By: Debra Gersh Hernandez
POSTMASTER GENERAL MARVIN Runyon acknowledged that the 10.3% rate hike for most postal customers would amount to a 34% increase for second-class in-county mailers and said postal officials are working with newspaper organizations to resolve the problem.
Appearing before the Senate Committee on Government Affairs’ Subcommittee on Federal Services, Post Office and Civil Service, Runyon explained that during the last rate case in 1990, these mailers, many of whom are weekly community newspapers, paid 100% of their attributable costs, as all mailers must.
Now, however, this category is carrying less than 80%, Runyon said.
In addition, a 4% increase in that category already was on the boards as a result of an earlier agreement in the revenue-foregone bill to factor in preset increases during a period of years.
Runyon, who appeared on Capitol Hill to present the postmaster general’s annual report, also attributed the increase to the fact that there are fewer pieces being mailed in this category.
When the volume is down, there is an increase in the attributable cost, he explained.
Sen. David Pryor (D-Ark.), subcommittee chairman, who asked Runyon about this “unprecedented burden” on weekly newspapers, said these papers are the “heart, the fabric of our society. We cannot cripple or damage them.”
Pryor said those involved “must work on some rethinking of in-county” rates.
Runyon also discussed the cycle of rate increases, noting that this is the first in four years, compared with the previous three-year sequence.
“I’m not trying to set any new cycle,” he said, referring to the two-year plan, although he would prefer to see lower increases more often, which he said would be easier for postal customers.
The latest increase, if approved by the Postal Rate Commission, is expected to meet the Postal Service’s revenue needs for two years.
Citing plans for rate reform, Runyon said the Postal Service needs “to take a hard look at what we do and how we do it. We must make sure rates are in line with costs and with new automation.”
Overall, Runyon reported, the Postal Service closed fiscal 1993 “in better financial shape than expected,” thanks to restructuring and debt refinancing, although some financial pressures remain.
Sen. David Pryor (D-Ark.), subcommittee chairman, who asked Runyon about this
“unprecedented burden” on weekly newspapers, said these papers are the “heart, the fabric of our society. We cannot cripple or damage them.”