Well, it appears the postal die has been cast.
Congress has failed to enact a reform bill, despite the efforts of mailers and their representatives. It’s also failed to eliminate the Postal Civil Service Retirement System Funding Reform Act’s escrow of pension-reform savings that should have been given to the U.S. Postal Service. So now businesses and consumers must brace themselves for postal rate increases that will be historic both in size and in their punishing effect on the economy.
While mailers have benefited from a very nice respite from the usual course of rate hikes, the rise in postal costs will pale compared with the USPS’ revenue resulting from the imposition of the CSRS reform escrow. As a result, mailers will be paying rates far above the postal service’s actual need, simply because Congress and the Bush administration couldn’t get their acts together.
That news alone might be bad enough, but there’s another development looming that promises to make things even worse.
Increasingly, state revenuers are looking for ways to fatten their tax coffers to make up for the income that’s been lost in a lackluster economy. They’re leaving no stone unturned, including the imposition of sales taxes on the postage mailers must pay to have their mail processed and delivered by the postal service.
Think about it: Depending on where you live, state authorities want to slap a 4% to 10% surtax on postage — a “tax” you already have no choice but to pay because of the federal government’s statutory monopoly over the carrying and delivering of mail. A tax on a tax! This is nuts.
The direct mail industry has a long history of doing everything it can to keep postal rates as low as possible. But where is the postal service in all this? Heading for the hills.
Thus far, postal executives have been silent about this tax on a tax even though it will only worsen the USPS’ long-term fiscal viability as more business is lost to other delivery mediums. And why haven’t all those so-called politically savvy postal employee groups weighed in on this issue?
Kinda makes you wonder where we’re heading as a nation: stupid ideas and a lack of leadership.
GENE A. DEL POLITO is president of the Association for Postal Commerce (PostCom) in Arlington, VA.
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