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Board Reported Seeking 3-Cent Postage Boost

May 05, 1987|United Press International

WASHINGTON — The Postal Board of Governors, meeting in private session Monday night, voted to seek a price increase for a first-class postage stamp to 25 cents, sources said.

The nine-member board was expected to announce the proposed increase, along with an average 13% hike for other classes of mail, at an open meeting today.

A source close to the board said the governors will ask the Postal Rate Commission within the next few days to begin the long approval process for the 3-cent hike, which would not take effect before May, 1988.

Mailing a first-class letter has cost 22 cents since Feb. 17, 1985.

The Postal Service, whose budget is supposed to break even, has shown a profit in five of the last 10 years, including $305 million in surplus earnings last year. It is expected to break even this year.

Rising Costs Cited

But an increase is needed, the board said at its April meeting, to offset rising costs, including a new federal retirement program expected to add almost $2 billion in expenses by the end of the next fiscal year.

At the same time, labor costs are expected to rise. The Postal Service began negotiating new contracts last month with three employee unions representing about 650,000 workers. Talks with a fourth union representing another 76,365 workers open in October.

The rate increases, if approved, could mean an additional $4 billion in revenues in fiscal 1989.

After the Postal Service files a rate increase request, the independent Postal Rate Commission has 10 months to hold hearings on the proposed charges and decide whether to approve them, reject them, or modify them.

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