6/17/08: NTEU National President Colleen Kelley described as timely and necessary legislation introduced today by Rep. John Lewis (D-Ga.) that would boost to 70 cents per mile the reimbursement rate for the personal use of a vehicle for business reasons. The current rate set by the Internal Revenue Service (IRS) is 50 ½ cents per mile.

The Lewis measure supports a call by President Kelley late last week in a letter to IRS Commissioner Douglas Shulman for a mid-year increase by the IRS in the reimbursement rate; it also mirrors pending Senate legislation which would boost the rate to 70 cents per mile.

“Everyone understands that record gas prices are taking a heavy toll on key segments of our economy,” Kelley said, “and these prices are hitting particularly hard those people, in both the public and private sectors, who have to travel in their own vehicles to perform their work duties. The time for effective action by the federal government to provide some relief is right now.”

A great many federal workers, including NTEU-represented employees at the IRS, as well as those at a number of financial regulatory bodies and other federal agencies, of necessity use their personal vehicles in the performance of their jobs.

The reimbursement rate for federal employees is set by the General Services Administration (GSA), but cannot exceed the amount set by the IRS as the maximum rate allowed as a business deduction. This legislation would make that adjustment automatic with no action necessary by GSA.

A mid-year adjustment by the IRS, which generally sets the rate for the next 12 months late in the year, would not be unprecedented. In 2005, then-IRS commissioner Mark Everson used his authority to honor a request from NTEU that the maximum rate be increased. Then, as now, gas prices were rising rapidly and with little prospect they would moderate.

“NTEU will continue to press on both tracks, supporting the House and Senate legislation and pursuing a mid-year increase by the IRS,” Kelley said. “This is a vitally-important issue that is not going away.”