Postal Service Loss for ’87 Could Soar to $225 Million
WASHINGTON — The Postal Service, after making a profit in 1986, will lose much more than expected in fiscal 1987, as much as $225 million, due to slow growth in mail volume and budget overruns, Postmaster General Preston R. Tisch said today.
Tisch, talking to reporters at the National Press Club, said the Postal Service had projected it would break even or lose, at most, $1 million in the fiscal year that ended Sept. 26.
Early figures, however, show the mail service will lose between $200 million and $225 million on revenues of about $35 billion, Tisch said, adding that he was not happy with the results.
The Postal Service had expected about $500 million more in revenues for the period, but mail volume increased slower than projected. At the same time, attempts to trim expenditures fell $105 million short of what was planned.
Tisch said that even if the Postal Rate Commission approves a hike in the price of a first-class stamp--from 22 cents to 25 cents--a shortfall of $400 million is expected in 1988.
He said he expects approval of a requested 33% to 36% rate hike for second- and third-class mail, with the higher rates going into effect between April 7 and April 17 next year.
“We need the rate adjustment we asked for,†he said, calling it a “moderate†change that would cost the average American household about $20 a year. “We’re not going to cut service,†he vowed.
The Postal Service showed a $350-million profit in 1986 but had losses in 1984 and 1985. Under law, the mail service has the mandate to break even over the long run.
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