Government May Examine Agencies' Mail Costs

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The U.S. Postal Service is concerned that a proposal calling for government offices to track and manage their mail expenses better may affect agency revenues.

The General Services Administration is proposing changes to federal mail policy that would require government agencies to track the mail costs of each office by October 2002. The GSA says the move would encourage federal offices to watch, and ultimately reduce, the estimated $1 billion they spend on mail annually.

Agencies also would have to submit annual comprehensive mail management plans to the GSA and develop performance measures for tracking mail operations.

"This could have a negative effect on us," said Richard J. Strasser, the USPS chief financial officer, "but it may also help the agencies control the amount of money they spend on expedited mail from other carriers. As a result they might send more regular U.S. mail, so it could have a beneficial effect for us."

However, Strasser said government spending on mail, as a proportion of USPS revenue, "has been a declining share for several years now" as more agencies shift to electronic transmissions.

One area where there will be an increase in government spending this year is the $40 billion in tax refunds promised in President Bush's tax bill. Those refunds will cost the federal government $115.8 million to process and will give the ailing postal service somewhat of a revenue boost.

According to the Treasury Department's Financial Management Service, $49 million of the budget will go to paper, labor, machinery maintenance and postage. Postage will cost $40 million.

"We welcome the extra First-Class mail volume," Strasser said. "We were also pleased that they made the decision to mail them all instead of transmit them electronically into bank accounts."

However, Strasser said that overall, "$40 million is [0.05 percent] of our annual revenue, so it doesn't affect us that significantly."

The Internal Revenue Service and the Treasury Department will begin sending advance payments later this month under a tax law passed by Congress and signed by President Bush.

The first checks will go out the week of July 23, and most of the mailings will be completed by the end of September.

A task force of about 20 employees of the IRS, the FMS, the USPS and the Defense Department's Finance and Accounting Service is working to get the refunds mailed by September. The FMS and the DFAS are setting up eight disbursement and debt centers around the country to mail 11 million checks per week.

The bill provides for refunds, beginning in July, of up to $300 for single filers, $500 for people filing as heads of households and $600 for married couples filing jointly.

The IRS will use a USPS address database and has urged taxpayers to make sure the postal service has their correct addresses.


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