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F I S C A L I M P A C T R E P O R T
SPONSOR Nava
ORIGINAL DATE
LAST UPDATED
2/14/07
2/20/07 HB
SHORT TITLE Revise Public Official Mileage Reimbursement
SB 922/aSEC
ANALYST Propst
ESTIMATED ADDITIONAL OPERATING BUDGET IMPACT (dollars in thousands)
FY07
FY08
FY09 3 Year Total
Cost
Recurring
or Non-Rec
Fund
Affected
Total
0.0 2,856.6 2,250.7 5,107.3 Recurring
General Fund
(Parenthesis ( ) Indicate Revenue Decreases)
Duplicates HB 826
SOURCES OF INFORMATION
LFC Files
Responses Received From
Department of Finance and Administration (DFA)
Department of Health (DOH)
Department of Transportation (DOT)
SUMMARY
Synopsis of SEC Amendment
The Senate Education Committee amendment inserts “for the prior year" after “rate" on page 5,
line 11. The amendment thereby attempts to address DFA’s recommendation that the prior
year’s IRS mileage rate would apply if SB 922 is enacted.
Synopsis of Original Bill
Senate Bill 922 would change the Per Diem and Mileage Act to increase payment for mileage in
a personal vehicle from its current .32 per mile to track the Internal Revenue Service's standard
mileage rate currently at .485 per mile.
FISCAL IMPLICATIONS
The FY08 Executive recommendation for in-state mileage is $5,540.1 at .32 per mile. Increasing
the rate to .485 per mile will cost $2,856.6 in FY08. Using the same base and an estimated
45¢/mile for FY09 yields an estimated FY09 impact for this proposal of $2,250.7.
pg_0002
Senate Bill 922/aSEC – Page 2
SIGNIFICANT ISSUES
SB 922 raises the mileage reimbursement rate to comport with the rate established by the IRS,
currently .485 per mile, as opposed to the current Pier Diem and Mileage Act rate of .32 per
mile. DFA notes that current agency budgets were estimated on the .32 figure and, therefore,
may face a shortfall in FY08 if SB 922 is enacted.
Mileage Rates
Calendar Year:
Rate:
2002 IRS Mileage Rate
36.5 cents/Mile
2003 IRS Mileage Rate
36 cents/Mile
2004 IRS Mileage Rate
37.5 cents/Mile
2005 (Jan 1 - Aug 31) IRS Mileage Rate
40.5 cents/Mile
2005 (Sep. 1 - Dec. 31) IRS Mileage Rate
48.5 cents/Mile
2006 IRS Mileage Rate
44.5 cents/Mile
2007 IRS Mileage Rate
48.5 cents/Mile
Likely 2008 IRS Mileage Rate
45 cents/mile
Likely 2009 IRS Mileage Rate
46 cents/mile
SB 922 would increase the payments by agencies to employees using their personal vehicles for
work-related travel by 44%. Since SB 922 would take effect for FY08 and FY08 budgets were
based upon the .32 per mile figure, agencies may need to find money to fund the difference.
Depending upon the size of the agency, this could result in substantial increases for which
agencies had not budgeted. Some agencies, such as the Department of Transportation that
restrict usage of personal vehicles will face little financial impact while others may be better
situated to absorb the increase. Agencies for which the increase would be problematical would
have to address their travel needs in different methods (car pooling, changing use of personal
vehicles to motor pool vehicles, cutting back on travel, etc.).
DFA expressed the concern that by tying the rate to the Federal rate, future budget requests will
be impacted by an authority outside of the State. Although over the long-term, the rates have
increased, CY06 was less than CY06 and CY08 is expected to be less than CY07. Another
potential issue is that the IRS does not publish the next year’s official rates until the August
preceding the calculation year which may not allow sufficient time to use the official IRS rate in
the budget development process.
ALTERNATIVES
DFA reports that the proposal would be workable for budgeting purposes if the bill specified
using the previous year’s IRS mileage rate.
pg_0003
Senate Bill 922/aSEC – Page 3
DUPLICATION
Duplicates HB 826.
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