If it's a mile and a half away you don't need panniers and you don't need a new bike. Get a rucksack, get on the bike and pedal the 7 minutes it will take you to get to work. If you must buy a cheap rack and stick it on an old mtb.

But if you want to have fun and spend money I'd go for a cyclocross bike with 700cx25 tyres (35 is for off road and old people) lightweight rack and a pannier.