Archive for Saturday, April 9, 2005

Post office seeks to increase stamp prices

April 9, 2005


— The post office wants an extra 2-cents-worth for its stamps.

However, at the same time Friday that the agency proposed the stamp price increase, it also invited Congress to eliminate the need for it.

The proposal sent to the independent Postal Rate Commission calls for increases to take effect early next year.

They would boost first class stamps from 37 cents to 39 cents, increase post cards from 23 cents to 24 cents and raise other postal prices similarly.

In announcing the rate proposal the Postal Service said it was needed only because a 2003 law required the agency to place $3.1 billion annually in an escrow account.

Postal officials have been urging Congress to drop that requirement and said they would withdraw the rate request if Congress does so.

Postage rates last went up June 30, 2002, rising from 34 cents to 37 cents for a typical first class letter.

Congress mandated the escrow requirement in 2003 when it passed a law reducing the amount of money the agency has to pay into its retirement system, which auditors said was being overfunded. Instead Congress ordered the money to be put into the escrow fund.

Rate changes in the proposal include:¢ First class: Increase 2 cents to 39 cents for first ounce, increase 1 cent to 24 cents for each additional ounce.¢ Post cards: Increase 1 cent to 24 cents.¢ Express mail: Increase lowest charge from $10.70 to $11.30.¢ Priority mail: Increase minimum charge from $3.85 to $4.05.¢ Parcel post: Raise lowest rate from $2.81 to $2.96.¢ Certified mail: Boost from $2.30 to $2.40.¢ Money order: Increase from 90 cents to 95 cents.¢ Registered mail: Raise from $7.50 to $12.75.

Elimination of that fund has been included in bills that would make other changes in postal operations, but Congress has not acted on the proposals.

"To continue to require the Postal Service to hold these funds in an escrow or other account would simply continue the overpayment and unfairly burden postal ratepayers," the post office's governing board said in a letter to Sen. Susan Collins, R-Maine, chairwoman of the Committee on Homeland Security and Governmental Affairs.

Now that the post office has formally asked for a 5.4 percent increase, the Postal Rate Commission will have hearings and collect information before ruling on the proposal.

That process can take as long as 10 months, meaning that if the rate increase is approved it wouldn't take effect until early next year.

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