Postal Rate Hike Delayed To January p.12

By: Kelvin Childs Surpluses cited for going slow on modest increases
The U.S. Postal Service Board of Governors decided to wait until next year to raise rates.
The board set the rate hike to take effect Jan. 10, 1999, chairman Sam Winters said at the board's monthly meeting in late June in Washington, D.C.
The rate hike ? on average 2.9% ? is the first since Jan. 1, 1995, and raises the price of a first-class stamp to 33?, from 32?. Rates for in-county periodicals, the category used by many community newspapers, rise 1.1%.
The average hike is the lowest increase in modern postal history, Winters said.
The new rates allow discounts for in-county mailers that sort by carrier route sequence, as they mail to 25% of a route's addresses. Existing rules provide for discounts only if mailers target at least 125 addresses on the route, an unreachable number in many rural areas.
The rates were approved in May by the Postal Rate Commission, which scaled back the Postal Service's initial request by some $700 million. The Postal Service has posted surpluses of more than $1 billion in each of the past three years, and expects another this year. Because of that largess, the rate commission ? and such groups as newspapers, commercial mailers and even the House of Representatives ? argued that the rate increase be pushed back to next January or later.
The board voted unanimously June 29 to approve the rates, Winters said, but did send some minor items back to the Postal Rate Commission for further review, and rejected two new products, Courtesy Envelope Mail and Prepaid Reply Mail.
Winters said, "We need to continue investing in those things that will improve consistency in home delivery and improve and innovate services for American businesses."
The National Newspaper Association, which represents community newspapers, lauded the decision to delay the rates.
"The governors have demonstrated overall good business judgment in this rate announcement," said Kenneth B. Allen, NNA's executive vice president and CEO. "It is difficult to explain to postal customers why an institution that has shown record profits in the past few years needs additional operating revenues, but we also understand the need for upgrading information systems and for better mail management," Allen said.


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