Postal Service approves rate hikes

Associated Press

WASHINGTON — It’s official: It will cost a penny more to mail a letter starting Jan. 7.

The increase to 34 cents was accepted by the U.S. Postal Service’s board of governors Tuesday. It will be accompanied by changes in many other rates, including international mail.

But the wide-ranging set of rates approved last month by the independent Postal Rate Commission fell well short of what the post office wanted, prompting the agency to adopt the new rates under protest.

"We will implement the recommended decision, but are returning it to the commission for further consideration," said Board Chairman Einar Dyhrkopp.

"We cannot accept a situation that threatens the ability of this organization to provide the levels of service that the American people expect and deserve," he said.

Postmaster General William Henderson said the cuts made by the rate commission reduced the post office’s planned contingency fund by $1 billion.

Rate commission general counsel Stephen Sharfman said the commissioners were waiting to receive and read the post office’s response.

The post office is currently in arbitration with three of its largest labor unions. It expects to need the added income to pay higher salaries and to meet other rising costs, including fuel and equipment.

Also at Tuesday’s meeting, Richard Strasser Jr., the post office’s chief financial officer, reported that the agency finished fiscal 2000 with a $199 million loss.

While the independent rate commission agreed with the post office’s requested 34-cent first-class rate, it reduced the agency’s proposed increases in other areas.

For example, under the rates recommended by the commission, a letter will cost 34 cents for the first ounce, but the second ounce will cost 21 cents, a penny less than the current price. There were cuts in other rate requests also.

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