LITTLE ROCK — The state’s chief fiscal officer on Thursday temporarily increased the maximum-authorized state mileage reimbursement rate for the use of privately-owned vehicles on official state business for state employees from 42 cents per mile to 52 cents per mile.
The increase in the maximum mileage reimbursement rate applies to executive branch agencies, and state boards and commissions, said Scott Hardin, a spokesman for the state Department of Finance and Administration.
State Department of Finance and Administration Secretary Larry Walther said Thursday that the temporary increase is due to increasing gas prices and is effective immediately for reimbursement of travel on or after Thursday.
Reimbursement for travel prior to Thursday is authorized at the rate of 42 cents per mile, he said.
“It is the responsibility of the agency director to ensure that their agency budget is sufficient to fund this increase in mileage reimbursement,” Walther wrote in a memo dated Thursday to state agencies, state boards and commissions and the state’s institutions of higher education.
“The agency director may authorize reimbursement for the use of privately-owned automobiles at amounts less than the authorized state maximum rate if the agency budget is insufficient to fund the increase in rate,” Walther said in his memo. “If your agency decides to reimburse at a rate of less than fifty-two
(52) cents per mile, please notify your [finance department] budget analyst before implementation of the rate increase.”
He said the state Office of Accounting will continue to monitor average gasoline prices and the reimbursement rate will be reevaluated for possible reduction when the average gasoline price declines below $3.50 per gallon
According to the AAA, the average price of gasoline in Arkansas on Thursday was $3.86 per gallon, down from $3.90 per gallon on the previous Thursday, but up from $3.19 per gallon a month ago from Thursday and $2.68 per gallon a year ago from Thursday.
The state law that authorizes Walther to increase the maximum-authorized mileage reimbursement rate for state employees is Arkansas Code Annotated 19-4-03, Hardin said.
He said the state’s executive branch agencies paid $4,218,774 in mileage reimbursement in fiscal 2021 that ended June 30, and that represented about 100,447 reimbursed miles. By applying the increased rate of 52 cents to about 100,447 reimbursed miles, the state’s executive branch agencies would pay a total of $5,223,244 over the year — an increase of $1,004,470 — he said.
Mileage reimbursement may be paid through all of the state government’s revenue sources including general revenue, special revenue and federal revenue, Hardin said.
Arkansas Game and Fish Commission Director Austin Booth said Thursday that Walther’s action to increase the maximum-authorized mileage reimbursement rate for state employees “does not apply to us, but our policy states that we will match it.”
The state Department of Transportation is considering increasing the mileage reimbursement rate for its employees from 42 cents per mile to 52 cents per mile, department spokesman David Parker said Thursday.
Hardin said the majority of the state’s higher education institutions follow the state’s maximum mileage reimbursement rate, but they have discretion and may adjust the rate under a special authorization included in Arkansas Code Annotated 19-4-03.
Walther’s action to boost the maximum authorized state mileage reimbursement rate came after John Bridges, executive director of the Arkansas State Employees Association, asked him in a letter dated March 10 to consider raising the rate.
Bridges said Thursday “this is great news.
“ASEA is very pleased that Governor Hutchinson agreed to help lessen the impact of inflationary gas prices on our hardworking state employees,” he said in a written statement.
In his letter dated March 10 to Walther, Bridges thanked Walther for Hutchinson authorizing executive branch state employees to receive a 2% cost-of-living adjustment in their salaries last month. He said the recent surge in inflation has hurt everyone’s pocketbook and the cost-of-living increase “was a pleasant surprise that will certainly help.”
Bridges wrote that another inflation-related expense that has adversely affected state employees is the mileage reimbursement rate. Many state employees are asked to use their personal vehicle to perform their job duties, and those employees receive a mileage reimbursement to compensate them for the cost of fuel and vehicle maintenance, which has remained the same rate since 2009, he said.
“With fuel prices setting all time record high levels each day … the outdated reimbursement rate of 0.42 per mile is an unjust burden on employees using their own vehicles,” Bridges wrote in his letter to Walther.
Over the past 20 years, some state employees also have periodically grumbled about state legislators getting paid a higher rate for mileage reimbursement than state employees receive.
The mileage reimbursement paid by legislative agencies to state lawmakers is 58.5 cents per mile, which was increased from 56 cents a mile Jan. 1, according to officials for the legislative agencies. They said they follow the mileage reimbursement rate of the U.S. General Services Administration.
On Feb. 17, Hutchinson announced that Arkansas’ executive branch employees would receive 2% cost-of-living raises, effective Feb. 6, in their paychecks as an answer to inflationary pressure.
At that time, the Republican governor said the 2% cost-of-living adjustment for executive branch employees was the first cost-of-living raise granted to executive branch employees since 2012 and is not in lieu of merit raises for these employees, which will be considered later. He also said the 2% cost-of-living adjustment will be funded through the state’s Performance Fund or state agencies’ general revenues as needed.
About 22,500 state employees will receive the 2% cost-of-living adjustment and the total cost will be about $24 million a year, including $10 million a year in state general revenue, a state official said last month. The 2% cost-of-living adjustment will increase the average salary for these employees from about $46,588 a year to about $47,519 a year.
State officials subsequently said they had to revoke the raises from about 1,350 of Arkansas’ approximately 22,500 executive branch employees. These employees will instead receive lump sum payments totaling $1.4 million on June 17, because state law requires that any employee at the maximum of their pay grade receive the payment at the end of the fiscal year, state officials said. The lump sum payments for these employees won’t extend into fiscal 2023, which starts July 1.
In the fiscal session that adjourned Tuesday, the Republican-dominated Legislature stripped the governor of authority under state law to grant up to 2% cost-of-living increases to state employees in the future.
State lawmakers took that action through special language added to Act 209 of 2022, the appropriation for personal services and operating expenses for the state Department of Transformation and Shared Services for fiscal 2023.