The U.S. Postal Board of Governors announced yesterday it had voted to raise the price of first-class postage from 18 cents to 20 cents and postcards from 12 cents to 13 cents effective Nov. 1.
The new rates -- the subject of a bureaucratic battle for more than a year -- should remain in effect at least for two years, depending on inflation, said Robert L. Hardesty, chairman of the board of governors. He said he regretted that the rates will become effective at the beginning of the Christmas card season but added that the Postal Service needs the added revenues.
"Your local supermarket cannot sell you milk and bread and groceries at 1978 prices because it has to pay more for its goods, its wages and its utilities," Hardesty said. "For the same reasons, the Postal Service cannot continue to deliver your mail at 1978 prices."
The Postal Service is cranking out a "C" series stamp that will be worth 20 cents and will be available in a few days, a spokesman said.
Hardesty said the Postal Service lost nearly $126 million during the first five months under the current rates. The new rates should add $1 billion annually to Postal Service revenues and provide a $100 million operating profit for the 12 months ending next February, Hardesty said.
The independent Postal Rate Commission, which recommends rate changes, rejected proposals for a 20-cent first-class rate three times in favor of the 18-cent rate, saying the increased postage was unnecessary.
"If the governors had not taken this action, the Postal Service would have incurred continuing and dangerously high operating costs for at least another year," Hardesty said. "It would have been forced to borrow funds to meet operating costs."
The last increase was in May 1978 when first-class postage rose from 13 cents to 15 cents. The 18-cent rate was approved under protest as an interim measure in March 1981. This is the sixth increase since 1971, when mailing a letter cost 6 cents.
Although the cost of a first-class stamp will rise to 20 cents, the cost of each additional ounce will remain at 17 cents. There will also be no increase in parcel post.
Second-class mail rates for publications delivered within a county will decrease from 3.5 cents per pound to 3.4 cents per pound and from 1.9 cents per piece to 1.8 cents per piece. For delivery outside of a county, regular second-class postage will start at 12.8 cents per pound compared with 10.6 cents per pound under the old rate. The rate for nonprofit publications also will decrease from 6.8 cents per pound to 6.6 cents per pound.
Express mail rates will start at $5.85 instead of $5.30.
Several industries involved in heavy use of the mails such as greeting card manufacturers are expected to challenge the decision before a federal appeals court. Under the Postal Reorganization Act of 1970, however, the rates cannot be suspended by an appellate judge until the lawsuit challenging the rates has ended, according to a Postal Service attorney.
During a press conference yesterday, a reporter asked why rates were raised by 2 cents for first-class mail, which households use, but were not changed for business reply mail, which is often used for so-called "junk mail." Postmaster William F. Bolger replied that individual letters cost more to handle than other kinds of mail.
The Postal Service filed for the rate increase from 15 cents to 20 cents in April 1980. The rate commission recommended an 18-cent rate last February. In March the governors, who make final decisions on the cases, allowed the 18-cent rates under protest to enable them to generate additional revenues until the 20-cent structure could be imposed. But they asked the rate commission to review its decision.
In the past the rate commission has agreed with the Postal Service recommendations for rate changes. But because the governors have never imposed their own rate structure over the objections of the rate commission -- as they did yesterday -- postal officials weren't sure what they could do.
After the rate commission last month rejected the 20-cent proposal for the third time, the governors deliberated two days before imposing the higher rate.