the highest pump prices in the country according to AAA, with gas prices jumping nearly 10 cents a gallon overnight in Washington.

COMMENTS

• i work for a small franchise company where we drive our own cars and our boss only pays us .29 cents a mile and at times i drive 70 to 100 miles a day. think what .29 is not even enough to pay for the gas i burn. so tell me how he gets to pay less and some of you think .405 is too much. give me a break!!! michelle guidry Posted May 10, 2008 12:56 PM
• Dear Working for the Tax Payer, I agree with you 100 percent. It sickens me to think about the amount of money I have been losing per year because of federal/state mileage reimbursement rates. Anyone who argues government employees and/or other privately employed persons are actually making a profit from the current federal/state mileage reimbursement rates are oblivious to the actual costs of owning, maintaining, and fueling an automobile (unless the employee is padding their mileage). For example, my current reimbursement rate from the state of Louisiana is currently .36 cents a mile, that’s up two cents from just three months ago. The residual value of a new automobile could almost be that alone per mile. Remember that this cost is before gas, insurance, maintenance and other wear/tear factors are considered. I understand that depreciation slows after the initial year, but DoD needs a reality check here. Cheap auto insurance coverage in New Orleans cost me $2,400.00 per year. Does this situation stink? Yep, and I'm the one who gets stuck with the gas. I also realize that there is a certain amount of cost that needs to be factored in for my personal use, but when fed/state government requires a person to own a car and have the necessary insurance for employment, either way you pay. FEDup P.S. be careful with the word "prove" I've found that it may show a person's ignorance. FEDup Posted October 20, 2005 10:31 AM
• Sorry DoD, but you missed some key numbers. You left out the other consumables such as brakes, shocks, belts, insurance, etc. You also left out the most important part -- the car itself. You have to amortize it over the miles as well. If 30,000 miles is one third the useful life of the car, assuming a $25K car, that's over $8000 there alone. I'll tell you what, you go into business renting cars providing everything including gas for 40 cents a mile and see how long you stay in business. Working for the Taxpayer GovExec.com reader Posted September 8, 2005 10:57 PM