Testifying before a Senate subcommittee last Thursday, Postmaster General William J. Henderson said the USPS has delayed the planned filing of a rate case with the Postal Rate Commission until next year because it expects to end this fiscal year and the next with a surplus.
He didn’t tell the federal services subcommittee of the Senate’s Government Affairs Committee how large a surplus was anticipated for fiscal 1999 and fiscal 2000; how much of an increase will be sought or exactly when the USPS will file with the PRC.
Henderson explained that the surplus, projected to be $200 million, will result from a $700 million cost reduction program he instituted earlier in the year.
Since 1995, when the USPS posted its first surplus since 1989 ($1.8 billion), it has seen the amount slide to $1.6 billion in 1996 and $1.2 billion in 1997.
Both Jerry Cerasale, the Direct Marketing Association’s senior vice president, government affairs, and Neal Denton, Alliance of Nonprofit Mailers executive director, suggested the delayed filing was good for direct mailers and marketers as it would give them more time to develop their postal budgets.
Both predicted that a rate increase averaging between 4% and 6% will be sought when the USPS files a rate case with the PRC sometime between next January and April.
Denton envisions a “double-digit” hike in Standard A Mail rates for flats (catalogs) and periodicals. He and others, anticipate the price of a first class stamp will go to 35 cents from the current 33 cents.
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