{"id":34394,"date":"2023-09-17T08:29:14","date_gmt":"2023-09-17T13:29:14","guid":{"rendered":"https:\/\/postalemployeenetwork.com\/news\/?p=34394"},"modified":"2023-09-17T08:29:14","modified_gmt":"2023-09-17T13:29:14","slug":"prc-chairman-not-happy-with-budget","status":"publish","type":"post","link":"https:\/\/postalemployeenetwork.com\/news\/2023\/09\/17\/prc-chairman-not-happy-with-budget\/","title":{"rendered":"PRC Chairman Not Happy with Budget"},"content":{"rendered":"
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Chairman Kubayanda Statement on PRC Budget<\/h2>\n<\/div>\n<\/div>\n<\/div>\n
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Statement of Michael Kubayanda, Chairman of the Postal Regulatory Commission, on the Adjustment to the Commission\u2019s Budget<\/strong>\u00a0by<\/strong>\u00a0the<\/strong>\u00a0Governors of the United States Postal Service<\/strong><\/p>\n

9\/13\/23 – I appreciate the Governors\u2019 approval of a budget but am disappointed that they declined to fund the Commission\u2019s modest request of $22.6 million, less than .03 percent of Postal Service revenues. Most importantly, this process raised red flags about potential risks to the Commission\u2019s independence.<\/p>\n

The Governors did\u00a0acknowledge<\/a>\u00a0that the Commission\u2019s total FY 2024 costs are $27.2 million. I thank the Governors for recognizing this, as it is important for the Commission\u2019s trajectory. While the $27.2 million cited by the Governors is $1.5 million less than the Commission\u2019s projected costs, this amount must serve as a baseline for FY 2025 and longer-term budgets funded by the Postal Service to avoid degrading the Commission\u2019s capacity, eliminating positions in the understaffed agency, and stopping long overdue technology upgrades.<\/p>\n

Congress created the Commission to provide transparency and accountability of the Postal Service. This budget cycle appeared to reverse the agencies\u2019 statutory roles. The Governors asserted that their adjusted budget is \u201centirely sufficient\u201d and questioned the Commissioners\u2019 judgment about regulatory staffing levels, use of outside expertise, and capital investments.<\/p>\n

Stewardship of Postal Service funds is important, as the Governors note, even for small amounts relative to the size of the agency. However, Congress did not intend for the Postal Service to determine the scope of its regulator\u2019s activities. The Comptroller General of the United States\u00a0cautioned<\/a>\u00a0a prior group of Governors applying the same budget provision that \u201cthe scope of the activities of the Commission should not be subject to the perceptions of the Governors or the state of the Service\u2019s financial condition.\u201d The Comptroller General highlighted for the Senate the potential for \u201cabuse by the Postal Service\u2019s Board of Governors of its approval authority over the amount the Commission can spend.\u201d The Governors have historically respected these concerns.<\/p>\n

Future Commission Budgets Will Need to Cover Long-Term Costs<\/strong><\/p>\n

The $21.124 million provided by the Governors will not cover the Commission\u2019s increased expenses for FY 2024: rent and cost of living adjustments (COLAs) for current employees. Rent and COLAs will increase the Commission\u2019s expenses by $2 million next year; yet the Governors increased their funding of the Commission by $0.5 million over the FY 2023 approved budget.<\/p>\n

Even as the Governors acknowledge the Commission\u2019s $27.2 million in overall costs, they assume that essential and recurring expenses can be funded from other limited sources of funding. The Commission won two competitive\u00a0awards<\/a>\u00a0from the Technology Modernization Fund, funded by the\u00a0executive<\/a>\u00a0branch rather than postal ratepayers, that can be used only for technology investment.<\/p>\n

The Commission also utilizes a fixed multi-year fund held by the Postal Service to pay for consulting and non-recurring expenses such as capital investments in infrastructure. These expenses were not included in the Commission\u2019s $22.6 million budget request to the Governors.<\/p>\n

The Commission believes it is prudent to match recurring costs such as employee compensation and facilities with long-term funding in its annual budget received from the Postal Service. By declining to cover the full $22.6 million requested by the Commission, the Governors are effectively forcing the Commission to pay for recurring costs out of the fixed multi-year account. Unless the Governors are willing to fully fund regulatory expenses on an annual basis going forward, long-term expenses could exceed long-term funding and require regulatory cutbacks that would harm the public interest.<\/p>\n

In a micro agency, describing growth through percentages can be misleading. For perspective on the percentage growth numbers cited by the Governors, in the last two years the Commission has seen the following.<\/p>\n