Maybe those LRC staffers are leaving because we don’t pay them enough for gas.
Senator Larry Zikmund (R-14/Sioux Falls) placed on the Legislative Executive Board’s Monday agenda a discussion of how much the state reimburses employees for travel.
In response to Senator Zikmund’s inquiry, LRC fiscal analyst Joseph Knofczynski whipped up this memo noting that South Dakota currently pays 42 cents per mile to employees who drive their personal vehicles on business. The state has no formula or schedule for setting that rate; the Board of Finance just picks a number, occasionally. The last occasion was 2015, when the State Board of Finance raised the reimbursement rate from 37 cents to 42 cents. Knofczynski reports that’s equivalent to 52 cents in today’s money.
Knofczynski notes the IRS has set this year’s federal mileage reimbursement rate at 58.5 cents per mile. The IRS updates that rate each year for inflation. The rate actually ticked back from 58 cents to 57.5 in 2020 and 56 in 2021. The rate previously peaked at 58.5 cents in late 2008, then dropped to 55 cents in 2009 and 50 cents in 2010. The federal mileage reimbursement has been above 42 cents since 2005.
The state Finance Board, which consists of the Governor, the elected state constitutional officers, and the chiefs of Finance/Management and Administration, meets almost monthly, but they’ve slacked off on publishing their minutes—no records of proceedings have been posted since November.
At Monday’s meeting, Senator Derby said he’d be hard-pressed to ask for legislators to get more than what state employees get, so he said we ought to raise the reimbursement for everyone. Derby moved to ask that the Board of Finance review the reimbursement rate; that motion carried on a voice vote with just one audible dissent.
How much would an increased mileage reimbursement cost the state? Knofczynski provided a chart showing that, over the last five fiscal years, the state has usually spent around $1.3 million or $1.4 million on gas for employees’ use of personal cars:
Note the 30% drop in Fiscal Year 2021—yay, coronavirus!
If we take $1.3 million as a normal yearly cost, at 42 cents a mile, that’s about 3.1 million miles of state employee travel in private vehicles. Divide that out over about 13,000 state employees, and that’s roughly 240 miles per employee per fiscal year. Of course, a majority of legislators put on more miles than that in just one trip to Pierre, and the typical legislator easily makes over a dozen trips to Pierre per year (at least nine round trips for Session, plus budget address in December, plus at least a couple interim committee meetings…).
Boost the reimbursement to the current federal rate of 58.5 cents per mile, and at the above rates of travel, the state’s total mileage reimbursements for all employees would increase to $1.8 million per fiscal year.