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Return to Article: Union leader calls for hike in mileage reimbursement rate

• 50410
  

  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
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  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
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  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
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  I hear what the others are saying, but the numbers are still working against the argument that the mileage reimbursement rate needs to be raised. If you take what your gas actually costs out of the reimbursed money, and tuck the rest away for maintenance, I find it hard to believe you'd be so bad off.

  I'll lay out a scenario to prove my point:

  Assume gas stays at $3.50/Gal.
  Assume the vehicle being used gets 15 miles/Gal.

  Let's say a federal employee drives 30,000 reimbursable miles over the course of a couple years.
  1. For those miles they get $12,150 total (30,000 times .405).
  2. For those miles they used 2000 gallons of gas (30,000/15) and so they paid $7,000 for gas ($3.50 times 2000).
  3. They have been paid $5,150 beyond fuel costs to cover normal wear and tear ($12,150 minus $7000)
  4. A nice $50 oil change, every 3000 miles, would add up to $500 for the ten oil changes.
  5. They still have $4,650.
  6. Put on some brand new tires after all that driving. Make them higher priced, at $200 a piece. That's $800 for all four.
  7. The federal employee still has $3,850 for additional wear and tear and ordinary maintenance for those 30,000.

  Why should 30,000 miles of driving cost more than $3,850 BEYOND fuel, tires, and oil changes?

  GovExec.com reader Posted September 8, 2005 12:31 PM
• 12038
  

  To DoD,
  You state the high gas prices are likely to go down in a reasonable amount of time. I highly doubt it. We will be lucky if it stabilizes at a $2.50 average. Although I hope you're correct I am not as optimistic. The oil companies, along with the markets, will use any, and I mean any excuse to drive up the cost. Soon, when something as simple as rain is predicted, the market prices will be driven up because of potential reduction in production. Right now the price of a barrel of oil is LESS than it was prior to Hurricane Katrina. Do you see the prices back where they were before the storm? A 60 cent rise per gallon in two days after the storm, only a nickel reduction since, it is all about greed.

  Mileage reimbursement is a calculated formula likely based on several factors with the price of fuel being a significant factor. Sorry, but the price of fuel has not only risen a little but a lot and that should now be a factor adjustment affecting the formula for a mileage reimbursement increase.

  Dave Posted September 7, 2005 11:07 PM
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  DOD,

  I'd be glad to let you do my extra driving at that rate and then see how you feel a couple of years later when you have to replace the tires, almost twice as many oil changes, tune-ups not to mention the parts that fail that cost literally hundreds of dollars each time. For a newer vehicle, you lose your 3 year 36000 mile warranty much sooner as well. I'm trying my best to get a government vehicle because I can tell you, IT IS NOT WORTH IT, AND I CANNOT AFFORD IT.

  We need to help Katrina victims, but my family also needs to eat.

  GovExec.com reader Posted September 7, 2005 1:50 PM
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  I think increasing the mileage reimbursement rate is completely unnecessary. First of all, the high gas prices are likely to go down in a reasonable amount of time.

  But regardless of what gas prices might be in the near future, consider how much $0.405 per mile really gives you, even with the high prices. If your automobile gets just 10 miles per gallon, you'll be getting $4.05 reimbursement per gallon. That's approximately $1.00 more than what you're probably paying for the gallon of gas. So your gas cost is covered and you're still getting some money towards wear-and-tear on your car. And I'd say that the rate of 10 miles/gallon is much worse than what most cars actually get, so this is really a worst case scenario. In a more realistic scenario, if a car gets 15 miles per gallon, the owner gets more than $6.00 per gallon. Even if they are paying $3.50 for a gallon of gas, they'll still get $2.50 for wear-and-tear. This is more than reasonable.

  I say, don't up the mileage reimbursement rate. Why on Earth should taxpayers foot the bill for such an unnecessary expense, especially when we need to be putting our tax money to rebuilding the lives of those devastated by Katrina and a whole host of other important initiatives?

  GovExec.com reader Posted September 7, 2005 8:24 AM