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May 9, 2008 - 7:29PM

Mail 'em now: Cost of stamps rising on Monday

David Woodfill, Tribune

Postal customers have one more weekend to mail their letters and packages at the current rates. Starting Monday, the U.S. Postal Service will raise the price for 1-ounce first-class mail by a penny, from 41 cents to 42 cents.

Other forms of mail are also rising in price. Mailing a certified letter, for example, will cost $2.70, up 5 cents from $2.65. A 1-ounce first-class letter mailed overseas will cost 94 cents, a 4-cent increase.

Since reforms made in 1970, the Postal Service has been required to fund itself through the price of postage and other services.

"The one thing that's probably most important to remind anyone is the Postal Service doesn't receive any tax dollars," said Postal Service spokesman Peter Haas. "Like everyone else, we're being impacted by such things as gas prices going up."

Up until about two years ago, officials had to navigate a lengthy and bureaucratic process to raise rates, which kept the prices relatively stable for years at a time. After the passage of the Postal Accountability and Enhancement Act of 2006, officials were allowed more freedom to raise rates faster to keep prices in line with inflation.

Nowadays, increases usually occur annually around Mother's Day, said Postal Service spokesman Dave Partenheimer. The price of a first-class stamp has increased a dime since 1995.

"Although we'll have annual price changes, the increases will generally be smaller than under the prior system," he said.

Isabelle Main, a Mesa resident with family and friends living in France and New Zealand, was scrambling Friday morning to mail a stack of packages that she jammed into a tote bag at the post office on Center Street north of Main Street in Mesa.

She said she was trying to send as much mail as possible before the rate increase goes into effect.

Although Main said postage rates are still reasonable, she fears that some people will begin to rely on the telephone and e-mail to communicate with family and friends.

"It saddens me," she said. "Letter writing is becoming a lost art."

Main, who moved to the United States in 1968, said she saved all the letters that her mother sent from home.

"They're treasures," she said.

Rob Murtagh, who was also doing business at the post office, recalled the days when people could mail a letter for 25 cents.

"I can't do nothing about it, if you know what I mean," he said. "It's just the cost of living."

Charles Guy, a senior fellow with libertarian think tank the Lexington Institute, said 1-cent annual increases are not enough to keep the Postal Service from facing significant financial shortfalls in the future.

Guy said the agency is facing a $50 billion retiree health care benefit fund that it must prepay over the next 10 years. The requirement was put in place with the other postal reforms in 2006.

"A penny increase will not do that because that's just covering costs," said Guy, former director of the Postal Service's Office of Economics and Strategic Planning.

That leaves officials with two options: introduce lucrative new services - which Guy said haven't done well in the past - raise postage by about 5 cents a year over the next decade, or sell off assets such as distribution centers, which are unlikely, he said.

But Partenheimer dismissed Guy's scenarios.

"In the past, the Lexington Institute has been a haven of doom and gloom as it comes to the Postal Service, but we continue to survive," he said.

Partenheimer said he's confident the Postal Service will meet its financial obligations, not through postage rate increases, but through innovative services like its new volume discount program and guaranteed global express delivery service.

"The current economic condition doesn't lend itself to a lot of explosive growth at this time," he said. But "we do believe that we're putting stuff in place - items in place that will help us grow in the future and continue to stay stable."


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