Counties, cities pay more than state for mileage

Many counties and local governments could save hundreds of thousands of dollars annually by changing how much they reimburse employees for mileage to match what the state of Ohio pays, a Dayton Daily News investigation found.

The difference in mileage rates is up to a dime per mile. Counties such as Montgomery pay the Internal Revenue Service rate of 55.5 cents per mile for every mile an employee drives for work in his or her personal vehicle. Ohio pays its workers 45 cents per mile.

Those dimes add up. For every million dollars spent on mileage – Montgomery County spent $1.1 million in 2011 – switching from the IRS rate to the lower state rate could save about $189,000.

The Daily News reviewed mileage reimbursement rates for five area counties and seven area cities. Rates employees are reimbursed for mileage vary widely. Counties were split: Clark and Montgomery both pay the IRS rate, Greene and Warren pay the state rate and Butler pays 51 cents a mile.

Cities mostly pay the IRS rate, though Hamilton pays 51 cents a mile and Beavercreek pays 45 cents.

Meanwhile, private sector businesses generally pay less.

“The average company, private sector company, does not pay the IRS rate,” said Kevin Winters, president and founder of Company Mileage, which handles mileage reimbursement for about 120 companies and agencies.

The IRS rate is a national rate, and the actual cost of mileage varies regionally, he said. In the Midwest, he said the average is in the “high 40s.”

“An intelligent company will actually look at what that right rate is,” he said.

People taking their lunch break downtown on Courthouse Square earlier this week had mixed feelings. Some, like Larry Stauffer of Beavercreek, feel governments should pay a lower rate.

“The municipalities are clearly in financial difficulty,” he said.

Others like the idea of saving money, but aren’t eager to take it from employees.

“It’s one of those things, you want the county doing what’s right for the county, but on the other hand … it seems like for those government employees, people like that, this seems like an awful hard time for them,” said Joe Snyder of Kettering.

The IRS last changed its mileage rate in July 2011, from 51 cents to 55.5. It usually sets the rate once per year based on an annual study of the fixed and variable costs of operating a vehicle. This is the maximum amount that can be reimbursed tax free.

Counties by far spend more on mileage than area cities, driven largely by job and family service caseworkers and, to a lesser extent, developmental disabilities agency workers.

Clark County raised its mileage rate from 40 cents to 48 cents in 2007, then raised it in mid-2011 to track with the IRS rate.

“We’ve never discussed it,” said Clark County Commission President John Detrick, who has served 16 years on the board. He said the commissioners acted on advice from the county administrator when setting mileage rates.

Montgomery County Commission President Judy Dodge said when contacted by the Daily News that the county’s rate has followed the IRS for years with little discussion. She looked into it, then called back and said the area’s largest county is sticking with IRS guidelines largely because union employees are guaranteed the higher rate in their contracts.

“You can’t have one (group of workers) at 55.5 and others at 45,” she said. “It wouldn’t be fair.

“If we did not have them use their own personal vehicle, and we used a fleet, it would be millions of dollars we’d be out.”

Butler County Administrator Charles Young said mileage rates have not been discussed in his three months with the county, but the county’s precarious budget is a talking point.

“Certainly this is one (thing) that would be considered,” Young said, adding that the county will have to determine “what’s reasonable not only to the taxpayers but to the employees you’re asking to carry out the mission, and I assume this will be the subject of discussion along with a long list of things that will be looked at to achieve savings.”

County commissioners don’t control reimbursement for all county employees. Some independent county boards set their own rates. Greene County Developmental Disabilities and the county health district pay 10 cents more than other county offices in Greene, as does Warren County’s mental health board.

“We just basically follow what the IRS posts for mileage reimbursement,” said Greene County Developmental Disabilities Finance Director Frank Latona. “We make a lot of home visits. Our staff uses their cars a lot for work and we want to make sure they’re compensated appropriately for what we’re asking them to do.”

Latona said the agency spent $57,527 last year on mileage reimbursement for 72 people. For every $100,000 reimbursed at the IRS rate, an agency would save nearly $19,000 by switching to the state rate.

Greene County Commission President Rick Perales said he wishes he could give employees more, but “you have to make ends meet so we have to make some tough decisions.”

“I think it’s safe to say we feel pretty comfortable that we’re providing mileage reimbursement at a reasonable rate and in keeping with being responsible with management of the overall general fund,” Perales said.

Union contracts often supersede county rates. Butler County Job and Family Services workers, for example, get the IRS rate, which is several cents higher than the county rate.

“I feel if that’s the rate the IRS has established, I don’t think it should be any less,” said Marcia Knox, regional director for AFSCME, which represents many area public employees. “It’s not that these folks are making so much money they can afford to get a car every two years or something like that.”

She said the employees are saving the counties money because otherwise they would have to buy vehicles for caseworkers.

The state of Ohio’s mileage reimbursement rate is set at 75 percent of the IRS rate or not less than 45 cents, which is where it’s been since 2009.

“(This is) a reasonable reimbursement rate that’s fair both to state employees and to Ohio citizens who pay the bill,” said Tom Betti, communications manager for the Office of Budget and Management.

The cost of mileage for the state has dropped from $12.7 million in 2009 to $7.2 million in fiscal year 2012, which ended in June.

Betti attributed this to “a number of factors” such as “more efficient ways of doing business that require less driving; a conscious effort by employees and their managers to reduce the cost of travel; fewer state employees overall.”

GOVERNMENT MILEAGE RATES: What public employees get paid per mile for using their own vehicle on the job:

IRS rate 55.5 cents
State of Ohio 45 cents
Butler County 51 cents
Clark County 55.5 cents
Montgomery County 55.5 cents
Warren County 45 cents
Greene County 45 cents
Dayton 55.5 cents
Hamilton 51 cents
Springfield 55 cents
Middletown 55.5 cents
Kettering 55.5 cents
Beavercreek 45 cents
Huber Heights 55.5 cents

Source: Information obtained from governments


To get this story, the Dayton Daily News over several weeks assembled two years of financial data from more than a dozen local and state governments, then compared mileage reimbursement benefits. A reporter then asked decision-makers why they were more or less generous than other area leaders and what impact they thought their decisions would have on public funds.