Postal Service Will Hike Most Rates

Struggling to reduce a loss that could top $2 billion, the Postal Service will increase most mail rates July 1. The basic 34-cent price to mail a letter will stay the same, however.

The increases will come just six months after the last rate boost. Postal Board Chairman Robert F. Rider said the agency acted reluctantly Tuesday, but the step was necessary “to assure the financial integrity of the nation’s postal system.”

To impose the new rates, the postal board had to take the unusual step of overruling the independent Postal Rate Commission, something that had happened only once before, in 1981. Last January’s increases were less than the post office had sought, having been cut by the rate commission.

Richard F. Strasser, postal chief financial officer, said the agency faces losses of from $1.6 billion to $2.4 billion this year.

He said that as recently as February the loss had been estimated at $3 billion, but the agency has cut spending by freezing hiring and about 800 building projects as well as increasing productivity.

While the 34-cent rate for the first ounce of first-class mail will remain the same, the cost for each additional ounce will climb from 21 cents to 23 cents. That’s what it had been from 1995 to 1999.

The price of sending a post card will rise a penny to 21 cents.

Strasser said the new rates will raise the cost of sending a piece of advertising mail by one-half to three-quarters of a cent and for the typical magazine it will add one-half cent to the postage.

Robert Brinkmann, vice president of the Newspaper Assn. of America, said that newspapers sent outside their home counties use the same rates as magazines, which rose 2.6%. He said that would also be about a half-cent per paper. For smaller papers mailed within their home counties, he said, the increase is about one-tenth of a cent per paper.

The post office had a $199-million loss last fiscal year, after five years in the black.