New per diem rates, rules hamper some travelers

Government travelers are discovering that with new per diem rates and reimbursement rules, waiting until the last minute to plan trips is a big mistake.

The government has divided up metropolitan areas so that per diem rates in suburbs are different from rates in the hearts of cities. In addition, lodging taxes and dry cleaning costs are now separate reimbursable expenses.

The biggest change travelers are dealing with is the per diem rate change in 23 metropolitan areas and 69 smaller communities. Where there was one per diem rate for these communities last year, now there are two or more.

For example, last year the per diem rate for the Washington, D.C. metropolitan area was $168 ($126 for lodging and $42 for meals and incidental expenses). This year there are separate rates for the city of Washington ($161) and suburban areas in Montgomery County, Md. ($153); Prince George's County, Md. ($147); Alexandria, Va. ($168); Arlington, Va. ($157); Loudoun County, Va. ($113); and Fairfax County, Va. ($160).

In addition, rates across the country now appear lower at first glance because lodging taxes are no longer included in the government lodging rates. Travelers this year must claim lodging taxes as a separate reimbursable expense on their travel vouchers, said Bill Rivers, acting director of the travel management policy division at the General Services Administration. GSA sets the per diem rates in the continental United States. Tax is still included in the rates for lodging outside the continental U.S.

Some of the new rates, which factor in both the removal of taxes and the break-out of suburbs from cities, have surprised federal travelers.

Steve Leone, a federal contractor at Hanscom Air Force Base in Massachusetts, thought there was a typographical error when he saw the 1999 lodging rate for Nassau County, New York. Leone's business unit travels frequently to the county. Last year the government lodging rate was $198, the same as for everywhere in the New York City metropolitan area. This year Nassau County has its own lodging rate: $70.

"You cannot find a reputable establishment in Nassau County that has a government room rate of $70," Leone said. "This is New York."

Leone wasn't the only one whose jaw dropped at the rate change in Nassau County. The U.S. Merchant Marine Academy in Kings Point, N.Y., called GSA to complain about the new rate.

The problem, said Rivers, is that by law, GSA only surveys two- and three-star hotels on the Federal Emergency Management Agency's list of facilities that comply with the Hotel and Motel Fire Safety Act of 1990. The three hotels in proximity to the Merchant Marine Academy were not on the list. GSA, the academy, the hotels and now the New York Federal Executive Board are working together to come up with a higher rate for Nassau County.

Federal traveler Ron Foster was struck by the per diem rate drop in St. Petersburg, Fla. Last year, when St. Petersburg and Tampa shared a per diem rate, the maximum lodging rate was $103 during this part of the year. Now that the two rates have been separated, St. Petersburg's lodging rate is $59 during this part of the year.

"I challenge those who make the rules to stay a week in St. Petersburg within the 1999 per diem rates," Foster says.

In other parts of the country, hotels have complained to GSA about the removal of taxes from per diem rates. In Texas and California, many hotels were already separating taxes from the rates, Rivers said, even though they should have been including taxes before this year. So some hotels must lower their rates if they want to fall under the maximum government rates. Not all are willing to do so.

Others are. The Chase Suite Hotel in Orange County, Calif., for example, lowered its government rate from $80 to $75. Government and government contractors are some of the hotel's most important customers, said Mike Serle, director of sales for the hotel. The hotel lowered the government rate even though the hotel raised most of its other rates by $7.50 this year, Serle said.

In addition to listing lodging taxes as a separate expense on their travel vouchers, government travelers this year can claim dry cleaning as a separate expense. In the past, dry cleaning was covered under the $2.00 per day allowed for incidental expenses.

"We determined that was not an adequate compensation," Rivers said. Now, employees who are on travel for at least four nights can claim dry cleaning as a separate expense.

Federal travelers unhappy with per diem rates need to contact their agencies' travel policy offices. Then those offices can submit a formal petition for a per diem change with GSA. That process takes time.

The Federal Travel Regulation offers another option: If a traveler can't find a room within the per diem, agencies are allowed to reimburse the traveler's cost up to 300 percent of the maximum per diem.