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August 2004
Mileage Reimbursement for Personally
Owned or Leased Motor Vehicles

Transmittal Letter


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State employees who drive a personally owned or leased vehicle in their duties or for other official state business travel are reimbursed for driving expenses on a per-mile basis. The Comptroller of Public Accounts sets the mileage reimbursement rate within the allowable range established by the Legislature and not higher than the rate allowed by the Internal Revenue Service (IRS) under the federal income tax regulations as of August 1 preceding the start of the fiscal year.

The Texas mileage reimbursement rate for the 2004-05 biennium is 35 cents, the upper limit of the range of 25 to 35 cents per mile allowed by the Legislature in the current budget [1]. The current federal standard mileage rate established by the IRS is 37.5 cents per mile and applies to taxpayers using their personal vehicle for business.

Since 1990, the state budget bill has set the state rate at the federal rate provided the federal rate is within the allowable state range. The Comptroller of Public Accounts determines and announces the Texas mileage reimbursement rate for a fiscal year to the state agencies as soon as possible after August 1 of the preceding year. Only twice since 1972 has the state rate equaled the federal rate.

There has been only one instance since 1995 that the state rate hasn’t been as close to the federal rate as possible and still within the range allowed by the Texas Legislature. That occurred in 2002 when the federal government raised its rate after the Texas rate had been announced. In August 2002, the state reimbursement rate was certified at 34.5 cents per mile, matching the then-current federal rate. In October 2002, the IRS announced a new federal rate of 36.5 cents. In August 2003, the Comptroller adjusted the state rate to 35 cents where it has remained through 2004.

The current federal mileage reimbursement rate released on October 15, 2003, is 37.5 cents per mile.

Texas Mileage Reimbursement Rate History

Prior to 1990, Texas statute did not tie the state reimbursement rate to federal guidelines or set a range. Instead, the rate was determined by the Legislature. Between 1972 and 1989, the federal government reimbursement rate exceeded the Texas rate in nine of 18 years, the state rate exceeded the federal rate in seven years, and the rates were the same in two years. (Exhibit 1)

Exhibit 1

The Legislature began tying the state rate to the federal rate in 1990[2] and also provided a rate range to allow agencies budgetary discretion. The data currently collected to process travel vouchers are not sufficient to determine which agencies have established a rate other than the rate set by the Comptroller.

Since 1990 the federal rate has exceeded the Texas rate, although the Texas rate has been set at or near the upper end of the legislatively determined range. The rate range established by the Legislature from 1994 to 2001 was between 25 cents and 28 cents. During that eight-year period, Texas always paid 28 cents, the maximum rate allowed in the range.

In 2002, the rate range was extended to the current span of 25 cents to 35 cents. The range extension was due to a number of factors including higher automobile operating costs, a higher federal reimbursement rate and the spike in gas prices following 9/11.

Statewide Mileage Reimbursement Spending

Between 1982 and 2003 there were six state mileage reimbursement rate increases and one rate decrease, in 1987. During this 21-year period, total spending for in-state[3] and out-of-state[4] mileage reimbursement increased by 65.3 percent, or from $22.7 million to $37.5 million[5] (Exhibit 2). Over the same time period, total travel expenditures (which include meals, lodging, automobile mileage, aircraft mileage, public transportation fares, parking fees and incidentals) have increased 80.5 percent. Because other travel costs increased faster, mileage reimbursement costs as a share of total travel expenses declined from 41.9 to 38.4 percent between 1982 and 2003. By comparison, total net expenditures for the state grew 465.4 percent, or from $12.1 billion to $68.3 billion from 1982 to 2003. Also during this time, the number of full-time employees (FTEs) increased 77.2 percent so that the average number of miles driven per FTE decreased from 646 miles to 396 miles, or by 38.7 percent.

Exhibit 2

Setting of the Federal Mileage Reimbursement Rate

The IRS employs a contractor to establish the federal mileage reimbursement rate.[6] The contractor, Runzheimer International, conducts a nationwide survey and collects vehicle-operating information under the guidance of the IRS. The company has developed the federal mileage reimbursement rate since 1981. The data gathered by Runzheimer and the exact composition of the formula to weigh the items to determine a mileage reimbursement rate are considered proprietary by the IRS.

Based on information posted on Runzheimer International’s Web site, it appears that insurance, license, title, vehicle taxes and depreciation costs are considered fixed costs in the mileage reimbursement rate formula. Variable costs include fuel and oil per mile, tires per mile and maintenance items such as lubrication, filter, spark plug or windshield wiper replacement on a per-mile basis.[7]

The federal reimbursement rate increased from 12 cents per mile in 1972 to 37.5 cents in 2004. From 1972 until 1987, the Texas reimbursement rate was higher than the federal rate seven times. Since 1987, the federal rate has exceeded the Texas rate even when the federal rate decreased in 1999 and 2003.

Mileage Reimbursement Rates in Other States

A comparison of the Texas mileage reimbursement rate with the rates of five of the largest states in the nation and four of our neighboring states shows that Texas’ current rate is roughly average. Texas’ rate is lower than that used in four of those states and is higher than in five. Of the states with large populations, New York, Illinois and Pennsylvania reimburse at the federal rate level of 37.5 cents per mile (Exhibit 3). California’s rate is 34 cents per mile, but this rate could change since collective bargaining agreements and union contracts can include provisions for the reimbursement of state employee travel. Florida has a rate of 29 cents per mile for its employees, with the exception of insurance examiners whose reimbursement rate is pegged to the federal rate. Oklahoma is the only state neighboring Texas that applies the federal mileage rate of 37.5 cents. Arkansas pays 34 cents, and New Mexico pays 32 cents per mile. Louisiana increased its rate from 32 to 34 cents per mile, effective July 1, 2004, due to high gasoline prices.

EXHIBIT 3
State Mileage Reimbursement Rates in 2004
State Rate (per mile)
California 34 cents
Florida 29 cents*
New York 37.5 cents
Illinois 37.5 cents
Pennsylvania 37.5 cents
Louisiana 34 cents**
Oklahoma 37.5 cents
Arkansas 34 cents***
New Mexico 32 cents
* Except for insurance examiners in the Department of Financial Services; their rate is pegged to the federal rate.
** Increased from 32 cents due to high gas prices, effective July 1, 2004.
*** Temporarily, will return to 31 cents per mile when gasoline price drops to $1.70 or lower.

All of these states and Texas[8] require state employees to look for the most economical means of travel. Pennsylvania automated parts of this evaluation process by using a Web-based system that manages travel arrangements. The system prompts employees to do a “best price analysis” before selecting a travel arrangement. Management approval is required when the traveler does not choose the least expensive option displayed.

While all nine states and Texas give state employees the option of using common carriers like bus, train or airplane, only Oklahoma, Florida, Illinois, California and New York maintain a motor pool that employees must use for business travel (subject to availability). In general, the cost per mile of operating a motor pool vehicle is lower than the mileage reimbursement rate since the state can be self-insured, can buy replacement parts in bulk, and can make sure employees maximize use of the automobile. As part of using the motor pool, Illinois also requires employees to provide proof of automobile insurance. New York’s employees are covered under its Public Officers’ Law that provides liability coverage for motor pool vehicles used by state employees. Although not operating a motor pool, Arkansas, California and New Mexico also verify that their employees carry car insurance before allowing employees to operate their private vehicles on state business.

Using commercial car rental companies is another means available to state employees in the states included in this survey. New York, Florida, Illinois, California, Oklahoma and Texas have contracts with rental car companies. The daily rental rates for the various vehicle types are comparable and range from $32 for a compact to around $45 for a full-size car. California’s rental agreement sets maximum rates for compact cars of $49 to $65 depending on the rental car company. There is usually no mileage limit as long as the travel takes place within the rental state.

The survey also revealed that none of the nine states uses a mileage reimbursement rate range or has laws prescribing how to adjust the mileage rate following unexpected economic upsets. A bill was introduced in Florida this year that would have established ranges for all travel expenditures, including the mileage rate, allowing heads of each branch of government to set a reimbursement rate within the range. The bill also would have required the Department of Financial Services to adjust all travel-related reimbursement rates based on growth in Consumer Price Index (CPI). The bill did not pass into law.

Louisiana’s Office of State Purchasing and Travel surveys other southern states’ mileage rates and calculates an average. It evaluates what the state can afford before setting the reimbursement rate.

Vehicle Operating Cost Trends

Between 1981 and 2001, the national average cost per mile of owning and operating a compact, intermediate or full-size car grew by more than 90 percent (Exhibit 4), while costs for a subcompact increased just over 70 percent. During the same period, the federal mileage reimbursement rate increased 72.5 percent, from 20 to 34.5 cents per mile. Consequently, only the increased operating costs paid by owners of subcompact cars would have been covered by the federal rate increases. For the operators of compact, intermediate and full-size automobiles, the growth in the federal mileage rate fell short of paying for the total cost. More recently, between 1996 and 2001, increases in operating costs ranged from 0.6 percent for a subcompact car to 28.4 percent for a compact pickup[9]. An overall average of all vehicle types in the same time period showed a 15.3 percent growth of operating expenses. The federal reimbursement rate increased 11.3 percent, during the same period.

Exhibit 4
Cost of Owning and Operating Automobiles, Vans and Light Trucks
(Cents per Mile)
Vehicle Size 1981 1984 1991 1996 1998 2001 1981-2001 1996-2001
Subcompact 18.9 22.7 28.9 32.0 31.3 32.2 70.4% 0.6%
Compact 21.4 23.3 29.5 35.8 35.6 42.3 97.7% 18.2%
Intermediate 23.8 27.8 33.4 44.3 44.3 46.9 97.1% 5.9%
Full-size 26.6 30.6 37.9 46.3 49.2 51.1 92.1% 10.4%
Source: Federal Highway Administration - Our Nation's Highways (total costs over 5 years, based on 70,000 miles; includes depreciation, financing, insurance, registration fees, taxes, fuel maintenance and repairs)

A variety of factors contribute to increased operating costs. Some factors, such as depreciation, vehicle taxes, title and license fees, and vehicle maintenance costs, show a general upward trend over the past decade. Gasoline prices, on the other hand, have fluctuated over the years. Fuel cost and fuel taxes together accounted for 13 to 14 percent of total operating costs between 1996 and 2001 (Exhibit 5). Thus, there has to be a significant change in gas prices for fuel costs to greatly affect the operating costs per mile. On at least two occasions, gasoline prices dropped enough to contribute to a decrease in the federal mileage reimbursement rate. Annual average fuel costs dropped 17.3 cents a gallon during 1998, and subsequently the IRS issued a lower reimbursement rate for 1999. Also in 2003, the federal rate decreased by half a cent following declining gasoline cost in 2002.

EXHIBIT 5
Ownership and Operation Costs By Category-Intermediate Size Vehicle
(Cents per Mile)
Category 1996 1998 2001
Repairs 1.1 0.9 0.9
Depreciation 10.1 13.7 16.4
Fuel Tax 1.2 1.8 1.9
Fuel Cost 4.9 4.0 4.2
Financing 5.1 6.7 7.0
Maintenance 3.5 5.3 2.3
State Fees 1.4 1.3 1.4
Insurance 17.0 10.6 12.7
Total 44.3 44.3 46.8
Source: Federal Highway Administration - Our Nation's Highways

A closer look at the composition of ownership and operation costs reveals that expenses for depreciation and insurance make up more than half of those costs (Exhibit 5). Per mile costs of repairs and state fees changed only slightly between 1996 and 2001, while fuel tax, fuel cost, financing and maintenance costs per mile varied more.

National averages have to account for all possible driving conditions in the country. To get a more local perspective on automobile operating cost, Texas Building and Procurement Commission (TBPC) motor pool vehicle data can provide a Texas-specific yardstick of costs. TBPC cost numbers represent travel in Texas, reflecting local driving conditions including factors such as environment, climate and road congestion. However, these data underestimate private automobile costs since they do not include depreciation, insurance, license and registration fees and fuel tax expenses, which are not included in the expenditures for state vehicles.

TBPC supplied average cost data for all vehicles in the motor pool classified as passenger cars, SUVS, light trucks or minivans. A state-employee owned automobile used for state travel is most likely to be one of these four types of vehicles. The overall costs for these four categories taken together result in an average cost per mile of 14 cents in fiscal year 2004.

To adjust the TBPC Texas vehicle operating costs to also include estimated costs for privately owned vehicles, the Comptroller’s Revenue Analysis research analysts assumed the following driving and vehicle profile to be representative of automobile usage and ownership by state employees:

  • Average miles traveled per year: 20,000 miles;
  • Average miles per gallon: 20 miles/gal;
  • Capital Cost: vehicle purchase cost and financing less trade-in value after 5 years[10]
  • Insurance: 2001 annual average cost for Texas $735.46;
  • License and registration: estimated average cost for Texas $70; and
  • Typical Vehicle: Ford Taurus, average cost 19,945.

Under these assumptions and based on full cost reimbursement, operating costs in Texas could approach 43.4 cents per mile[13](Exhibit 6). This amount is 8.4 cents above the current Texas rate and 5.9 cents higher than the federal rate.

EXHIBIT 6
Full Cost Model
(Based on 2004 Ford Taurus)
  Per mile cost  
Fixed Cost $0.2309 Capital Cost
  $0.0370 Insurance
$0.0035 License and registration
Total Fixed Cost $0.2714  
 
TBPC-Variable Cost $0.0603 Operating cost (maintenance, repair, other expenses)
  $0.0834 Fuel cost per mile[11]
Fuel tax $0.0192  
Total Variable Cost $0.1629  
 
Total Cost $0.4343  
Source: Texas Building and Procurement Commission, National Association of Insurance Commissioners[12]

However, of the cost components considered in the full cost model, some fixed cost items are incurred by the vehicle owner whether the vehicle is used for state travel or not. For example, Runzheimer International, the IRS contractor, reimburses only 71.4 percent of fixed costs (including depreciation, insurance, license, registration and tax) because it considers vehicles to be for business use on only five of seven days a week, or 71.4 percent of the time. Adjusting the fixed cost figures in this example by this percentage indicates a reimbursement rate of 35.7 cents per mile.

The difference between full cost reimbursement and partial cost reimbursement stems largely from the fact that many vehicle fixed costs are established based on time rather than mileage. Insurance is charged per month, license and registration fees are annual charges and even depreciation is largely independent of usage. An alternative approach to calculating a mileage reimbursement rate would be for Texas to pay for only that portion of time-based fixed costs that are due to mileage traveled while on state business.

Using the same Ford Taurus as in the full cost model and an average travel speed on Texas roadways of 43.3 mph,[14] the capital cost of operating a motor vehicle is $0.0122 per mile.[15]Treating the other time-based charges in a similar manner means time-based fixed costs total $0.0144 per mile.

Yet, there is a portion of fixed costs that are directly dependent upon miles traveled because additional miles accumulated on a vehicle reduce its resale value. To estimate this effect, a key consideration is the average number of miles driven per state employee claiming mileage reimbursement, which in 2003 was 2,800 miles.[16] These additional miles added to an employee’s vehicle decrease the value of the vehicle. Depending upon the age of the vehicle, in the case of the Ford Taurus, an additional 2,800 miles would decrease the trade-in value of the vehicle by $101 to $235 a year. This implies a cost ranging from $0.0361 to $0.0839 per mile.[17] Assuming the highest cost case, this implies a total fixed cost charge of $0.0983 per mile. Adding in the variable costs results in a total cost of $0.2612 per mile (Exhibit 7).

EXHIBIT 7
Time-based Cost Model
(Based on 2004 Ford Taurus)
  Per mile cost  
Time-based Fixed Cost $0.0122 Time-based Capital Cost
  $0.0020 Insurance
  $0.0002 License and registration
Mileage-based Fixed Cost $0.0839 Mileage-based Capital Cost
Total Fixed Cost $0.0983  
 
TBPC-Variable Cost $0.0603 Operating cost (maintenance, repair, other expenses)
  $0.0834 Fuel cost per mile
Fuel Tax $0.0192  
Total Variable Cost $0.1629  
 
Total Cost $0.2612  
Source: Texas Building and Procurement Commission, National Association of Insurance Commissioners

Another approach to examining Texas-specific operating cost data employs the same figures used by Runzheimer International in preparing average national vehicle operating costs for the IRS. Runzheimer International provided to the Comptroller comparable operating cost statistics in Texas and in the nation.[18]

For Texas, using the representative Ford Taurus, these data show a variable cost per mile of 13.8 cents compared with 14.6 cents for the national average. The fixed cost portion, which includes insurance, license and registration, ad valorem tax, and depreciation, equals $414.75 per month in Texas and $467.75 for the U.S. Continuing the assumption of annual average mileage of 20,000 miles, this equals a fixed cost per mile of 24.9 cents in Texas and 28.1 cents for the national average. In total, operating and owning this representative vehicle in the Lone Star state costs 38.7 cents per mile, according to Runzheimer. This is four cents below the national average of 42.7 cents per mile for this representative vehicle.[19]

Although the exact calculation of the federal reimbursement rate is based on multiple vehicle types and mileage levels, scaling the national mileage rate for this representative vehicle to the IRS rate of 37.5 cents per mile means reducing fixed and variable operating costs by 12.2 percent. Making this same reduction in the total fixed and operating costs of this vehicle in Texas results in a rate of 34.0 cents per mile, a rate 3.5 cents per mile less than the current IRS rate.

Summary

The 2004 Texas mileage reimbursement rate is 35 cents per mile. It is two and a half cents below the current federal mileage rate established by the IRS of 37.5 cents per mile. It is, however, at the maximum level allowed by the range set by the Texas Legislature. In 2003, the state of Texas spent $37.5 million on mileage reimbursements for in-state and out-of-state travel. The total spending for mileage claims constitute 38.4 percent of all travel expenditures.

In comparison to the mileage rates in five of the largest states in the nation (New York, California, Illinois, Florida, Pennsylvania) and four of our neighboring states (Arkansas, Louisiana, New Mexico, Oklahoma), the Texas rate is in the middle. The mileage rates of the other states range between 29 cents in Florida and 37.5 cents in New York, Illinois, Pennsylvania and Oklahoma. Some states maintain a motor pool for state employees. And while all states require the use of the most economical means of transportation, only Pennsylvania has established an automated system that displays the best travel option.

Data from the Federal Highway Administration from 2001 show that it costs about 46.8 cents to operate an intermediate size vehicle—an amount well above the federal and Texas mileage reimbursement rates.

In Texas, an evaluation of adjusted Texas Building and Procurement Commission motor pool data indicated an operating cost of 43.4 cents per mile for Texas based on fully allocating all costs. This is 8.4 cents above the current Texas reimbursement rate. Adopting partial cost coverage for the capital cost portion of the operating costs lowers the per mile amount to 35.7 cents. Converting time-based fixed costs to mileage-based costs using the average speed traveled on Texas highways indicates a per-mile cost of $0.2612, a figure 8.9 cents below the current reimbursement rate.

Using the same data employed to calculate the allowed national reimbursement rate established by the IRS, analysts determined that vehicle-operating costs in Texas are 3.5 cents per mile less than the IRS reimbursement rate.

Policy Options

Depending on the source of the data and analytical assumptions, the current reimbursement rate of 35 cents per mile for the use of an employee’s personal vehicle could be seen as below what should be considered reasonable or above. Based on TBPC variable costs and estimated Texas fixed costs, the current reimbursement rate does not meet fully allocated costs of operating the representative vehicle, but Texas’ mileage reimbursement rate exceeds a partial cost reimbursement rate.

The lowest reimbursement figure that is potentially justifiable is based on converting time-based fixed cost charges to mileage-based costs using the average speed traveled on Texas highways. This approach would indicate a reimbursement rate of 26.1 cents per mile. But, this cost is sensitive to changes in the assumptions about average highway speeds and could vary for other representative vehicles. Moreover, this approach results in fuel costs becoming a much larger percentage of reimbursable costs, so this analytical method is the most volatile of any of the estimation methods considered in this analysis.

Using data from Runzheimer International, the source of data the IRS uses to establish the federal reimbursement rate, it can be argued that the Texas reimbursement rate should be 3.5 cents less than the federal rate. But, because of the increase in gasoline prices since the IRS set the most recent federal mileage rate, this difference is most appropriately viewed as a deviation from a rate that could be raised to cover cost increases since the last increase in the federal rate.

All states examined in this report require state employees to use the most the economical travel mode. Pennsylvania has established an automated travel system that displays the best travel option.

  • Texas should create an automated travel system for state employees similar to the system Pennsylvania uses, which displays the best travel option. At the least, the system should compare the cost of a per-mile reimbursement to the cost of using a rental car. As a cost savings, where rental car usage would prove less expensive than per-mile reimbursement, total mileage reimbursement could be capped at the amount that would be spent on a rental car.

It is not possible to accurately determine the total miles driven by state employees because it is possible that some agencies would establish a lower mileage rate reimbursement level than that established by the Comptroller.

  • Agencies opting to use a reimbursement rate other than the official one should notify the Comptroller’s office. This would enable the Comptroller to more accurately evaluate reimbursement costs.
TABLE 1
Texas and IRS Mileage Reimbursement Rates
1972-2004
Fiscal Year Texas Mileage Rate IRS Mileage Rate Texas Rate Ranges
1972 $0.100 $0.120  
1973 $0.100 $0.120  
1974 $0.120 $0.150  
1975 $0.120 $0.150  
1976 $0.160 $0.150  
1977 $0.160 $0.170  
1978 $0.180 $0.170  
1979 $0.180 $0.185  
1980 $0.200 $0.200  
1981 $0.200 $0.200  
1982 $0.230 $0.200  
1983 $0.230 $0.205  
1984 $0.230 $0.205  
1985 $0.230 $0.210  
1986 $0.230 $0.210  
1987 $0.210 $0.225  
1988 $0.210 $0.240  
1989 $0.210 $0.255  
1990 $0.240 $0.260 $0.21-$0.25
1991 $0.240 $0.275 $0.21-$0.25
1992 $0.275 $0.280 $0.21-$0.275
1993 $0.275 $0.280 $0.21-$0.275
1994 $0.280 $0.290 $0.25-$0.28
1995 $0.280 $0.300 $0.25-$0.28
1996 $0.280 $0.310 $0.25-$0.28
1997 $0.280 $0.315 $0.25-$0.28
1998 $0.280 $0.325 $0.25-$0.28
1999 $0.280 $0.310 $0.25-$0.28
2000 $0.280 $0.325 $0.25-$0.28
2001 $0.280 $0.345 $0.25-$0.28
2002 $0.345 $0.365 $0.25-$0.35
2003 $0.350 $0.360 $0.25-$0.35
2004 $0.350 $0.375 $0.25-$0.35


TABLE 2
Total Mileage Reimbursement Expenditures and Mileage Equivalent
1979 to 2003
Year Reimbursement Expenditures Mileage Equivalent
1979 $20,735,667.00 115,198,150.00
1980 $21,483,770.00 107,418,850.00
1981 $21,363,805.00 106,819,025.00
1982 $22,675,105.00 98,587,413.04
1983 $24,256,450.00 105,462,826.09
1984 $24,130,573.76 104,915,538.09
1985 $23,430,796.65 101,873,028.91
1986 $22,740,049.82 98,869,781.83
1987 $20,928,331.25 99,658,720.24
1988 $22,769,062.22 108,424,105.81
1989 $24,435,448.20 116,359,277.14
1990 $29,135,459.59 121,397,748.29
1991 $31,489,586.01 131,206,608.38
1992 $36,003,663.38 130,922,412.29
1993 $38,813,608.00 141,140,392.73
1994 $37,703,664.00 134,655,942.86
1995 $38,038,521.00 135,851,860.71
1996 $37,045,258.00 132,304,492.86
1997 $36,862,158.00 131,650,564.29
1998 $34,980,180.19 124,929,214.96
1999 $33,278,159.42 118,850,569.36
2000 $32,278,454.96 115,280,196.29
2001 $31,873,159.03 113,832,710.82
2002 $38,244,028.52 110,852,256.58
2003 $37,492,825.03 107,122,357.23


Endnotes

[1]Tex. H.B. 1, 78th Leg., R.S. (2003), Art. 9, Sec. 5.04a.
[2]Tex. S.B. 222, 71st Leg. R.S. (1989), Art. 5, Sec. 14.1.a.
[3]Comptroller Object of Expenditure Code 7102.
[4]Comptroller Object of Expenditure Code 7112.
[5]Used total travel expenses listed in the financial reports – in 2003 aircraft travel is broken out with new codes that did not exist in 1982.
[6]Internal Revenue Service, “Revenue Procedure 2003-76”, available in pdf format at http://www.irs.gov/pub/irs-drop/rp-03-76.pdf. (Last visited July 26, 2004.)
[7]Runzheimer International, “Government Services-Examples of Government Projects/Testimonials,” http://www.runzheimer.com/govc/scripts/gfedproj.asp#IRS. (Last visited July 26, 2004.)
[8]Tex. Gov’t Code Ann. §660.007.
[9]U.S. Department of Transportation, Federal Highway Administration, “Our Nation’s Highways,” Cost of Owning and Operating tables for 1981, 1984, 1991, 1996, 1998, 2001. (Brochure.)
[10]The vehicle capital cost includes the national base price of a 2004 Ford Taurus plus sales tax at 6.25%, average destination charge of $660, and finance charges (5.9%, 60 months) of $3435. The salvage value of $2200 (based on a 1999 Ford Taurus model with 100,000 miles) was subtracted, resulting in $4617 per year vehicle capital cost. Assuming an average of 20,000 miles per year, this equals 23.09 cents per mile. This amount is remarkably similar to calculating a 5-year straight-line depreciation schedule for the cost of this vehicle, which would equate to 21.85 cents per mile.
[11]Based on preliminary fiscal year 2004 TBPC fuel cost data (as of July 19, 2004).
[12]National Association of Insurance Commissioners, “State Average Expenditures & Premiums for Personal Automobile Insurance 2001”. (Brochure.)
[13]The data items used to generate the cost are not from 2004 due to unavailability. As such the partial cost rate may be higher, given the current high gasoline prices.
[14]Texas A&M University, “The 2003 Urban Mobility Report,” available in pdf format at http://mobility.tamu.edu/ums/report/methodology_appB.pdf. (Last visited July 26, 2004.). The average speeds on freeways and principal arterials listed for Texas urban areas were averaged.
[15]This is calculated as the total capital costs per year divided by 525,600 minutes per year times a travel speed of 1.3857 minutes per mile.
[16]Total estimated miles traveled of 107.1 million divided by 38,270 state employees applying for some mileage reimbursement.
[17]Edmunds.com, “Used Prices, Reviews, Inventory,” http://www.edmunds.com/. (Last visited July 26, 2004.)
[18]This was based on the same assumptions as in the TBPC model: Ford Taurus, 20,000 annual mileage; the variable cost data items, insurance and license and registration amounts were based on different source data.
[19]Some states levy a property tax on owning a vehicle which is reflected in the ad valorem tax component of the national average cost; the personal property tax mentioned for Texas does not apply to privately owned vehicles and was excluded from the calculation. Since the contribution of the Texas taxes to the national average number listed under Tax cannot be determined, no adjustment was made.