U.S. Postal Service officials today said they are moving ahead with a $3 billion cost saving plan that would close more than half the 460 mail processing facilities, slowing down first class deliveries. That may eliminate the chance of a first class letter arriving anywhere the day after being mailed.
The moves will bring cut backs at five Minnesota facilities, costing 185 jobs.
There's no doubt more cuts will come as the service tries to stay out of bankruptcy while trying to satisfy political demands to preserve small post offices and rural deliveries.
Q: Do taxpayers fund the Postal Service?
No. While its operations are regulated by the federal government, the USPS gets no tax money to operate. Revenue comes from postage, mail and package delivery - and that's part of the problem. First class and standard mail still generates about 75 percent of Postal Service revenue, but that mail volume's been on a steep decline in an age of email.
Q: How bad is the Postal Service's financial condition?
A: With total losses topping $25 billion the past five years ($21 billion tied to pre-funding of retiree health benefits) the service is nearly out of cash.
"The Postal Service literally won't survive without legislative and administrative reforms," Sen. Susan Collins, R-Maine, said last month . "Absent action, it won't be able to meet its payroll a year from now."
In a recent speech, Postmaster General Pat Donahoe noted that about 25,000 of 32,000 post offices in the U.S. operate at a loss. Thousands of those offices, he said, bring in less than $20,000 a year but cost more than $60,000 to operate and are within a few miles of another post office.
Donahoe also acknowledged the political realities. "The reaction from attempting to close a low-activity post office and provide another option is something to behold. People rally around the local post office. They do so because we are a cherished institution."
Q: Could anything make the Postal Service profitable again?
A: Postal officials say they could get the service back on sound financial footing by ending Saturday service, shifting employee health coverage from the federal government system to private carriers, getting refunds for overpayment into the federal retirement system and getting more flexibility from Congress to get faster approval for rate increases.
The politics of that are difficult, however.
Collins and other U.S. senators have drafted legislation that would allow the USPS flexibility on the health coverage issue and provide funds to help buy out as many as 100,000 employees over the next three years.
But that bill would also stop for two years any Postal Service plan to eliminate Saturday delivery.
Q: How will the Post Office facility plans affect Minnesota?
Operational cutbacks are coming to five mail processing centers in Bemidji, Duluth, St. Cloud, Mankato and Rochester, according to Pete Nowacki, the U.S. Postal Service spokesman for Minnesota. These were first announced in September.
In most cases, the centers will continue to sort mail headed to the small towns and cities in their region, Nowacki said. The work they will lose is sorting mail going the other direction, from those towns to the rest of the world. That mail will be bundled and taken to mail processing centers in St. Paul or Minneapolis.
Overall, about 185 jobs are expected to be cut in those facilities.
Q. What will get to me slower?
The Postal Service didn't detail what kinds of deliveries would be delayed in the new plan.
The Washington Post, however, reports it "could slow everything from check payments to Netflix's DVDs-by-mail, add costs to mail-order prescription drugs, and threaten the existence of newspapers and time-sensitive magazines delivered by postal carrier to far-flung suburban and rural communities."
MPR News reporter Mark Steil contributed to this report.