Postal Service to Ring In 1995 With 32-Cent 1st-Class Stamp

The cost of a first-class letter will rise to 32 cents on Jan. 1 under a pricing plan approved Wednesday by the independent Postal Rate Commission.

The final decision on rates will be made this month by the U.S. Postal Service board of governors, who are expected to ratify the new charges. It would be the first increase since 1991, when the cost of postage rose from 25 cents to 29 cents.

The average American household will spend an additional $7.20 to $9.00 a year for stamps, according to the Postal Service.

The commission accepted the Postal Service request for a 32-cent stamp, but modified other proposals and decided to shift $450 million in proposed additional revenues from consumers and small business to major mailers of advertising and newspaper and magazine publishers.

The rate commission was critical of what chairman Edward J. Gleiman called “the Postal Service practice of attempting to place a disproportionate amount of overhead costs on first-class mailers.”

The Postal Service asked for a 21-cent postcard rate, but the commission cut it to 20 cents, which would represent a penny increase.

For heavier letters, such as those with wedding invitations, family photographs or large greeting cards, the Postal Service wanted a 25-cent rate for the second ounce. But the commission voted to hold it at the current level of 23 cents.

Priority mail now costs $2.90 to ship two pounds or less. The requested rate was $3.20, and the commission recommended $3.

Express Mail, now $9.95 for an eight-ounce letter, had a requested rate of $10.95, which the commission trimmed to $10.75.

“All of these rates are lower than the Postal Service recommended and all benefit individual mailers,” Gleiman told a news conference at commission headquarters.

The Postal Service said it was disappointed that the commission rejected its proposal to raise rates 10.3% across the board. “Nevertheless, its decision appears designed to meet our revenue requirements,” a Postal Service statement said.

“We are hopeful that the governors will act within two weeks and that rates can be adjusted as early as possible in January,” the Postal Service said.

In an alliance with third-class mailers and big advertising and catalogue firms that are some of its biggest customers, the Postal Service had asked for a uniform 10.3% rate hike.

But the rate commission said that this would be unfair to the first-class mail users and proposed a rate structure with an 8.9% increase for this category.

The added postage burden would be approximately 14% for second-class newspaper and periodical publishers and third-class advertising mailers.

Business groups, which had hoped for approval of a uniform increase, accepted the decision with reserve.

“Overall, it’s not a bad decision,” said Arthur B. Sackler, managing director of the Mailers Council, which represents a broad range of commercial interests. “The changes are significant but not severe.”

The rate increase endorsed by the commission would produce $4.7 billion in new revenues next year, giving the Postal Service a budget of nearly $55 billion.