Postal Service Approves 32-Cent Stamp; It Goes in Effect in January

New Year’s Day will ring in a stamp price increase, with the cost of a first-class letter going to 32 cents and a post card to 20 cents.

The U.S. Postal Service board of governors voted Monday to approve the first rate increase in four years, providing an additional $4.7 billion a year in revenues.

The new charges represent a 10.3% increase for first-class postage, less than the 12.2% general inflation rate during the past four years, noted board chairman Sam Winters.

The current first-class rate of 29 cents remains in effect for the rest of the holiday season, traditionally the heaviest mailing period of the year.

Post offices throughout the nation will begin selling special stamps today that can be used until ample supplies of the new 32-cent issues can be printed.

The Postal Service has printed 3 billion copies of the special stamp, without a marked price, that bears a picture of a U.S. flag with the phrase “Old Glory” above it and “USA G/ For U.S. addresses only” underneath the flag. It is good for the 32-cent usage. The “G” stamp is the seventh in a series of unpriced stamps used while rates changed at various times since 1977.

The Postal Service also will issue a “make-up rate stamp” with a dove holding an olive branch in its beak. It is worth three cents and has “G rate make-up stamp” printed across the bottom.

The regular 32-cent stamps will be available in late March or early April. No specific dates of issue have been announced, but the year’s varied crop of stamp subjects will include President Richard Nixon, actress Marilyn Monroe, Milton Hershey of chocolate fame, playwright Tennessee Williams, and jazz greats Louis Armstrong, John Coltrane and Thelonious Monk. Sheets with 20 separate Civil War subjects--including Robert E. Lee and Jefferson Davis--and 10 World War II stamps also will be available.

While raising the first-class rate, Monday’s decision leaves the charge for additional ounces unchanged at 23 cents.

The post card, now 19 cents, goes to 20 cents. Priority mail, now $2.90, will cost $3. Express mail, now $9.95 for a letter, will cost $10.75.

The Postal Service had requested an across-the-board increase of 10.3% for all classes of mail. But the rate commission revised the package of rates and decided to impose higher rates, 14%, on second-class mail, such as newspapers and magazines, and third-class mail, such as advertising materials, circulars and catalogues, and fourth-class books. The decision shifted an additional $400 million in proposed costs from first-class mail to the other categories.

The Postal Service said that cost-cutting measures made it possible to hold the 29-cent rate for an extra year--normally rates increase every three years. However, losses during the last two years--$914 million in fiscal 1994 and $1.8 billion in the prior year--made a price hike “inevitable,” according to the Postal Service.

The 32-cent rate will be “a world-class bargain,” said Winters, noting that “in two countries highly rated for their productivity, the Japanese pay 80 cents to mail a letter and the Germans pay 64 cents.”

The average consumer will spend between 60 cents and 75 cents more a month next year because of higher rates, he said.

Officials have indicated the new rates should be good for two years.

In Monday’s decision, the Postal Service’s eight-member board of governors voted unanimously to accept the rate structure recommended by the independent Postal Rate Commission.

However, the governors asked the rate commission to reconsider the portion of its decision dealing with the complex way in which costs are calculated for the work of letter carriers.

This could have an impact on the next rate case. The particular methods are important because they determine how much is paid by each class of mail in figuring the direct costs of delivering mail, and how much is paid for the overhead costs of operating the postal system, with its massive collection of real estate, vehicles and personnel.