POSTAGE RATE HIKE CERTAIN; OFFICIALS DIFFER ON 29-, 30-CENT STAMPS

CAPE GIRARDEAU -- The cost of mailing a letter is going up.

"We don't know whether the increase will be 4 cents or a nickel," said Don Knoth, superintendent of postal operations here.

"The Postal Service has requested a 5-cent hike, from 25 to 30 cents," he said. "The Postal Rate Commission (PRC) recommended last week that the price of a first-class stamp be increased to 29 cents, a penny less than the Postal Service request." In explaining its reasoning, the rate commission, an independent government entity, said that first-class mail was paying more than its fair share.

The commission also trimmed a penny from the nickel increase that the Postal Service wanted on postcards, recommending that the price be 19 cents.

Meanwhile, the PRC proposed higher increases for "business bulk mailings," said Knoth. The Postal Service had recommended a 17 percent increase in the bulk mailings when it made its rate requests last March, but the commission suggested a 25 percent hike.

Final decisions rest with the Postal Service Board of Governors.

"The board will look at the rate proposals about Jan. 20," said Knoth. "It will make its decisions at that time, and the increases will take effect early next month, about Feb. 3."

The rate increases are likely to affect consumers in another way, as businesses pass along their own higher costs. Department stores will have to spend another 48 to 60 cents annually to bill one customer. Charges for sending advertising circulars, books, and magazines to American homes could create higher costs for consumers.

"We don't know what the exact figures will be on second-class mail," said Knoth, in reference to the mail classification that deals mostly with books, magazines and other literature items. "But, there will be some increase."

The last stamp price increase was announced three years ago, in April of 1988, when the cost rose from 22 to 25 cents for first class, and by about 18 percent for bulk mailings.

At that time, postal authorities said the first-class rate hike would cost the average customer about $10 a year. This year's hike could cost the average mailer $14 to $18 more annually, depending on which increase is agreed on.

"At this point, we don't know what the increases will be," said Mike Tenholder, direct mail manager for Concord Publishing, one of the heavy mail users here.

"We're not happy with any increase," said Tenholder. "Ultimately it will affect the consumer."

Tenholder said the firm has been discussing ways to offset the costs.

"With increased automation, there will be some corresponding discounts for mailers who sort their mail," said Tenholder. "A lot of bulk mailers will be able to take advantage of special sorting discounts, bar-coding discounts, and a `Zip-Plus Four' discount. "If bulk mailers take advantage of all the discount options, it will help hold down some costs."

Bulk mailers can also take advantage of discounts for first-class mail.

"This is not the case with the average man on the street," said Tenholder. "He/she is going to have to pay the increase, whether it's 4 cents or a nickel."

The penny difference can mean a big savings to the public.

A PRC spokesman said the reduction form 30 to 29 cents would save the public about $800 million a year.

Southeast Missouri State University is one of the biggest users of mail in and out of Cape Girardeau.

"We're second behind VIP Industries," said Charlie Hirsch, manager of receiving and mail services at the university. "Our bulk mailings will run about $75,000," said Hirsch. "You add another 17 percent to that and it's another $12,000. If it goes to the 25 percent increase, it's another $18,000."

That's just on bulk mail.

"We send out a lot of first-class mailings, too," added Hirsch. "We send out grades to all students twice a year, first-class. Along with our monthly billings. It all adds up."

The university, which is on the "non-profit" rate, has already taken measures to hold down mailing costs.

"We use a sorting service," said Hirsch. "This results in additional costs, and we'll also use bar-coding, which can help hold down costs."

The Post office filed for its higher rates last March, when it expected to lose $1.6 billion for the 1990 fiscal year that ended Sept. 30. But staff cuts (about 30,000) and increased automation held the loss to $874 million."

A VIP Industries spokesman said several of their accounts were already looking for alternate ways to get subscriptions to their subscribers.

"One of the big parts of our business is the packaging, sorting and mailing out of comic books," said Barry Zerbe, operational manager for VIP. "We mail out comics nationally and internationally. We receive comics here from U.S. and Canadian printing plants."

Zerbe added that some accounts may go from bulk class to second class, which may result in some savings. Other who are now mailing first class may go to second class.

"Again, ultimately, it will be the consumer who loses," said Zerbe.