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Six of the United States Postal Service’s (USPS) new workshare
discount rates, that took effect yesterday, are shallower for nonprofit
mailers than for commercial mailers, and unfairly discriminate against
nonprofits, contends the Association of Nonprofit Mailers (ANM), based
in Washington, D.C.
Three of the new discounts -- high density
letters, high density flats, and automated 5-digit flats -- are higher
than the old rates, two categories (high density plus letters and high
density plus flats) are new and the discount for non-automated 3-digit
flats is slightly lower than the old rate. But the key issue is the
discrepancy between the nonprofit and commercial rates.
to ANM Executive Director Tony Conway, worksharing discounts are
provided when mail is prepared in certain ways, such as presorting it by
ZIP code, effectively taking some of the burden of sorting and
transporting off the United States Postal Service (USPS). The goal is to
create incentives to drive the most efficient mailing behavior.
difference is less than 4 percent or $0.003 per piece for four of the
categories (high density letters, high density plus letters, high
density flats and high density plus flats), with auto 5-digit flats
being 8 percent or $0.007 per piece and a 13.5 percent difference, or
$0.007 per piece, for non-automated 3-digit flats.
“We saw that
for certain types, nonprofits are receiving a lesser discount than
commercial counterparts,” said Conway. “We called the Postal Service on
that, raised the issue with the Postal Regulatory Commission (PRC) and
filed comments (in November) saying the discrepancies are not allowed by
Section 403(c) of U.S. Code Title 39 prohibits
discrimination among mail users when it establishes fees unless it has a
reasonable justification. The USPS claims it cannot equalize the
nonprofit and commercial rates “without setting the nonprofit base rate
higher than would be most efficient and preferable from a policy
perspective,” according to PRS Docket No. R2013-1. Conway said the
USPS’s argument boils down to setting rates being a complicated process
for everything to work perfectly all the time. That argument does not
hold water, said Conway.
“So the PRC, unfortunately, instead of
pushing back on the postal service, chose not to do that and told the
postal service they could implement the new rates,” said Conway. “From a
nonprofit standpoint, they’re doing the same things commercial mailers
are doing, and to be provided a lesser discount, that’s just blatant
discrimination for no good reason.”
Diana Aviv, president and
CEO of Independent Sector in Washington, D.C., said, “Independent Sector
has long worked to ensure that nonprofit organizations receive
equitable treatment under the law relative to their counterparts in the
for-profit sector. The proposed worksharing discount is another example
of the disparate treatment of nonprofit organizations that should be
rejected.” Independent Sector was a signatory along with eight other
organizations on a letter of protest that was sent to Rep. Darrell Issa
(R-Calif.), chairman of the Committee on Oversight and Government
Reform. Issa has previously helped to block legislation that would
eliminate the nonprofit rates.
Conway said his organization is
prepared to fight the new rates in court, but he hopes that will not be
necessary. When the PRC produces its annual compliance determination
report in the first quarter of 2013, Conway said he believes it will
recognize and correct the oversight. “It appears it was just sloppy work
by the postal service in designing new rates and inattention to the
argument we raised,” he said.
That is in contrast to two other
cases where Conway said the USPS deliberately kept the nonprofit sector
out of worksharing discounts. The first time was 1980, when worksharing
discounts were established. The USPS said the discounts were only
available to the commercial sector. The organization Easter Seals took
the USPS to court and won, and from that case ANM was born. In 1996, the
USPS again tried to discriminate against nonprofits, said Conway. This
time, ANM was the plaintiff and won the case.
If the PRC
continues to accept the USPS’s explanation for why some discounts are
lower for nonprofits, Conway said ANM will again go to court. “We hope
to get it straightened out through the regulatory process, but we’re
geared up to go to court and I’m confident we will prevail,” he said.
the new workshare discounts are allowed to stand, said Conway, that
would “drive more inefficiency and send the wrong signals.” It’s not so
much a question of revenue foregone, he said, as it is not allowing
discrimination against the sector. “We’re not talking about monstrous
overpayment, but it’s the principle,” said Conway. “To not (correct the
mistake), be called on it and just blow it off is wrong,” he said.