The U.S. Postal Board of Governors yesterday cleared the way to raise first-class postage from 18 to 20 cents and voted to cut construction expenditures for next year by more than half.
The governors, who have said they favor a 20-cent first-class rate, yesterday rejected the proposal of the independent Postal Rate Commission for 18-cent first-class postage and sent it back to the commission to consider for a third time.
The independent Postal Rate Commission had proposed an 18-cent rate after turning down postal officials' requests for a 20-cent rate.
The rate commission is charged by law with reviewing Postal Service proposals and recommending its own to the board of governors. Now the commission must review the case again and recommend a rate structure to the governors, who will make the final decision. In the past the commission and governors have agreed on postal rates.
The commission can resubmit its proposal for 18-cent first-class postage, go along with the Postal Service's 20-cent plan or come up with another recommendation.
First-class postage will remain 18 cents until the case is settled.
The rate commission has no time limitation on making a new decision, postal officials said.
The governors could have modified the rate commission's proposal and unilaterally instituted the 20-cent rate, a Postal Service attorney said. However, that decision could have been open to a court challenge. The attorney said the governors were told that to avoid legal problems they had to reject the proposal again and send it back to the commission. The governors then would be free to change the commission's final proposals if commissioners again rejected the 20-cent-rate plan, the attorney said.
In a terse half-page statement following two hours of closed-door deliberations, the governors also said they have instructed the Postal Service to reduce fiscal 1982 construction spending by $200 million, more than half of projected construction expenditures. A Postal Service spokesman said it is too early to determine where the cuts will be made, but that nearly all construction expenditures are for post offices and vehicle maintenance buildings. Equipment such as that planned for the controversial nine-digit ZIP code isn't included in those expenditures, the spokesman said.
The Postal Service's request for a rate increase was filed in April 1980. Postmaster General William F. Bolger threatened to ask immediately for a new increase requiring first-class postage as high as 23 cents if his proposal for 20-cent first-class postage and other rates was rejected. Bolger says an 18-cent rate would result in a $624 million loss for the financially troubled agency for the 12-month period from last March -- when the 18-cent rate went into effect -- to March 1982.
Last January the Postal Rate Commission rejected the Postal Service's request for a 20-cent rate and recommended an 18-cent rate. In February the board of governors, saying the Postal Service needed a 20-cent rate for first-class mail, accepted the rate commission's proposal under protest and told the commission to review the decision.