GSA under pressure to raise mileage reimbursement rate

A labor union is pressing the General Services Administration to follow the lead of the Internal Revenue Service and raise the rate that federal employees are reimbursed for driving their vehicles on official business.

The National Treasury Employees Union is calling on GSA to increase the reimbursement rate from 48.5 cents per mile to 50.5 cents. The new rate -- which would be the highest ever -- would match the mileage standard implemented by IRS at the start of 2008.

GSA said it is considering the rate change but insists that its legally mandated consultation process is not finished.

The agency is permitted by law to establish the rate for federal employees who use their personal vehicles for work. That rate, however, cannot exceed the one established annually for federal tax purposes by IRS. In the past, the GSA has heeded IRS' lead and adopted its rate.

"Many federal employees use their personal vehicles for government work," said NTEU President Colleen Kelley. "Even this modest increase will not fully cover their costs, but it would help."

The union said it wants to avoid a repeat of last year, when GSA waited until February to match IRS' rate change, despite a reported commitment that the effective date would be Jan. 1.

On Nov. 28, Kelley sent a letter to GSA Administrator Lurita Doan urging her to expedite the rate change. Kelley said that request has thus far been ignored.

"Here we are a year later in the same situation," Kelley said. "It is not fair and it is not right to expect federal employees to cover the cost of gas and maintenance from their own pockets. GSA must act immediately to match the IRS rate."

Doan responded to Kelley's letter last week, explaining that the agency has yet to determine the proper 2008 rate. On Dec. 12, 2007, GSA sent requests by e-mail to several labor unions, including the NTEU, seeking their input on the rate increase, Doan said.

By law, GSA also is required to consult with the Defense and Transportation departments on the mileage rate and to issue a report to Congress before a new rate becomes effective.

"GSA is proceeding with this required consultation process," Doan told NTEU. "GSA will issue the new … mileage reimbursement rate in the Federal Register once the consultation process is complete."

NTEU has pressured IRS and GSA nearly every year to increase the reimbursement rate. The union also has called for midyear rate increases each of the past three years, although that request has been honored only once.

In September 2005, following hurricanes Katrina and Rita, IRS made a special one-time adjustment, raising the mileage rate from 40.5 cents to 48.5 cents. GSA followed suit shortly thereafter, although the rate later was reduced at the start of 2006.

The IRS mileage rate is generally changed once a year based on a study by Runzheimer International, an independent contractor based in Rochester, Wis., on the costs of operating a privately-owned vehicle.

While the cost of gasoline has ballooned by nearly 80 cents a gallon since this time last year, prices have dropped considerably in the past few weeks.

Since Jan. 7, gasoline prices have declined 13 cents per gallon at self-serve pumps across the Washington metropolitan region, according to the Daily Fuel Gauge Report from AAA Mid-Atlantic. As of Jan. 29, the average price for a gallon of self-serve regular gasoline in the Washington region was $2.95.

According to federal travel regulations, employees can use personal vehicles for official travel if they obtain permission from their agency. The reimbursement rates apply only to authorized means of travel.

The mileage reimbursement does not apply to employee transfers or relocations, which are designated as transportation expenses, rather than allowances for the cost and operation of a vehicle, according to GSA.

*Proposed rate; now authorized by IRS

** There was no rate change in 1997

Source: General Services Administration