|
Headline, May 2, 2006
Forever Stamp suggested
for Postal Rate Hike.
"A forever stamp would help ease the transition to any future price
adjustments," said Board of Governors Chairman James C. Miller III.
On the broader plan, the Governors cited increasing costs for fuel and
health care as among the reasons for today's filing with the independent
Postal Rate Commission (PRC) for price adjustments next year. The plan
includes a three-cent increase in the price of a First-Class stamp. The
annual effect is well below $6 for the average household.
"The Postal Service is not immune to the cost pressures affecting every
household and business in America," said PMG Jack Potter. "However, by the
time new rates take effect next spring, the cost of a First-Class stamp
will have increased by an average of just a penny a year during the last
five years, less than many other consumer products and services.
As one of the nation's largest transportation and delivery organizations,
the Postal Service is extremely sensitive to rising energy costs. We
operate a fleet of more than 260,000 delivery vehicles, supported by air
transportation contracts, more than 17,000 long-haul surface
transportation contracts and a network of more than 37,000 facilities.
Like other businesses, the Postal Service also has experienced significant
growth in health benefit payments for more than 621,000 current employees
and 445,000 retirees. In 2005 alone, these costs increased by $437
million, reaching a total of $6.6 billion.
When new rates are implemented in 2007, the price of a stamp will have
grown at or below the rate of inflation since the last operational rate
adjustment in 2002 — and since today's Postal Service began operations in
1971.
As you know, Postal Service operations are funded solely by the sale of
products and services, not by tax revenues. While other delivery services
have responded to growing costs with fuel surcharges and annual rate
increases, today's filing is the first time since 2002 that the Postal
Service is proposing to adjust rates to cover growth in operational costs.
A January 2006 rate increase was implemented solely to fund a $3.1 billion
escrow account required by a 2003 federal law. Congress has not yet
determined how the Postal Service may apply these funds. |
