WASHINGTON -- The price of a first-class letter and most other mail will rise by 3 cents on Jan. 26, the largest rate hike in 11 years, the commission that oversees the U.S. Postal Service announced Tuesday.
The stamp-price increase to 49 cents will be in effect for two years, giving the financially struggling agency a temporary infusion of extra revenue intended to help it recoup losses suffered during the economic downturn between 2008 and 2011.
The Postal Regulatory Commission rejected the Postal Service's petition for a permanent increase, saying that the $2.8 billion infusion should compensate only for the recession, not offset losses caused by Americans' growing use of electronic communications and commercial delivery services.
"Allowing the rates to remain in effect indefinitely would result in overrecovery of the financial impact of the Great Recession on the Postal Service," the commission wrote in a 219-page decision. The downturn "does not eliminate the Postal Service's obligation to respond to revenue losses by reducing costs or improving efficiency."
The commission's 2 to 1 approval of an emergency or "exigent" rise of 2 cents will give the Postal Service extra revenue for the first time since a 2006 law limited rate increases to the rate of inflation. Regulators approved an inflation-tied 1.7 percent hike in November that will raise stamp prices by a penny; the announcement Christmas Eve will result in an overall 6 percent jump in postal rates.
The decision was a blow to mail-dependent publishing industries, which lobbied against an increase, saying it would add millions of dollars in costs for consumers and depress mail volume.
In addition to first-class mail, the higher rates will apply to magazines, newspapers, advertising mail and bills - which together account for most of the 158 billion pieces of mail delivered every year.
"This is a counterproductive decision .<!p>.<!p>. and it does nothing to fix [the Postal Service's] systemic problems," Mary Berner, president and chief executive of the Association of Magazine Media, a trade group, said in a statement. The rate hike "will have ripple effects through our economy - hurting consumers, forcing layoffs, and impacting businesses."
Spokesman Roy Betts said the Postal Service is "disappointed in the [commission's] split decision to limit the duration of a modest exigent rate increase." He said postal officials were reviewing the ruling "in an attempt to determine the basis for the decision."
One regulator wrote in Tuesday's decision that postal officials should not consider the temporary reprieve a salve for the agency's "structural challenges."
"The Postal Service remains in a state of financial crisis," Commissioner Mark Acton wrote. "Granting the Postal Service some or all of the pricing relief it seeks .<!p>.<!p>. may help in the short term, but that does not alter that reality."