Price of stamps to increase Monday

By Holly Green
Staff Reporter

May 09, 2008 10:05 pm

— Today is the last day for Huntsville residents to purchase the 41-cent Forever stamp before stamp prices increase on Monday.
Forever stamps are available at the Huntsville Downtown Post Office Unit on 10th Street during its regular Saturday hours from 9 a.m. to noon.
Stamp prices will increase by one cent on Monday, marking the second increase in the last two years.
However, Huntsville postmaster Diana Burnhan said residents are not giving in to the price increase just yet.
“Stamps will increase from 41 cents to 42 cents,” she said. “Today is the last day to buy the Forever stamps. Even if Congress decides to raise the price again, these stamps are good forever.”
Burnhan said the post offices in Huntsville have been steadily busy with customers stocking up stamps.
“People are buying them like crazy, especially the prison units, Brookshire’s and now the regular customers,” she said. “Some are buying as many as 500-1,000 stamps at a time. I even bought some myself.
“After the price increase, we will come out with a 42-cent Forever stamp. So, if Congress ever raises it again, these stamps will also be good forever.”
According to Charles Guy, former director of the Postal Service’s Office of Economics and Strategic Planning, Monday’s stamp price increase suggests that postal rates will rise annually.
“Raising stamp prices — even on a yearly basis — won’t save the Postal Service from the significant fiscal challenges it faces,” he said, now a senior fellow at the Lexington Institute.
Thanks to reform legislation passed in 2006, Guy said USPS must keep future rate increases within the official rate of inflation. The legislation also requires the Postal Service to provide $50 billion to fund its pension obligations over the next decade.
“With stamp prices tied to the Consumer Price Index, the Postal Service can’t just raise prices to meet its pension-funding requirements,” he said. “That leaves it only two ways to cover costs — lowering the amount spent on labor or introducing new products that will increase revenue.
“The Postal Service’s track record with new products has not been a good one. There’s no getting around it — the Postal Service has to find ways to reduce its labor costs substantially.”
Monday’s rate hike represents the fifth price increase since 2001, Guy said. Stamp prices have gone up nearly 24 percent during that time.
“Congress has made it clear that only ‘extraordinary or exceptional circumstances’ would allow the Postal Service to raise prices beyond the rate of inflation,” he said. “But Congress has also resisted USPS management’s efforts to control labor costs by consolidating facilities or outsourcing tasks.
“Monday’s stamp price increase may provide a temporary bump in revenues, but it’s not enough to solve the Postal Service’s long-term financial problems.”
For more information about Forever stamps available, call the Huntsville Downtown Post Office Unit at (936) 295-3037.
Forty-two cent Forever stamps will also be available at the Huntsville Post Office on Hwy 30, beginning on Monday.