Estimating Administrative Government Revenues & Expenditures

OVERVIEW

In contrast to Government Enterprises, which are funded largely by way of direct payments for services provided, and thus are treated as standard Industries in IMPLAN, Government Institutions receive the bulk of their funding through inter-institutional transfers (taxes, fees, fines, etc.). Government Institutions do also receive some funds as a result of the sale of some Commodities, known as Institutional Sales. 

Additionally, Government Institutions employ individuals to work for Federal, State, or Local Government agencies and make expenditures to provide government services. Government Institutions purchase these goods and services as Final Demand. This demand is included in the full-detail IMPLAN SAM, but does not generate multiplier effects.

This article describes the data sources and processes used to estimate Government Institution revenues and expenditures.

REVENUES

FEDERAL GOVERNMENT 

Federal Government revenues data come from the BEA’s National Income and Product Account (NIPA) tables and the BEA’s Benchmark Input-Output tables, with the exception of the timber sales data, which are from the U.S. Forest Service. Federal Government receives revenues in the following forms:

  • From Industry:
    • Social Security tax
    • Transfer payments from businesses
    • Rents and royalties
    • Excise tax
    • Custom duty
    • Dividends
    • Corporate profits tax
  • From Households:
    • Personal income tax
    • Transfers from persons
  • Other sources of revenue:
    • Taxes from rest of world
    • The sale of goods and services

STATE AND LOCAL GOVERNMENT 

State and Local Government revenues data are obtained from a combination of the Census of State and Local Government Finances, the Annual Survey of State and Local Government Finances, the Annual Survey of State Government Tax Collections and the BEA’s NIPA tables. Depending on the state, State and Local Government receives revenues in the following forms:

  • From Industry:
    • Social Security tax
    • Transfer payments from businesses
    • Rents and royalties
    • Sales tax
    • Property tax
    • Motor vehicle tax
    • Severance tax
    • Other taxes
    • Special assessments
    • Dividends
    • Corporate profits tax
  • From Households:
    • Personal income tax
    • Transfers from persons
    • Motor vehicle licenses
    • Personal property tax
    • Fishing and hunting licenses
  • Other revenue sources
    • Intergovernmental Transfer
    • The sale of goods and services

EXPENDITURES

FEDERAL GOVERNMENT DEFENSE AND NON-DEFENSE

Federal Government expenditure, sales, and investment data come from the latest BEA benchmark I-O tables, adjusted to NIPA control totals for the current year. National-level values are distributed to states and counties based on Employment and Employee Compensation in Federal Defense and Non-Defense at the state and county level.

The one exception is Federal sales of stumpage, which is defined to be the sales volume of timber harvested (which includes sawlogs and all convertible volume) from National Forest land, and thus represents sales activity of the U.S. Forest Service (USFS). The USFS provides unpublished timber sales data at the state and county levels to IMPLAN. The data is obtained from a database maintained by the Washington Office Timber Sale Accounting (TSA branch). The data consist of:

  1. Normal distribution or revenues received by the USFS as a result of the timber sales.
  2. Purchaser Road Credits (PRC) directly related to the stumpage volume.
  3. Associated charges to purchasers not directly related to stumpage, including items such as road maintenance, slash disposal, and coop scaling.

STATE AND LOCAL GOVERNMENT EDUCATION, HOSPITALS AND HEALTH SERVICES, AND OTHER SERVICES

IMPLAN combines several data sources to get State and Local Government purchases and sales data. We start with values from the latest Census of Government (inflated to the proper year). We then replace any Census values with any available equivalent values from the Census Bureau’s annual State and Local Government Finances Survey.

These data are totals – i.e., they do not have commodity specificity. At the state level, the resulting data represents the purchases and sales of State Government and Local Government combined, whereas at the county level, the data represents Local Government only. The state-level State and Local Government combined data are given commodity specificity upon controlling to U.S. commodity-specific values, which come from the latest BEA Benchmark controlled to current NIPA control totals. These state-level commodity-specific State and Local Government values are then distributed to the counties based on Employment.

GOVERNMENT INSTITUTION EMPLOYMENT

IMPLAN combines several data sources to get Federal, State, and Local Government Employment estimates. This includes BEA Benchmark, BEA’s Regional Economic Account (REA), and BLS’ Census of Employment and Wages (CEW) data. Read more about this process in Special Industries.

RELATED ARTICLES

Generation and Interpretation of IMPLAN’s Tax Report

 

Written April 18, 2024

Updated June 24, 2024