Labor leader seeks boost in mileage reimbursement rate

High gasoline prices have prompted a federal labor union to once again call for an unusual midyear increase in the rate at which government workers are reimbursed for driving their personal vehicles on official business.

National Treasury Employees Union President Colleen Kelley said high gas prices are placing a burden on employees who must drive in connection with their duties -- particularly those at the Internal Revenue Service. The IRS sets the maximum reimbursement rate.

The General Services Administration is permitted by law to establish the rate for federal employees who use their own vehicles for official business, but the GSA-mandated rate cannot exceed the one the IRS establishes, primarily for tax deduction purposes.

At the beginning of the year, GSA set the current rate at the IRS limit of 48.5 cents per mile, matching the rate set in late 2005 when the IRS made a midyear adjustment to raise the rate from 40.5 cents per mile.

But gasoline prices are higher now than they were in late 2005, Kelley argued in a two-page letter to Kevin Brown, acting IRS commissioner. She said the Energy Information Administration and the American Automobile Association are showing prices of more than $3 a gallon, and increases are expected to continue.

While the IRS does not comment publicly on the input it receives on issues affecting tax administration, an agency spokesman said the fall of 2005 was an unusual period in the aftermath of Hurricane Katrina, "so we took the extraordinary step of adjusting mileage rates midyear." GSA referred questions to the IRS, which would have to move first to boost the rate.

The IRS typically makes adjustments once a year and the price of gas is one of several factors considered in the calculation. An independent contractor, Runzheimer International, conducts the annual study for the IRS, based on the cost of new vehicles, the price of gasoline, and insurance and maintenance, among other factors.

NTEU also sought a midyear rate increase in 2006, but that call went unheeded.

A spokesman for AAA Mid-Atlantic said he believes there should be an adjustment because drivers "are feeling the heat" and the "high prices are changing the way we drive."