The Postal Service can receive three types of appropriations from the federal government. These include appropriations for public service, transitional costs and revenue foregone. Currently, appropriations are made only for revenue foregone and they accounted for only 0.1 percent of total revenue in 2001. During 1971, the year preceding the creation of the Postal Service through the Postal Reorganization Act, these appropriations totaled over 23 percent of total revenue.

The Postal Service currently is authorized to request up to $460 million for public service costs. This is the amount authorized by statute in 1970 and is not intended to represent the present cost of providing universal service. The Postal Service has neither requested nor received any public service reimbursement since fiscal 1982.

The transitional cost category of reimbursement provides a means to fund costs related to the former Post Office Department (POD) and shelters current ratepayers from such costs. Workers’ compensation claims arising prior to July 1, 1971, are the last known POD cost. In the Balanced Budget Reform Act of 1997, Congress transferred responsibility for these costs to the Postal Service. Therefore, we have not received transitional cost appropriations since 1997.

In 2001, the Postal Service booked a revenue foregone reimbursement of $67 million to fund free mail for the blind and for overseas voting. That reimbursement was paid in October 2001, shortly after the close of the fiscal year.