OVERVIEW
While Government Institutions receive the bulk of their funding through inter-institutional transfers (taxes, fees, fines, etc.), they can also receive some funds as a result of the sale of some Commodities. Government Institutions also employ people and make expenditures to provide government services. These expenditures form part of Final Demand and are included in a region’s Social Accounting Matrix (SAM).
IMPLAN uses a variety of data sources in the production of Government Institution revenues, expenditures, and employment. This data is embedded in the IMPLAN SAM and Tax Impact report, which provides detailed tax and transfer information by level of government and type of tax or transfer for each Study Area geography.
In most cases, the data available in IMPLAN is much more detailed than what is available from raw data sources. As to be expected, lower geographic levels and more detailed tax categories have fewer raw data sources. The raw data sources used by IMPLAN in estimating these other elements vary depending on the type of tax or transfer, and in many cases a combination of data sources is used.
This article describes the data sources and methods used to estimate all aspects of Government Institution data, including government revenues and expenditures by level of government as well as data presented in the Tax Impact report. For a more detailed description of the tax types and Institutions that pay them, read Generation and Interpretation of IMPLAN’s Tax Report.
GOVERNMENT REVENUES
As mentioned previously, Government Institutions receive the bulk of their funding through inter-institutional transfers in the form of taxes, fees and fines, dividends, rents and royalties, and business transfers.1
The principal raw data source used for all Government Institution revenue and expenditure data elements is the Bureau of Economic Analysis’ (BEA) National Income and Product Accounts (NIPA) tables.2 This dataset provides national level controls for taxes by level of government and type of tax. The BEA NIPA tables report taxes by tax type for two levels of government: (1) Federal Government and (2) State & Local Government combined. These national-level controls are then distributed to states and counties using a variety of data sources.
As with the majority of IMPLAN data, all Federal Government and State & Local Government (combined) data elements are geographically controlled to the current-year U.S.-level values from the BEA NIPA tables, resulting in current, geographically balanced tax data by tax type. Likewise, all data must balance in that all taxes received by the government must equal the sum of all taxes paid.
The following subsections focus primarily on tax revenue and will describe the data sources and methods used in the generation of tax revenue data in the IMPLAN SAM and in the Tax Impact Report, by level of government. Note that the further breakout of State & Local Government into its constituent levels (State, County, Sub-County General, and Sub-County Special) is not reflected in the SAM but is reported in the Tax Impact report.
GOVERNMENT REVENUES IN THE IMPLAN SAM
Within the SAM, taxes flow to the Government Institutions from each of the four components of Value Added (Employee Compensation, Proprietor Income, Other Property Income, and Taxes on Production and Imports net of Subsidies) as well as from Households and from outside of the U.S.
Federal Government revenue data is only available at the national level and comes from the BEA NIPA tables. The BEA NIPA data also provides the control totals for State and Local Government (combined). Federal Government revenues and State and Local Government (combined) revenues are then distributed to states and counties using the following data sources, depending on the type of tax and level of government:
-
Bureau of Economic Analysis’ Regional Economic Accounts (BEA REA) data, specifically data from the following two tables:
- Table SA50 – Personal Tax and Non-tax Payments
- Table CA05- Personal Income by Major Source and Earnings by Industry
- Bureau of Labor Statistics’ Consumer Expenditure Survey (BLS CES) data
- An IMPLAN-derived State & Local Government Finances (S/L Gov) dataset, that itself is a combination of several raw data sources (described in more detail below).
- Other proxies (population, capital income of persons, etc.) where raw data is not available.
For example, a type of tax paid by Households is personal income tax. Raw data on personal income tax only provides personal income tax totals for just one Household category. Since IMPLAN has nine Household categories (grouped by household income), IMPLAN uses data from the Bureau of Labor Statistics’ Consumer Expenditure Survey (CES)3 to establish the tax-to-income relationships for each of the nine different Household Income categories as well as to distribute national tax data to states and state-level tax data to counties, using the number of households in each of the nine Household categories in the state or county.
GOVERNMENT REVENUES IN IMPLAN’S TAX IMPACT REPORT
As mentioned previously, the breakout of State & Local Government to its constituent levels (State, County, Sub-County General, and Sub-County Special) is not reflected in the SAM but is reported in the Tax Impact report. When conducting an impact analysis, the combined State and Local Tax impacts estimated using values in the SAM are then distributed to constituent levels.
As there is no single dataset that provides current year State and Local Government revenue data by level of government and tax type, IMPLAN derives a new State & Local Government Finances (S/L Gov) dataset that combines three U.S. Census Bureau data sources to estimate the taxes at these more detailed, lower levels of government. The following section describes those data sources and that process.
IMPLAN’s State & Local Government (S/L) Finances Dataset
The IMPLAN-derived State & Local Government Finances (S/L Gov) dataset combines data from 3 main data sources, all from the U.S. Census Bureau. Those data sources report tax by type, by unit of government (ergo by level of government), and by location, with various lags in data availability. Data is combined and ultimately controlled to the current year, national NIPA values. The data sources include the:
Census of Governments (COG). Every 5 years the U.S. Census Bureau conducts a detailed census of State & Local Government receipts and expenditures data. This is the most comprehensive data source for the State and Local government sector as it covers all State and Local Governments in the U.S., including counties, cities, townships, special districts, and school districts. When data is not available from the other two data sources below, IMPLAN supplements gaps with the 5-year Census of Governments data, inflating the data as appropriate.
Annual Survey of State and Local Government Finances (SLGF). The U.S. Census Bureau also collects annual State & Local Government receipts and expenditures data for all 50 states and D.C., with a lag of up to 3 years. This data acts as preliminary controls for state-level values (subject to controlling to the national NIPA values). The data also gives us the proportional split of the TOPI value among the various types (sales, property, etc.). The actual value of total TOPI (at the state level) comes from the BEA's REA series.
The annual survey also provides Local Government collections by tax type. IMPLAN uses this data to estimate, for the total State & Local tax receipts, the share of each type of tax that belongs to different levels of Local Government. IMPLAN then uses data for each Local Government to apportion that local total (at the state level) to each county. Since the local total for each county is known, IMPLAN can distinguish the State Government and Local Government tax revenue in the Tax Impact report. However, the SLGF does not cover all governments in the U.S., therefore IMPLAN supplements gaps with the COG data.
Annual Survey of State Government Tax Collections (STC). Finally, the U.S. Census Bureau produces current taxes collected for State Governments for all states in the U.S. IMPLAN supplements the lagged SLGF state tax revenue data with current-year State Government tax collections data from the STC.
Taxes by level of government at the State Government-level and lower levels of government are obtained by combining data from the three data sources listed above. The first step in the process is to get all data sources into the same year by inflating or deflating. IMPLAN then begins with the COG values because the Census is the most comprehensive data source. Data is then augmented with SLGF data to make the data more current and obtain any new values (that were not reported by the Census). If the taxing authority is covered by the SLGF, the SLGF’s more recent data is used. Finally, for State Government tax receipt data, there is even more current data from the STC data. For State Government tax data, the values from the STC replace the tax values from the combined data. This results in an IMPLAN-derived S/L Gov Finances dataset that is later used to help distribute State and Local Government tax data to states and counties. This IMPLAN-derived S/L Gov Finances dataset is located in IMPLAN’s Data Library. Read more about this data in Tax Data in Data Library.
Data Underlying the Tax Impact Report
The tables below clarify the underlying level of detail of the raw data for all line items in an IMPLAN Tax Impact Report. Industrial and geographic resolution are reported at their maxima and nest more aggregate levels. For example, if IMPLAN has raw data on property tax at the county level, that implies state-level data is also available. The time lags shown in the tables are relative to the IMPLAN data year. For example, a one-year lag means that when producing the 2023 IMPLAN data, the underlying data have a reference year of 2022. Timeliness is especially relevant for knowing whether changes in tax laws or economic conditions are reflected in the IMPLAN dataset.
The only Industry-level detail available from raw data sources for taxes is for TOPI, and it is for the entirety of TOPI, not the components of TOPI (e.g., sales tax, property tax, etc.). The components are only place- and level-of-government specific, not Industry-specific.
In the Survey of SLGF and IMPLAN's tax impact reports, the County Government values are distinct from the Sub-County Government values, in that the former is not a sum of the latter, but rather a distinct level of government with distinct types of taxes. A county can have Sub-County Government types of taxes without having County Government-type taxes. The same is true for State Government taxes; that category is not a roll-up of County Government and Sub-County Government taxes, but rather represents State-Government-levied taxes distinct from County-Government-levied, City-Government-levied, and Special-District-levied taxes.
For a more detailed description of the tax types and Institutions that pay them, read Generation and Interpretation of IMPLAN’s Tax Report.
Federal Government
Federal Government data comes from the BEA National Income and Product Accounts and is current year data.
| Level Of Government | Tax Impact Item | Maximum Industry Resolution of Underlying Data | Maximum Geographic Resolution of Underlying Data | Timeliness of Underlying Data |
|---|---|---|---|---|
| Federal | Social Insurance Tax- Employee Contribution | None | National level | 0 years lag |
| Federal | Social Insurance Tax- Employer Contribution | None | National level | 0 years lag |
| Federal | TOPI: Excise Taxes |
TOPI aggregate at BEA sectoring (approximately 80 sectors). TOPI detail has no industry resolution. |
National level | 0 years lag |
| Federal | TOPI: Custom Duty |
TOPI aggregate at BEA sectoring (approximately 80 sectors). TOPI detail has no industry resolution. |
National level | 0 years lag |
| Federal | Corporate Profits Tax | None | National level | 0 years lag |
| Federal | Personal Tax: Income Tax | n/a | National level | 0 years lag |
| Federal | Personal Tax: Estate and Gift Tax | n/a | n/a | n/a |
State Government
State Governments tax revenue data comes from the IMPLAN-derived State & Local Government Finances (S/L Gov) dataset. State Government tax revenues by county are allocated to counties based on a combination of other raw data sources and/or proxy information (e.g. personal income by county is used to estimate each county’s share of the parent state’s personal income tax revenue).
| Level Of Government | Tax Impact Item | Maximum Industry Resolution of Underlying Data | Maximum Geographic Resolution of Underlying Data | Timeliness of Underlying Data |
|---|---|---|---|---|
| State | Social Insurance Tax- Employee Contribution | None | State level | 0 years lag |
| State | Social Insurance Tax- Employer Contribution | None | State level | 0 years lag |
| State | TOPI: Property Tax |
TOPI aggregate at BEA sectoring (approximately 80 sectors). TOPI detail has no industry resolution. |
State level | 0 years lag |
| State | TOPI: Motor Vehicle License |
TOPI aggregate at BEA sectoring (approximately 80 sectors). TOPI detail has no industry resolution. |
State level | 0 years lag |
| State | TOPI: Severance Tax |
TOPI aggregate at BEA sectoring (approximately 80 sectors). TOPI detail has no industry resolution. |
State level | 0 years lag |
| State | TOPI: Other Taxes |
TOPI aggregate at BEA sectoring (approximately 80 sectors). TOPI detail has no industry resolution. |
State level | 0 years lag |
| State | TOPI: Special Assessments |
TOPI aggregate at BEA sectoring (approximately 80 sectors). TOPI detail has no industry resolution. |
State level | 0 years lag |
| State | Personal Tax: Income Tax | n/a | State level | 0 years lag |
| State | Corporate Profits Tax | None | State level | 0 years lag |
| State | Personal Tax: Motor Vehicle License | n/a | State level | 0 years lag |
| State | Personal Tax: Property Tax | n/a | State level | 0 years lag |
| State | Personal Tax: Other Tax | n/a | State level | 0 years lag |
County Government
Data for County Governments comes from the IMPLAN-derived State & Local Government Finances (S/L Gov) dataset. Data for County Governments is assigned to the counties containing those units of government.
| Level Of Government | Tax Impact Item | Maximum Industry Resolution of Underlying Data | Maximum Geographic Resolution of Underlying Data | Timeliness of Underlying Data |
|---|---|---|---|---|
| County | TOPI: Property Tax |
TOPI aggregate at BEA sectoring (approximately 80 sectors). TOPI detail has no industry resolution. |
County level | 1-2 years lag |
| County | TOPI: Motor Vehicle License |
TOPI aggregate at BEA sectoring (approximately 80 sectors). TOPI detail has no industry resolution. |
County level | 1-2 years lag |
| County | TOPI: Severance Tax |
TOPI aggregate at BEA sectoring (approximately 80 sectors). TOPI detail has no industry resolution. |
County level | 1-2 years lag |
| County | TOPI: Other Taxes |
TOPI aggregate at BEA sectoring (approximately 80 sectors). TOPI detail has no industry resolution. |
County level | 1-2 years lag |
| County | TOPI: Special Assessments |
TOPI aggregate at BEA sectoring (approximately 80 sectors). TOPI detail has no industry resolution. |
County level | 1-2 years lag |
| County | Personal Tax: Income Tax | n/a | County level | 1-2 years lag |
| County | Corporate Profits Tax | None | County level | 1-2 years lag |
| County | Personal Tax: Motor Vehicle License | n/a | County level | 1-2 years lag |
| County | Personal Tax: Property Tax | n/a | County level | 1-2 years lag |
| County | Personal Tax: Other Tax | n/a | County level | 1-2 years lag |
City & Special District Government
Data for City and Special Districts comes from the IMPLAN-derived State & Local Government Finances (S/L Gov) dataset. Data for City and Special District Governments is assigned to the counties containing those units of government.
| Level Of Government | Tax Impact Item | Maximum Industry Resolution of Underlying Data | Maximum Geographic Resolution of Underlying Data | Timeliness of Underlying Data |
|---|---|---|---|---|
| City/Special District | TOPI: Property Tax |
TOPI aggregate at BEA sectoring (approximately 80 sectors). TOPI detail has no industry resolution. |
County level | 1-2 years lag |
| City/Special District | TOPI: Motor Vehicle License |
TOPI aggregate at BEA sectoring (approximately 80 sectors). TOPI detail has no industry resolution. |
County level | 1-2 years lag |
| City/Special District | TOPI: Severance Tax |
TOPI aggregate at BEA sectoring (approximately 80 sectors). TOPI detail has no industry resolution. |
County level | 1-2 years lag |
| City/Special District | TOPI: Other Taxes |
TOPI aggregate at BEA sectoring (approximately 80 sectors). TOPI detail has no industry resolution. |
County level | 1-2 years lag |
| City/Special District | TOPI: Special Assessments |
TOPI aggregate at BEA sectoring (approximately 80 sectors). TOPI detail has no industry resolution. |
County level | 1-2 years lag |
| City/Special District | Personal Tax: Income Tax | n/a | County level | 1-2 years lag |
| City/Special District | Corporate Profits Tax | None | County level | 1-2 years lag |
| City/Special District | Personal Tax: Motor Vehicle License | n/a | County level | 1-2 years lag |
| City/Special District | Personal Tax: Property Tax | n/a | County level | 1-2 years lag |
| City/Special District | Personal Tax: Other Tax | n/a | County level | 1-2 years lag |
GOVERNMENT EXPENDITURES
GOVERNMENT EXPENDITURES IN THE IMPLAN SAM
Federal Government expenditure and investment data comes from the latest BEA Benchmark I-O tables4, 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.
IMPLAN combines several data sources to get State & Local Government expenditure data. IMPLAN begins with expenditure data from the latest Census of Government (inflated to the proper year). IMPLAN then replaces any Census values with any available equivalent values from the Census Bureau’s annual State and Local Government Finances Survey.
These State & Local Government expenditure 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 is given commodity specificity upon controlling to U.S. commodity-specific values, which come from the latest BEA Benchmark controlled to current NIPA totals. These state-level commodity-specific State and Local Government values are then distributed to the counties based on Employment.
GOVERNMENT EXPENDITURES AS AN IMPACT TYPE
In the standard/default input-output (I-O) modeling framework, any government revenue accrued or generated in an impact analysis is not re-spent. Thus, government expenditures are included in the IMPLAN SAM, but do not generate additional multiplier effects. Learn more about this in our Leakages webinar.
To model Government expenditures, users can select an Institutional Spending Pattern Event. This type of event is used to model a general change in an Institution’s spending such as the Local Government’s spending on education. For more information please read Institutional Spending Pattern Events.
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.
OTHER RESOURCES
Video: IMPLAN’s Tax Data
RELATED ARTICLES
Generation and Interpretation of IMPLAN’s Tax Report
1Consists of payments to the Federal government in the form of premiums for deposit insurance, fees for regulatory and inspection activities, and fines; payments to state and local governments in the form of fines, tobacco settlements, and donations; and net insurance settlements paid to governments as policyholders (BEA).
2Section 3 of the NIPA tables covers Government Current Receipts and Expenditures.
3The Bureau of Labor Statistics conducts surveys and diary samplings of household expenditure patterns (the CES). The survey data are reported for nine different categories of household income, which we control to the NIPA’s Personal Consumption Expenditure (PCE) totals (which are not split out by income category). From these data, we can establish the tax-to-income relationships for the nine different household income categories and distribute national tax data to lower geographies.
4The BEA Benchmark Input-Output (I-O) accounts are prepared every five years and provide detailed statistics on economic processes and relationships across industries and institutions.
Written April 18, 2024
Updated August 30, 2024