The cost of mailing a letter raising a penny

The Associated Press
Tuesday November 14, 2000

For the second time in as many years, Americans are being asked to spend a penny more to mail a letter. 

First-class stamps will cost 34 stamps and other postal service rates will increase, but 20-cent postcards will remain unchanged. The price hikes are likely to take effect in early January. 

After months of hearings and deliberations, the independent Postal Rate Commission approved the new rates Monday to offset rising costs. But it rejected some of the Postal Service’s proposed higher rates — such as a penny more to send postcards and one cent more for a letter’s second ounce. 

The commission also for the first time set a one-pound Priority Mail rate of $3.50. Until now, people sending anything up to two pounds have paid the $3.20 two-pound rate. It also raised the two-pound rate to $3.95. 

“While rates will go up, they will go up not quite as much as the Postal Service proposed,” said commission Chairman Edward Gleiman. 

Beyond the penny increase, each additional ounce of first-class postage, up to 11 ounces, will be shaved from 22 cents to 21 cents. 

The Postal Service had hoped for a 6 percent increase overall in postage rates for all classes of mail to generate $2.8 billion more in revenue per year, with $1 billion of that coming from the one-cent increase for first-class stamps. But the five-member commission granted only a 4.6 percent overall increase, providing $2.5 billion. 

The biggest disagreement was over the Postal Service’s $1.7 billion request for its contingency fund, which the commission cut by $700 million, deeming the request “unreasonably large,” said commission spokesman Stephen Sharfman. But the commission voted to increase the Postal Service’s budget by $400 million in other areas, giving the agency a net $300 million less than it sought. 

By law, the Postal Service’s budget must break even each year, and the commission decided that could be done with a smaller increase. 

It is now up to the post office Board of Governors to decide when the higher rates will go into effect. That decision likely will occur at its scheduled meeting the first week of December. 

Postal Service spokeswoman Sue Brennan declined to comment on the Postal Service’s reaction to the commission’s decisions. 

The last rate increase, adding a penny to the cost of a first-class stamp, was Jan. 10, 1999. 

Because it takes so long to print the billions of stamps needed when new rates take effect, the Postal Service already has interim stamps in the works. In the past, those changeover stamps carried letter designations, A through H, but that practice has been discontinued. 

The next first-class nondenominated stamp, which will carry a picture of the Statue of Liberty, is likely to go on sale before the end of the year to let people wanting to prepare for the change to stock up on new stamps, Brennan said. 

Other nondenominated stamps being prepared include four issues showing flowers, a postcard-rate stamp featuring a bust of George Washington, a Priority Rate stamp showing the Capitol dome and an Express Mail stamp with an image of the Washington Monument, according to the Postal Service. 

In addition to letters and postcards, the Postal Service sought significant rate increases for such things as magazines and catalogs. Magazine publishers called the requested rate jump “devastating” to their business. 

Newspaper postage will increase from 26.6 cents for a 10-ounce mailing to 28.7 cents, less than what the Postal Service had sought. 

The Newspaper Association of America applauded that action, adding that it was heartened by the commission’s rejection of a Postal Service proposal to reduce rates for heavy junk mail. 

“Time and time again, the U.S.P.S. has sought to unfairly favor advertising mailers over first class. Finally, this trend has been broken,” said John F. Sturm, the NAA’s president and chief executive officer. The commission “made the right choice by not imposing even larger increases for small newspapers and magazines, as had been proposed by the Postal Service,” he said. 

But the Virginia-based Mailers Council, a coalition of businesses, nonprofit organizations and mailing groups, was “not happy about the increase” and hopes the Postal Service will be “focusing on the need to increase productivity” to avoid another one anytime soon, said spokesman Robert McLean. 

The post office is required by law to base its rates on the cost of handling each type of mail. 

Monday’s ruling affects only domestic mail rates. The Postal Service can increase international rates on its own, and usually does so shortly after domestic rates are increased. 


On the Net: 

Postal Rate Commission: http://www.prc.gov 

Postal Service: http://www.usps.com