EL SEGUNDO HERALD April 7, 2016 Page 3 100 95 75 25 5 0 Reluctant Postal Service Must Drop Mail Rates By Rob McCarthy It’s rare when the price of a first-class stamp gets cheaper, but it will on Sunday when the U.S. Postal Service is forced to reduce some rates under a deal made with the federal government. The Postal Regulatory Commission agreed the Postal Service could raise first-class, international and business postage rates until it could raise $4.6 billion to offset losses and debt that mounted since the economy cratered in 2007. The mail service is expected to reach the target amount on April 10, so the price of a first-class stamp will fall by two cents. A first-class stamp on Sunday will cost 47 cents, and an additional ounce for first-class falls to 21 cents. The biggest drop will be an international first-class letter, which will cost $1.15 rather than a $1.20. Mailed postcards will be a penny cheaper to mail at 34 cents. No refunds will be issued for unused firstclass Boyles_Ad4 Friday, April 1, 2016 10:15:47 AM or Forever stamps not used by Sunday’s expiration date for the temporary increase in effect since 2014. A Postal Service spokeswoman advised not buying books of first-class or Forever stamps until the rates change. The Postal Service tried to block Sunday’s action in federal court, arguing that it needed the $4.6 billion influx of revenue to overcome the decline of first-class mail volume because of business closures from the Great Recession. The mail service badly needs to modernize equipment, buy new vehicles and fund employee health care and retirement benefits, according the postal commission that oversees it. “We were mandated by Congress that we pre-fund future retiree health benefits to the tune of $5.8 billion a year. Here we’re mandated to do that then in 2007, boom, the Great Recession hits. We’ve never been able to recover from that,” said postal spokeswoman Eva Jackson. A federal appeals court denied the Postal Service’s motion to force its bosses at the postal commission to extend the two-cent increase on a first-class stamp. The last hope is an act of Congress before Sunday, and that appears to be a longshot. “The (emergency) surcharge granted to the Postal Service last year only partially alleviated our extreme multi-year revenue declines resulting from the Great Recession, which exceeded $7 billion in 2009 alone,” said Postmaster General and CEO Megan J. Brennan. The Postal Service warned the forced reduction on first-class, postcards and some business postage would worsen its annual operating deficit, which has been improving of late. The Postal Service added more than $1 billion in revenues last year and in 2014, primarily from the stamp-price surcharge. Postal officials argue it’s time for a permanent rate increase. “Removing the surcharge and reducing our prices is an irrational outcome considering the Postal Service’s precarious financial condition,” its CEO said. The mandatory action will reduce revenue and increasing its net losses by approximately $2 billion per year, according to her office. Unless Congress or another federal court steps in to extend or make permanent an existing surcharge for mailing products and services – including the Forever stamp -- the Postal Service will be required to reduce prices on April 10. The Postal Regulatory Commission, which oversees U.S. mail operations, estimates the Postal Service this weekend will reach the $4.6 billion cap from the surcharge. Despite improving revenues the past two years, the Postal Service posted a $5.1 billion deficit in 2015 and can’t pay its retirementfund obligations. The Postal Service is $50 billion in debt after several years of running up huge losses, and it’s not making legally required payments to a retiree healthbenefit fund. Employee costs were higher last year, as sales in mailing services other than first-class postage increased and employees worked more overtime. With Sunday’s loss of the two-cent addon for a stamp, the Postal Service will have less money this year to pay overtime, buy equipment and replace aging vehicles in its nationwide fleet, according to officials. It is looking for ways to expand mail products and services, and has no intention of stopping mail delivery on Saturdays, according to Jackson, a USPS spokeswoman for Southern California. Postal Service prices for mailing are capped by law at the rate of inflation as measured by the Consumer Price Index for all urban consumers. However, the law permits price increases beyond the inflation rate for extraordinary or exceptional circumstances. That was the case when the Postal Service received approval for the slight 4.3 percent surcharge on postage. The Postal Regulatory Commission capped the emergency surcharge to $4.6 billion over the objections of postal officials who preferred it be permanent. The Postal Service has experienced rapid growth lately in package volume, yet it is “not nearly enough” to offset the decline in revenues from first-class mail, they say. “First-class mail volume has dropped and it’s not going to come back,” said USPS spokeswoman Eva Jackson. We’ve lost that first class mailing volume.” Online bill paying also cuts into first-class postage sales as more Americans bank, make purchases and pay their bills online, according to postal officials. They emphasize that the Postal Service is looking at new, competitively delivery services in rural and hard-to-reach areas to increase revenues. The mail service has trimmed 300,000 positions since Congress ordered it to pre-pay for retiree benefits, which spokeswoman Jackson said had never been done before. Self-service machines at local post offices will be re-programmed in time for Sunday’s change in the rates, according to the spokeswoman. • DON BRANN RETURN TO THE EL SEGUNDO CITY COUNCIL “MAYOR FUENTES ENDORSES DON” brann4citycouncil.com Together We Can For more information, please email: brann4citycouncil @sbcglobal.net PAID FOR BY: Brann4CityCouncil 640 California Street El Segundo, CA 90245 Campaign ID #1382335 • Faster Response Times in Medical Emergencies • More Police Officers On Patrol • Control City Salaries / Pensions • No New Taxes On Residents • Fight LAX Noise Pollution • Support Our Schools • Maintain Small Town Atmosphere Keep El Segundo Strong
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