A federal district judge last week dismissed a motion for a temporary restraining order that would have blocked the U.S. Postal Service from raising nonprofit postal rates for the second time this year.
Judge Stanley Harris’s refusal to hear the case meant that the $105 million rate hike-which would raise postal costs for educational organizations and other nonprofit entities by as much as 20 percent-was set to go into effect this past Sunday, as scheduled.
Third-class nonprofit rates had already jumped by 23 to 41 percent on Jan. 1.
Nonprofit groups and newspapers were expected to contest the rate hikes at the appellate level.
Subsidies Cut
The Postal Service imposed the new rate hikes in part to offset a recent cut in federal subsidies for its nonprofit and other “preferred” customers—such as newspapers—mandated by the Gramm-Rudman-Hollings deficit-reduction law.
By statute, the Postal Service has the right to raise rates to offset shortfalls in appropriations.
But George E. Miller, the head of a lobbying group for nonprofit mailers, said the Postal Service should not have raised the rates without first seeking the consent of the Postal Rate Commission, which oversees changes in regular postal rates.
He said such approval was especially important because the increases would for the first time require nonprofit groups to pay more than the actual cost of processing their mail.
“It’s our contention that they cannot go above that level without providing us with the same protection offered to commercial mailers,” Mr. Miller said.
Nonprofit groups have traditionally been exempt from charges for the Postal Service’s overhead costs.
Mr. Miller said his group also objected to the proposed distribution of the increases, in particular the steep rise in third-class rates, which are the most heavily used by nonprofit groups.
He said the rate hikes reflected a larger Reagan Administration effort to do away with all federal aid for nonprofit-mail service.
As it did a year ago, the Administration has proposed eliminating the federal subsidy for nonprofit-mail rates in its fiscal 1987 budget. (See Education Week, April 3, 1985.)
Rate Hikes
According to a spokesman for the Postal Rate Commission, Postal Service rates were scheduled to increase on March 9 by:
- 14 to 19 percent for third-class mail.
- 20 percent for classroom publications, such as My Weekly Reader, sent by second-class mail.
- 5 to 10 percent for nonprofit second-class mail, which many colleges and universities use for their publications.
- 10 to 12 percent for materials sent to and from libraries by fourth-class mail.
Some second-class nonprofit rates had jumped by as much as 95 percent in January, Mr. Miller said.
$72-Million Shortfall
The new increases are designed in part to make up for a $72 million shortfall in the fiscal 1986 Congressional subsidy for nonprofit mail.
But the new rates would also recoup for the Postal Service a $32 million cut in the subsidy under the Gramm-Rudman-Hollings law. The law required a 4.3 percent across-the-board spending cut in 1986 for most domestic programs.
The $72-million shortfall occurred because the subsidy factored in the Jan. 1 rate hikes, which were not in place during the first quarter of the fiscal year.
The Postal Service had planned to raise nonprofit rates on Jan. 18 to account for its projected deficit, but cancelled those increases because of errors it made in calculating the new rates.
