The Postal Rate Commission yesterday rejected an appeal by the U.S. Postal Service to raise the price of a first-class stamp to 20 cents, leaving the price of mailing a letter at 18 cents.
The rate commission action could mean the filing of another rate increase request before the end of the year by the Postal Service. Postmaster General William F. Bolger has said that if the rate commission didn't approve a 20-cent stamp he would file for another increase. The Postal Service yesterday had no comment on the rate commission's decision.
The decision now returns to the postal board of governors for the second time. The governors have the options of accepting the recommendation, returning it to the rate commission for reconsideration or again approving it under protest while officials seek to overturn the recommendation in court.
But because the stalemate among the rate commission, the Postal Service and board of governors is new to the 11-year-old rate-making procedure, a Postal Service spokesman said he isn't sure just how it would end or whether the governors can just decide the case their own way without the rate commission's approval.
The Postal Service originally asked for an increase in first-class postage from 15 cents to 20 cents and for postcards from 10 cents to 13 cents. Other increases, such as for parcel post, were also requested, resulting in a proposed $3.75 billion increase in rates and fees.
But the rate commission last February rejected the request and proposed its own rate schedule, including an 18-cent stamp and 12-cent postcard.
However, in March the Postal Board of Governors, which makes the final decision in rate cases after review by the rate commission, agreed with the Postal Service that a 20-cent stamp should be granted.The governors voted under protest to temporarily allow the price of a first-class stamp to rise to 18 cents while the rate commission reconsidered its decision. The governors also said they would immediately seek a permanent increase to 20 cents because the Postal Service needs to break even.
But, yesterday the rate commission took the unprecedented action of rejecting for a second time the Postal Service's request, saying the service requested $900 milliion more revenue than was necessary to break even for a 12-month testing period starting last March.
The rate commission also disputed accounting methods used by the Postal Service and the board of governors in deciding how much revenue the Postal Service would need.
"As a citizen, a former postal employe and a Postal Rate Commissioner, I strongly favor a financially solvent and viable Postal Service, Rate Commission Vice Chairman Simeon M. Bright said in a concurring opinion. "With our decision and strong indications that mail volume and postal revenues are increasing, the Postal Service will surely break even in the test year as desired by Congress and as required by the "Postal Reorganization Act of 1970.
But Commissioner James H. Duffy said in a dissent that his colleagues' recommended revenue requirement for the Postal Service was unreliable and speculative.