Appendix E Data Source and Accuracy Statements
Appendix E Data Source and Accuracy Statements
Chapter 3 Transportation and the Economy
TABLE 3-1a & 3-1b. U.S. Gross Domestic Product
Attributed to For-Hire Transportation Services
(Current and chained 1996 dollars)
TABLE 3-2a & 3-2b. U.S. Gross Domestic Product
Attributed to Transportation-Related Final Demand
(Current and chained 1996 dollars)
TABLE 3-3a & 3.3b. U.S. Gross Domestic Demand Attributed to Transportation-Related Final Demand (Current and chained 1996 dollars)
TABLE 3-4a & 3-4b. Contributions to Gross Domestic Product: Selected Industries (Current and chained 1996 dollars)
TABLE 3-5. Gross Domestic Product by Major Social Function
Tables 3-1 through 3-5 present data on transportation's contributions to the economy through consumption (or the money spent on transportation activity). The Survey of Current Business (SCB) published by the U.S. Department of Commerce, Bureau of Economic Analysis (BEA). The SCB is a monthly journal that contains estimates of U.S. economic activity, including industry contributions to the Gross Domestic Product (GDP). GDP is defined as the net value of the output of goods and services produced by labor and property located in the United States. BEA constructs two complementary measures of GDP-one based on income and the other on expenditures (product). Together, they represent the National Income and Product Accounts (NIPA), our nation's principle framework for macroeconomic estimates. The product side results from the addition of labor, capital, and taxes for producing output. Consumption derives from household, business, and government expenditures and net foreign purchases.
Table 3-3 presents transportation's economic impact in a different form, Gross Domestic Demand (GDD). Also derived from the national accounts, GDD is the sum of personal consumption, gross private domestic investment, and government purchases. GDD includes imports, but excludes exports, thus counting only what is consumed, purchased, or invested in the United States.
The 1960 through 1985 data in table 3-1 are from the November 1993 issue of the SCB. The 1990 through 1991 data and 1992 through 1996 data are from an August 1996 and November 1997 SCB issue respectively. The October 1999 issue introduced a revised methodology for GDP estimates (Yuskavage 1996). This section describes BEA's methodology for estimating transportation's share of GDP.
BEA's current-dollar estimates of GDP by industry rely on several sources, including the Bureau of Labor Statistics (BLS), the Health Care Financing Administration, and the Internal Revenue Service (IRS). Some of the tables in this chapter report chained-dollar figures. BEA derived chained dollars by using the Fisher Ideal Quantity Index to calculate changes between adjacent years (Parker and Triplett 1996; Landerfeld and Parker 1997). Annual changes are then chained to form a time series that incorporates the effects of relative price and output composition changes. Please refer to page 142 of the August 1996 issue of the Survey of Current Business for the mathematical formulas (Yuskavage 1996). This method produced separate estimates of gross output and intermediate inputs for a sector's GDP calculation. BEA updated the reference year for the chained-dollar estimates from 1992 to 1996.
Transportation GDP in chained dollars was estimated using the double-deflation method, which relies on a chain-type quantity index formula, and requires gross output and intermediate input information. Principal source data for the transportation categories include: 1) operating revenues of air carriers and Federal Express from the U.S. Department of Transportation and public sources (air); 2) operating revenues for Class I motor carriers from historical records of the Interstate Commerce Commission and Census Bureau annual surveys (trucking and warehousing); 3) BEA personal consumption expenditures (PCE), BLS, and trade sources (local and interurban passenger transit); 4) operating revenues for Class I railroads and Amtrak (rail); and 5) other trade sources (pipelines).Data sources for water were not provided (Yuskavage, 1996).
Table 3-1 reported current dollar estimates from various SCB issues. BEA derived the 1991 data and subsequent years in four steps:
- BEA's benchmark input-output (I-O) tables produced input compositions for 1977, 1982, and 1987.
- BEA estimated 1978 through 1981 and 1983 through 1986 input compositions by interpolating the 1977, 1982, and 1987 figures.
- BEA estimates the 1977 through 1987 imported and domestically imported shares of each detailed input.
- BEA estimates the 1988 through 1994 input compositions based on the 1987 figures and the Economic Censuses of 1992.
For intermediate input estimations, BEA deflates each of the current-dollar inputs. (BEA deflates import and domestic production separately.) For deflation, quantities are approximated by real values (expressed at present with 1996 as the base period) that are calculated by dividing the current-dollar value of the component by its price index. BEA develops estimates for import prices with data from a variety of sources, but primarily from the BLS import price series.
Reliability and Accuracy
BEA views GDP as a reliable measure of output because of the source data underlying the estimates. The following reliability comments are based on the Valliant (1993) SCB article and Ritter (2000). GDP data originate from three types of sources. The foundational data come first from the economic censuses conducted every five years. These approach complete enumerations of sectoral activity in state and local governments, manufacturing, services, retail trade, wholesale trade, construction, transportation, communications and utilities, mining, finance, insurance, and real estate. Annual estimates form the second tier of GDP data and emanate form sources such as IRS tax returns and smaller surveys of establishments. The Annual Retail Trade Survey, for instance, forms one of the major components of the annual estimates. The U.S. Census Bureau collects sales and end-of-year inventory data from about 22,000 retail firms totaling $2 trillion of the $8.8 trillion GDP amount. While considered reliable by many economists, sampling variability may introduce errors into these annual estimates. Moreover, the Census Bureau imputes (substitutes estimates for missing or clearly incorrect data) about 11 percent of reported national annual retail sales because of accounting inconsistencies or raw survey data errors. The third component of the GDP flows from quarterly estimates.
In the October 1993 SCB, Valliant described the reliability and accuracy of the quarterly estimates of GDP, providing insights into the pre-1985 data in terms of dispersion and bias. BEA followed a schedule that produced three successive "current" estimates; advanced, preliminary, and final. BEA analysts developed a dispersion and bias measure based on the difference between these three estimates.
Dispersion is the average of the absolute values of the revisions, or, the difference between P, representing the percentage change in the current estimates, and L representing the percentage change in the latest available estimates, divided by n, representing the number of quarterly changes. Bias is the average of the revisions. According to the October 1993 SCB, dispersion averaged 1.6 percent from 1958 to 63 and dropped to 1.1 percent for 1968 to 1972. BEA stated that these declines in dispersion correspond with more accurate initial and final estimates subsequent to the late 1950s.For years after 1973 until 1991, the BEA concluded that more accurate source data for preliminary and final estimates did not improve reliability by much. BEA also determined that bias was not large enough from 1978 to 1991 to be significant under normality assumptions at the five- percent confidence level. Overall, for the period beginning in 1978 and covering the 1985 data from table 3-1, the BEA concluded there was no evidence of reliability increases. BEA also questioned its own estimating procedures and, in particular, the use of disparate sources of data, which may explain why reliability levels have not increased.
The NIPA framework also undergoes major updates referred to as comprehensive, or benchmark revisions. Eleven of these have been completed including one in 1996 and most recently on October 28, 1999 that provided the data for tables 3-1 through 3-5.The major change encompassed a definitional change reflecting our evolving economic system. Software became a business investment rather than just a "purchased input," or the equivalent of raw material. Unless the company increased the price of its product to cover software purchases, no impact registered in the GDP. With this benchmark revision, the Census Bureau increased the 1996 estimate by $115 billion, or 1.5 percent--the amount of software investments made in that year. Another change involved the Census Bureau's interpretation of the value of "unpriced" banking services such as ATM (automatic teller machine) contributions to an establishment's productivity. Previously, banking service productivity relied only on an index constructed from labor input. Economists argued that this ignored productivity gains from technological improvements such as ATMs and electronic banking. The BLS developed a productivity based instead of bank transactions, and this was used in the 1999 revision. For more detail, readers should refer to Moulton and Seskin (1999).
Sources of Error for GDP Estimates
The GDP estimates can contain several kinds of error. One source of error arises from estimates based on preliminary or incomplete tabulations of source data or BEA judgment in the absence of data. Errors may also arise because of sampling errors and biases in monthly, quarterly, annual, or periodic tabulations. Another source of potential error may arise when data are seasonally adjusted. Readers should refer to the October 1993 SCB issue for more detail (Young 1993).
NIPA and Transportation-Related Final Demand
For table 3-2, transportation-related final demand (TRFD) is from NIPA reported in the SCB. It represents the sum of all consumer and government expenditures for transportation purposes, plus the value of goods and services purchased by business as investment for transportation purposes. Since TRFD includes only expenditures on the final products of the economy, it is comparable to GDP and provides a measure of transportation's importance from a consumption perspective.
NIPA tables report the composition of production and the distribution of incomes earned in production. The totals of these produce a GDP estimate that should theoretically be equal, but there is always a difference referred to as the "statistical discrepancy." NIPA is based on four subaccounts of national economic activity. These include 1) the personal income and outlay account, 2) the gross savings and investment account, 3) the government receipts and expenditures account, and 4) the foreign transactions account.
Personal Consumption Expenditures (PCE) for transportation include 1) road motor vehicles, such as new and used automobiles, and motorcycles; 2) motor vehicle parts, such as tires, tubes, accessories; 3) motor fuels and lubricants; and 3) transportation services, such as repair, greasing, washing, parking, storage, rental, leasing, tolls, insurance, and purchased local and intercity transportation services. Motor vehicles used primarily for recreation, boats, noncommercial trailers, and aircraft are excluded.
Gross private domestic fixed investment in transportation includes private purchases of transportation structures and equipment. Transportation structures include railroads and petroleum pipelines. Transportation equipment consists of automobiles, trucks, buses, truck trailers, aircraft, ships and boats, and railroad equipment.
Goods and services that are counted as part of transportation-related exports include 1) civilian aircraft, engines, and parts; 2) road motor vehicles, engines, and parts; 3) passenger fares, including receipts of U.S. air and ocean/cruise carriers for transporting non-U.S. residents between the United States and foreign countries or between two foreign points; and 4) other transportation. The total for road motor vehicles, engines and parts excludes boats, aircraft, and noncommercial trailers. Other transportation includes 1) the freight revenues of U.S.-operated ocean, air, and other carriers (e.g., rail, pipeline, and Great Lakes shipping) for international transport of U.S. exports and for transporting foreign freight between foreign points; 2) port expenditure receipts (representing payments for goods and services purchased in the United States by foreign-operated carriers); and 3) receipts of U.S. owners from foreign operators for the charter of vessels and rental of freight cars and containers.
Goods and services that are counted as part of transportation-related imports include 1) civilian aircraft, engines, and parts; 2) road motor vehicles, engines, and parts; 3) passenger fares, including payments to foreign air and ocean/cruise carriers for the transportation of U.S. residents between the United States and foreign countries or between two foreign points; and 4) other transportation. The total for road motor vehicle, engines and parts excludes boats, aircraft, and non-commercial trailers. Other transportation includes 1) freight revenues of foreign-operated ocean, air, and other carriers (e.g., rail, pipeline, and Great Lakes shipping) for international transport of U.S. imports and for the transportation of foreign freight between foreign points; 2) port expenditure receipts (representing payments for goods and services purchased in foreign countries by U.S.-operated carriers); and 3) payments to foreign owners from U.S. operators for the charter of vessels and rental of freight cars and containers.
Transportation-related government purchases include federal, state, and local purchases of transportation services, and government expenditures on transportation-related structures and equipment. Federal, state, and local purchases represent the sum of consumption expenditures and gross inventory. Defense-related purchases include expenditures on the transportation of materials (care and movement of goods by water, rail, truck, and air); the rental of trucks and other transportation equipment and warehousing fees; and travel of persons (care and movement of Department of Defense military civilian employees), including tickets for all modes of travel, per diem, taxi fares, automobile rental, and mileage allowances for privately owned vehicles.
This data source and accuracy statement is based on several papers that have appeared in the SCB. Data users who desire more methodological detail can refer to the list of references at the end of this chapter.
TABLE 3-6. National Transportation and Economic Trends
The Statistical Abstract of the United States published by the U.S. Department of Commerce, Census Bureau, is the source of the population data. The Current Population Reports are the source of the Abstract's data that are collected through the Current Population Survey (CPS). This is a monthly survey administered by the Census Bureau of a scientifically selected sample representative of the noninstitutional civilian population in 754 areas covering every state and the District of Columbia. Like other surveys, the CPS is subject to sampling error. Readers should note that estimates based on the CPS may not agree with census counts because different procedures are used. Changes in the CPS also mean that annual comparisons must be made with caution. For instance, in 1994, the CPS methodology was dramatically changed, and the estimates began to incorporate 1990 census population controls, adjusted for the estimated undercount.
Industrial production data come from the Industrial Production Index, produced by the Board of Governors of the Federal Reserve System and published in the Economic Report of the President. For annual figures, individual industrial production (IP) indexes are constructed from a variety of sources, including the quinquennial Censuses of Manufactures and Mineral Industries; the Annual Survey of Manufactures, prepared by the Census Bureau; the Minerals Yearbook, prepared by the U.S. Department of the Interior; and publications of the U.S. Department of Energy. The Federal Reserve Board (FRB) uses these data in a modeling framework to produce estimates of industrial production. Below are brief discussions on three major sources for the IP indexes; the survey of manufactures, the census of manufactures, and the electric utility survey.
Annual Survey of Manufacturers
The Census Bureau conducts a mail survey of approximately 55,000 manufactures with three different sample strata. The sampling frame is based on previously surveyed firms and is updated annually based partially on IRS administrative records and other sources. Large manufactures (shipments > $500 million, and > 250 employees), some computer manufacturing firms, and all remaining firms with at least 250 employees are selected. Establishments with employment generally ranging from 20 to 250 employees are sampled with a probability proportional to a composite measure of establishment size. Approximately 5,000 of the smallest firms (5 to 20 employees) are also sampled and receive a shorter survey instrument. Additional information on the survey, readers should refer to www.census.gov/econ/www/ma0300.html.
Census of Manufacturers
The Census of Manufactures collects data through mail surveys from approximately 237,000 multiunit and single-unit firms with a minimum payroll figure. This census is supplemented by IRS administrative data from over 142,000 firms not contacted by mail. For additional information on the census, readers should refer to www.census.gov/econ/www/ma0100.html.
Electric Utility Survey
Since 1971, the FRB has conducted the Monthly Survey of Industrial Electricity Use based on responses from utilities and manufacturing and mining firms that are cogenerators. This survey is the basis for estimates of the amount of electricity power used by 120 industrial sectors. More than 40 industrial production series estimates are based on data from this survey and compose 28 percent of the Industrial Production Index in 1994 value-added proportions.
Survey responses are voluntary and are gathered from a panel of 175 utilities and 186 cogenerating companies with a monthly response rate near 95 percent. In 1992, an additional 71 new cogenerators joined the panel. This resulted, according to an FRB statistical analysis, in a decrease of the standard deviation of errors for electricity growth rates from 3.0 to 1.9 percentage points. Overall, the estimates for total power use produce a standard error of about 0.5 percentage points. The panel accounts for approximately 73 percent of industrial electric power use in the United States.
The Survey of Current Business, published by the U.S. Department of Commerce, Bureau of Economic Analysis, is the source of GDP estimates. Readers should refer to the source and accuracy statement for tables 3-1 through 3-5 for information on GDP estimates.
TABLE 3-7. Passenger and Freight Transportation Expenditures
Detailed information from the source was not available at the time of publication. Readers should contact the Eno Transportation Foundation, Inc. directly for information about methodologies and reliability.
TABLE 3-8. Sales Price of Transportation Fuel to End-Users
The U.S. Department of Energy, Energy Information Administration's (EIA's) Monthly Energy Review, tables 9.4 and 9.7, provided price data, except for railroad fuel. Pre-1981 data were reported by the EIA from Bureau of Labor Statistics reports. Beginning in 1983, the EIA administered a series of surveys to collect data on petroleum prices, market distribution, supply, and demand. The EIA-782 series encompasses three surveys: 1) Form EIA-782A, Refiners'/Gas Plant Operators' Monthly Petroleum Product Sales Report; 2) Form EIA-782B, Resellers'/Retailers' Monthly Petroleum Product Sales Report; and 3) Form EIA-782C, Monthly Report of Prime Supplier Sales of Petroleum Products Sold for Local Consumption.
EIA developed a method for comparing data from the new surveys with older information gathered by various methods. As a result, a number of adjustment factors were developed and used to "backcast" price estimates. Readers who require a more detailed description of this methodology should refer to EIA's petroleum data publications web page (www.eia.doe.gov/oil gas/petroleum/pet frame.html) and the explanatory notes section.
Changes in sample elements or collection methods may affect data continuity. Two regulatory changes affected data collection in October 1993.The Clean Air Act Amendments of 1990 required that oxygenated gasoline be sold in the winter months in ozone nonattainment areas. Thus, the EIA-782 forms were modified to collect information on fuels divided among conventional, oxygenated, and reformulated categories. Second, requirements for the production and selling of low-sulfur diesel were required and necessitated the separation of diesel fuel into high- and low-sulfur categories. Moreover, surveys prior to October 1993 did not include propane. The EIA followed several different sampling designs during two periods in the 1980s and thus, there may be some price estimate discontinuity for periods between December 1983 and January 1984 as well as between August and September of 1988.
The 782 series occurs on a monthly schedule via mail. The 782A and 782C surveys reflect a census of about 115 and 190 firms, respectively. The 782B samples about 2,000 firms. The EIA first stratifies by sales volume for the form 782B survey to ensure that dealers with 5 percent or more of the market are captured with certainty. The remaining elements of the frame were assigned a probability of selection to form a 2,200 firm survey. These "noncertainty" companies were poststratified by geographic area and type of sales category.
EIA has studied its sampling effects on reliability and determined that the sample size of 2,000 should yield a less than 1-percent price coefficient of variation in its estimates. Errors can arise because of nonresponse, but an EIA official indicated that the response rates for the 1997-1999 782A, B, and C surveys averaged 95 percent, 86 percent, and 96 percent, respectively. Because survey data invariably contain incomplete data (because of reporting errors or nonresponse), EIA estimates or "imputes" missing data. Readers requiring imputation algorithms should refer to the 782 series explanatory notes referred to above.
TABLE 3-9. Price Trend of Gasoline v. Other Consumer Goods and Services
Data in this table were reproduced from the American Petroleum Institute's (API) Basic Petroleum Data Book. API noted that data reported prior to 1981 was obtained from Platt's Oil Price Handbook and Oilmanac. Platt's is part of Standard and Poor's, and an independent third party organization that tracks the petroleum industry. Platt's reported the retail price of gasoline based on telephone interviews with gas stations in 55 cities. More detailed historical information on their data collection methods could not be ascertained and the data's reliability is uncertain. API reported the Bureau of Labor Statistics (BLS) as its data source for 1981 to 2001 retail gasoline prices. The remainder of this section discusses the BLS Consumer Price Index (CPI) data collection and estimation methods used to derive the average retail price of gasoline.
BLS uses the CPI as a measure of average price changes paid by urban consumers for a fixed basket of goods and services. BLS estimates the CPI with a survey-based approach. Survey results define a categorization of goods and services, a representative sample of items to track, and weights according to the consumption of an average consumer during a base period.
BLS relies on two sampling frames for their CPI estimates. One represents the universe of retail outlets from which households may purchase defined groups of commodities and services including gasoline. A second represents households across urban areas. Moreover, the household frame is based on an "urban-consumer" population and consists of households in Metropolitan Statistical Areas (MSA's) and in urban places with more than 2,500 inhabitants. This "all urban" CPI (CPI-U) provides the estimates for retail gasoline prices shown in table 3-9.Thus, this frame does not represent non-urban consumers.
For the retail outlet sampling frame, BLS relies on the Point-of-Purchase Survey (CPOPS) conducted by the Census Bureau in 94 Primary Sampling Units (PSUs) identified by BLS. PSUs are based on urban counties, groups of contiguous urban counties, or MSAs. For the household sample, a noncompact clustering procedure was employed which dispersed households evenly within a Census enumeration district (ED). More detailed sampling design information can be found in BLS's Handbook of Methods at http://stats.bls.gov/opub/hom/homhome.htm.
Prices for the goods and services used to calculate the CPI are collected in 91 PSUs located in 85 urban areas throughout the country. The sample size for the CPOPS totals about 21,000 retail and service establishments-supermarkets, department stores, gasoline stations, hospitals, etc. Food, fuels, and a few other items are priced monthly in all 85 locations. BLS field representatives collect all price information through visits or telephone calls in the household surveys. Price changes are computed based on a sample of outlets selected from locations identified by consumers. Specific sample items are then selected from each sample outlet to ensure that the market basket is representative of where households shop.
BLS routinely updates its price estimates for specific items among the collection of goods and services, for example, a new car model year. BLS employs three techniques to produce new price estimates. First, an item that is directly comparable to the previous discontinued good will be used to provide a price estimate. However, a substitute item may be inappropriate when goods change slightly in their characteristics. BLS relies on Hedonic regression modeling as a second "quality adjustment" for price estimates. This statistical technique can model the importance of various quality characteristics that add value to a particular good (the fiber content and construction of apparel products for instance). A researcher can estimate a Hedonic regression model that identifies the factors most important is determining the price of a good, and BLS field representatives will note these in their data collection. Imputation is a third quality adjustment used for "noncomparable" substitutions where BLS estimates the price change from previous averages. Detailed algorithms can be found in chapter 17 of the BLS Handbook of Methods at http://stats.bls.gov/opub/hom/homhome.htm.
Effective January 1999, BLS began using a new formula for calculating the basic components of the Consumer Price Index for all Urban Consumers (CPI-U) and the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). The new formula, the geometric mean estimator, is used in index categories that comprise approximately 61 percent of total consumer spending represented by the CPI-U. Based on BLS research, it is expected that use of the new formula will reduce the annual rate of increase in the CPI by approximately 0.2 percentage point per year. Additional information on this change was published in the April 1998 CPI Detailed Report and is available on the Internet at http://stats.bls.gov/cpihome.htm.
One of the CPI's limitations is that it represents price movements for urban residents and may not correctly represent nonurban consumption patterns. The CPI may also contain sampling error because it is estimated from a sample of consumer purchases. Nonsampling error may occur if respondents provide BLS field representatives with inaccurate or incomplete information. Another potential source of error identified by BLS may occur because of a time lag between the Point-of-Purchase Survey and the initiation of price collection for commodities and services at resampled outlets. Because of the time lag, the products offered by the outlet at the time pricing is initiated may not coincide with the set from which the CPOPS respondents were purchasing.
The CPI is also subject to response error when data are not collected because of non-response. BLS established a nonresponse auditing program in 1986.It reported that response rates in 1990 for transportation commodities and services were above 90 percent.
Four categories of bias were identified in the BLS report, Measurement Issues in the Consumer Price Index, published in 1997. First, because of the fixed-weight nature of the index, the CPI creates substitution bias by placing too much weight on items measured in previous surveys from which consumers may have shifted away. Second, the study found that the index did not account for consumers switching to discount stores. Third, a quality change bias was also identified when the differences between goods priced in two different periods cannot be accurately measured nor deduced from the accompanying price difference between the goods. Finally, the report noted that the CPI also had a new product bias because the index inadequately reflected consumer value of products introduced into the market. The commission concluded that the CPI overstated the true cost-of-living change by 1.1 percentage points per year.
TABLE 3-10. Producer Price Indices for Transportation Services
TABLE 3-11. Producer Price Indices for Transportation Equipment
Data shown in these tables are drawn from annual issues of The Supplement to Producer Price Indexes published by the Bureau of Labor Statistics (BLS) in the U.S. Department of Labor. These indexes represent a measure of outputs in all goods-producing American industries as well as partial coverage of service industries including transportation. BLS defines a price as the net revenue accrued to a specified production establishment from a specified kind of buyer for a specific product shipped under specific transaction terms on a specified day of the month. BLS collects this data series through surveys of a sample of establishments that report their prices from economic transactions.
A BLS field economist visits an establishment or cluster of establishments selected for price sampling. The economist uses a disaggregation procedure to select a sample of transactions from all the establishment's revenue-producing activities. This disaggregation procedure assigns a probability of selection to each shipping or receipt category proportionate to its value within a reporting unit. In most cases, the final price index produced by the BLS requires that 1) there are at least three different respondents to a survey, 2) at least two reporting units provide price information in a given month, and 3) no single respondent accounts for 50 percent or more of the weight for a given item.
BLS regional offices review field data for consistency and completeness. The national office then conducts a final review and a survey is then tailored specifically to establishments or clusters of establishments. BLS refers to these as repricing schedules and sends them to reporting establishments on a regular basis. Most prices refer to a reporting schedule on a particular day of the month, usually, the first Tuesday or the 13th of a month.
BLS collects prices for over 100,000 items. It utilizes several different weighting schemes for the numerous indexes produced because some products will have a greater effect on the movement of groupings of individual products. BLS utilizes the net output of shipment values as weights for the 4-digit SIC industries. Net output values include only shipments from establishments in one industry to other industry establishments and, thus, differ from gross shipment values. The latter would include shipments among establishments in the same industry, even if those establishments are separate firms. BLS also makes seasonal adjustments if statistical tests and economic rationale justify them, and computes data when a participating company does not deliver a price report. BLS bases the missing price estimation on the average of price changes for similar products reported by other establishments.
As in all surveys, the accuracy of producer price indexes depends on the quality of information voluntarily provided by participating establishments. One of the accuracy concerns of BLS revolves around the preferred use of realistic transaction prices (including discounts, premiums, rebates, allowances, etc.) rather than list or book prices. Before BLS fully changed its data collection method in 1986, a survey indicated that about 20 percent of traditional commodity indexes were based on list prices. The newer and more systematic methodology decreased the use of list prices. BLS documentation (available at http://stats.bls.gov/opub/hom) provided no more details on sampling error, response rates, or the availability of generalized variance parameters or techniques for estimating them.
TABLE 3-12. Personal Expenditures by Category
TABLE 3-13. Personal Consumption Expenditures on Transportation by Subcategory
Data used in these tables are from the Bureau of Labor Statistics, Annual Report of Consumer Expenditure Survey. The Consumer Expenditure Survey (CEX) collects information from U.S. households and families on their buying habits (expenditures), income, and consumer characteristics. The strength of the survey is that it allows data users to relate the expenditures and income of consumers to the characteristics of those consumers. BLS uses 11 standard characteristics to classify consumers, including income, before-tax income class, age, size of the consumer unit, composition of the consumer unit, number of earners, housing tenure, race, type of area (urban or rural), region, and occupation.
The CEX is a national probability sample of households. The sampling frame (i.e., the list from which housing units are chosen) for this survey is generated from the 1990 census 100-percent detail file, which is augmented by a sample drawn from new construction permits. Coverage improvement techniques are also utilized to eliminate recognized deficiencies in the census.
The current survey consists of two separate surveys (Interview and Diary), each utilizing a different data collection technique and sample. Data is collected for each survey from approximately 5,000 households. In the Interview survey, each consumer unit (CU) in the sample is interviewed every three months over five calendar quarters. The interviewer uses a structured questionnaire to collect both the demographic and expenditure data in the Interview survey. The interviewer collects the demographic data in the Diary survey whereas the respondent enters the expenditure data on the diary form. Both surveys accept proxy responses from any eligible household member who is at least 16 years old if an adult is not available after a few attempts to contact that person. The respondent family completes the Diary (or recordkeeping) survey at home for two consecutive one-week periods.
A reinterview program for the CEX provides quality control. The program provides a means of evaluating individual interviewer performance to determine how well the procedures are being carried out in the field. A member of the supervisory staff conducts the reinterview. Subsamples of approximately 6 percent of households in the Interview survey and 17 percent in the Diary survey are reinterviewed on an ongoing basis. A new diary form with more categories and expanded use of cues for respondents was introduced in 1991, based on results from earlier field and laboratory studies.
Missing or invalid data on demographic or work experience are imputed. No imputation is done for missing data on expenditures or income. Selected portions of the Diary data are also adjusted by automated imputation and allocation routines when respondents report insufficient detail to meet publication requirements. These procedures are performed annually on the data. The imputation routines assign qualifying information to data items when there is clear evidence of invalid nonresponse.
The statistical estimation of the population quantities of interest, such as the average expenditure on a particular item by a CU or the total number of CUs in a particular demographic group, is conducted via a weighting scheme. Each CU included in the survey is assigned a weight that is interpreted as representing the number of similar families in the universe of interest, the U.S. civilian noninstitutional population. Readers should refer to http://stats.bls.gov/opub/hom/homch16 c.htm for the detailed weighting method.
Beginning with 1997 data, BLS introduced a new calibration method to compute weights in the Consumer Expenditure Survey. The weights are calculated using a model-assisted, design-based regression estimator.
The Consumer Expenditures Survey is a sample survey and hence is subject to two types of errors, nonsampling and sampling. Nonsampling errors can be attributed to many sources, such as differences in the interpretation of questions, inability or unwillingness of the respondent to provide correct information, mistakes in recording or coding the data obtained, and other errors of collection, response, processing, coverage, and estimation for missing data. The full extent of nonsampling error is unknown. Sampling errors occur because the survey data are collected from a sample and not from the entire population. Tables with coefficients of variation and other reliability statistics are available on request from the national office. However, because the statistics are shown at the detailed item level, the tables are extensive.
TABLE 3-14. Cost of Owning and Operating an Automobile
Your Driving Costs produced by the American Automobile Association (AAA) provided the data for this table. Prior to 1985, the cost figures are for a mid-sized, current model, American car equipped with a variety of standard and optional accessories. After 1985, the cost figures are for a composite of three current model American cars:
- A 1999 Chevrolet Cavalier LS,
- A 1999 Ford Taurus SEL Deluxe, and
- A 1999 Mercury Grand Marquis LS.
Thus, the estimates are not reliable estimates for all cars.
Fuel costs were based on an average price of $1.195 per gallon of regular unleaded gasoline, weighted 20 percent full-serve and 80 percent self-serve. Insurance figures were based on personal use of vehicles driven less than 10 miles to or from work, with no young drivers. Normal depreciation costs were based on the vehicle's trade-in value at the end of four years or at 60,000 miles. American Automobile Association (AAA) analysis covers vehicles equipped with standard and optional accessories, including automatic transmission, air conditioning, power steering, power disc brakes, AM/FM stereo, driver-and passenger side air bag, anti-lock brakes, cruise control, tilt steering wheel, tinted glass, emission equipment and rear window defogger.
TABLE 3-15a & 3-15b. Average Passenger Fare (Current and chained 1996 dollars)
TABLE 3-18. Total Operating Revenues
The U.S. Department of Transportation, Bureau of Transportation Statistics (BTS), Office of Airline Information, reports passenger fares and operating revenues in its publication Air Carrier Financial Statistics. These numbers are based on 100 percent reporting by large certificated air carriers. Minor errors from nonreporting may occur but amount to less than one percent of all passenger or freight activity. The figures do not include data for all airlines; such as most scheduled commuter airlines and all nonscheduled commuter airlines.
Class I Bus
Class I passenger motor carriers are required to report financial and operating information to BTS using form MP-1.(Prior to 1996, Class I carriers were required to report to the Interstate Commerce Commission.) Class I passenger motor carriers are defined as those having annual gross operating revenues, as adjusted for inflation, of $5,000,000 or more. This table does not include Class I carriers whose data had not been received at the time of publication. Thus, these data do not represent total Class I passenger motor carrier activity.
The American Public Transit Association (APTA) reports these figures, which are based on the annual National Transit Database (NTD) report published by the USDOT, Federal Transit Administration (FTA). The legislative requirement for the NTD is found in Title 49 U.S.C. 5335(a). Transit agencies receiving funds through the Urbanized Area Formula Program are generally required to report financial and operating data, including capital expenditures, revenues and expenses. These data are generally considered accurate because the FTA reviews and validates information submitted by individual transit agencies. Reliability may vary because some transit agencies cannot obtain accurate information or misinterpret certain data definitions. APTA conservatively adjusts FTA data to include transit operators that do not report to the database (private and very small operators and rural operators).
Data are from Railroad Facts published annually by the Association of American Railroads (AAR). AAR figures are based on 100-percent reporting by all nine Class I railroads to the Surface Transportation Board (STB) via Schedule 700 of the R1 Annual Report. STB defines Class I railroads as having operating revenues at or above a threshold indexed to a base of $250 million in 1991 and adjusted annually in concert with changes in the "Railroad Freight Rate Index" published by the Bureau of Labor Statistics. In 2000, the adjusted threshold for Class I railroads was $ 261.9 million. Declassification from Class I status occurs when a railroad falls below the applicable threshold for three consecutive years. Although Class I railroads comprise only 1 percent of the number of railroads in the country, they account for over 71 percent of the industry's mileage operated, 91 percent of total freight rail revenue, and 88 percent of railroad employment.
Average passenger fare data are based on 100 percent of issued tickets, and thus should be accurate. Created as a publicly-owned for-profit corporation, Amtrak collects its own financial data and reports this information in its annual report. Auditing should ensure the accuracy of the operating revenue figures.
Trucking and Courier Services (except air)
The Census Bureau's Transportation Annual Survey (formerly known as the Motor Freight Transportation and Warehousing Survey) is the source of this information. The sample survey represents all employer firms with one or more establishments engaged primarily in providing commercial motor freight transportation or public warehousing services. It excludes motor carriers that operate as auxiliary establishments to nontransportation companies, as well as independent owner-operators with no paid employees. Thus, the data do not represent the total trucking industry.
In 1999, Transportation Annual Survey was merged with the Census Bureau's Service Annual Survey (SAS) and is the source of data for years 1998 and later. SAS provides estimates of operating revenue of taxable firms and revenue and expenses of firms exempt from federal income taxes for selected service industries. Unlike the Transportation Annual Survey, the SAS is based on the North American Industry Classification System (NAICS).
As with all sample surveys, two types of errors are possible: sampling and nonsampling. Nonsampling errors may include response errors and mistakes in coding or keying data. For additional information about the survey and data reliability, the reader is referred to the Census Bureau website at www.census.gov.
Eno Transportation Foundation, Inc. is the source of these data. Eno estimates these figures by multiplying ton-mile figures by estimated revenue per ton-mile. The U.S. Army Corps of Engineers reports the ton-mile figures in its publication Waterborne Commerce of the United States, and the revenue per ton-miles figures are estimated by Eno.
Eno Transportation Foundation, Inc., publishes these data, which are based on Federal Energy Regulatory Commission (FERC) data and reported by the Oil Pipeline Research Institute for years 1977 to the present. FERC data originates from required quarterly reports filed by pipeline companies. Prior to 1977, the data are based on the former Interstate Commerce Commission data for regulated pipelines, and estimated to be 16 percent of the total of nonregulated pipelines.
These statistics originate from Gas Facts, published annually by the American Gas Association (AGA).AGA data are based on gas utilities participation and reporting to the Uniform Statistical Report and estimates for those companies not reporting based on recent historical experience. Varying percentages of nonreporters from year to year introduce minor reliability problems for time-series comparisons.
TABLE 3-19. Employment in For-Hire Transportation and Selected Transportation-Related Industries
Employment data by industry are from the National Employment, Hours, and Earnings estimates published by the Bureau of Labor Statistics (BLS), U.S. Department of Labor. These estimates originate from the Current Employment Statistics (CES) survey program. The CES is a monthly survey conducted by state employment security agencies in cooperation with the BLS. The survey provides employment, hours, and earnings estimates based on payroll records of nonfarm business establishments, including government.
BLS uses a stratified sample based on a sector's employment size, or the degree of variability among its establishments, or both. This ensures that BLS captures a more representative survey from employers with large payrolls. Thus, large establishments are certain of selection while smaller ones have less of chance.
Data are collected electronically from about two-thirds of the respondents and by mail or fax from the remainder. The primary type of electronic reporting is touch-tone phone self-response; others are computer-assisted phone interviews and phone voice recognition technology. Increasingly, data are collected through electronic data interchange from a small but growing number of companies that have a large number of establishments across the country. Mail respondents submit Form 790 to the BLS each month. It is then edited and returned to the respondent for use again the following month. All firms with 250 employees or more are asked to participate in the survey, as well as a sample of smaller firms.
Employment estimates are made at what is termed the basic estimating cell level and aggregated upward to broader levels of industry detail by simple addition. Basic cells are defined by industry (usually at the 3- or 4-digit SIC level) and are stratified within industry by geographic region and/or size class in the majority of cases. Within the wholesale trade, retail trade, and services divisions, most industries are stratified into three to five size classes (beginning in 1984).
Most national employment estimates are multiplied by bias adjustment factors to produce the monthly published estimates. Bias adjustment factors are used primarily to compensate for the inability to capture the entry of new firms on a timely basis. New firms contribute a substantial amount to employment growth each year, but there is a lag between the creation of a firm and its inclusion on the sample frame (i.e., the Unemployment Insurance universe file). It is, therefore, necessary to use modeling techniques to capture this segment of the population. BLS also performs seasonal adjustments for certain SIC industries.
BLS does not publish data reliability information along with estimates. Instead, it provides estimation formula and the necessary parameters so that users can estimate standard errors. For additional information, see the "Explanatory Notes and Estimates of Error" in the BLS monthly publication Employment and Earnings.
The CES survey, which began over 50 years ago, predates the introduction of probability sampling as the internationally recognized standard for sample surveys. Instead, a quota sample has been used since its inception. Quota samples are at risk for potentially significant biases, and recently completed BLS research suggests that, despite the large CES sample size, employment estimates based on that sample at times diverge substantially from those that a more representative sample would have been expected to produce. This leads to an over-reliance on bias adjustment in the estimation procedure. Because bias adjustment is primarily based on past experience, it is limited in its ability to accurately reflect changing economic conditions on a timely basis.
The Office of the Secretary provides employment figures for the U.S. Department of Transportation. State and local highway department employment figures are from the State and Local Government Employment and Payroll Estimates, published by the U.S. Department of Commerce, Bureau of the Census. The data are for the 50 states and the District of Columbia. Employment and payroll data pertain to the month of October. At present, data are collected for one pay period that includes October 12 (regardless of the period's length) through the Public Employment Survey (PES).
Employment refers to all persons gainfully employed by and performing services for a government. Employees include all persons paid for personal services performed from all sources of funds, including persons paid from federally funded programs, paid elected officials, persons in a paid leave status, and persons paid on a per meeting, annual, semiannual, or quarterly basis. Excluded from employment statistics are unpaid officials, pensioners, persons whose work is performed on a fee basis, and contractors and their employees.
The Census Bureau derives full-time equivalent (FTE) employment by summing the number of full-time employees reported and converting the number of hours worked by part-time employees to a full-time equivalent amount. Up until 1985 data, the method used to calculate FTEs was based solely on payroll data. Effective with 1986 data, the annual employment survey started collecting data on the number of hours worked by part-time employees in order to provide a more accurate representation of full-time equivalent employment. No October 1985 FTE employment data are available.
Beginning in 1999, the Public Employment Survey (PES) was conducted using a separate sample of approximately 11,000 government units to improve data accuracy and survey efficiency. Government units meeting any of the following criteria are included in the survey: 1) counties with populations greater than 100,000; 2) cities with populations greater than 75,000; 3) townships in New England and Mid-Atlantic with populations greater than 50,000; 4) special districts with FTEs greater than 1000; 5) independent school districts with enrollment greater than 10,000; and 6) all dependent and independent schools providing college level education. In 1999, government units were sampled to obtain a relative standard error of 3 percent or less for FTE and total payroll for each of the states by type of government groups.
Prior to 1993, the PES used a joint sample of approximately 24,000 units for both employment and finance. From 1993 to 1998, the sample size was reduced to around 14,000 units. The standard error for the PES prior to 1999 was designed to be around 3 percent for major state- or county-level estimates of finance variables (state-level for 1993-1998 and county-level prior to 1993).Employment estimates are made using regression, except when the number of noncertainty cases contributing to the estimate is less than 20, where a simple unbiased estimate is used.
TABLE 3-20. Employment in Transportation Occupations
TABLE 3-22. Median Weekly Earnings of Full-Time Wage and Salary Workers in Transportation by Detailed Occupation
Employment by detailed transportation occupation data are from the Occupational Employment Statistics (OES) survey, collected by the Bureau of Labor Statistics (BLS). The OES is a periodic mail survey of nonfarm establishments that collects occupational employment data on workers by industry. The OES program surveys approximately 725,000 establishments in 400 detailed industries. The average response rate for the last three years, according to a BLS official, averaged about 70 percent.
The sample is selected primarily from the list of business establishments reporting to the state unemployment insurance program. The OES sample initially stratifies the universe of establishments by three-digit industry code and size- class code. Establishments employing 250 employees or more are sampled with certainty. Establishments employing fewer than 250 employees but more than 4 employees are sampled with probability proportional to the size class employment within each three-digit industry. Establishments employing four or fewer employees (i.e., size class 1 establishments) are not sampled. Instead, the employment for these establishments are accounted for by assigning a larger sampling weight to establishments employing five to nine employees (i.e., size-class 2 establishments).Within each three-digit industry/size- class cell, establishments are systematically selected into the sample through a single random start.
Employers are the source of occupational data. Within establishments, the main source of occupational data reported by respondents is personnel records. Data are collected from respondents primarily by mail. Occasionally, visits are made to large employers and to other respondents who indicate particular difficulty in completing the questionnaires. Ordinarily, two mailings follow the initial mailing. After the third mailing, a subsample of the remaining nonrespondents is drawn and contacted by telephone. The OES survey follows a 3-year cycle. Three surveys are conducted alternately for manufacturing, nonmanufacturing, and the balance of nonmanufacturing industries.
During the sample selection process, each sampled establishment is assigned a sampling weight that is equal to the reciprocal of its probability of selection. For example, if an establishment on the sampling frame had a 1 in 10 chance of being selected into the sample, then its sampling weight is 10. For establishments that did not respond to the survey, a nonresponse adjustment factor is calculated and applied against the sampling weights of the responding establishments within each state/3-digit industry/size-class cell. Multiplying these adjustment factors by sampling weights increases the weight of the responding establishments so they can account for the missing employment data of the nonresponding establishments.
The OES survey uses a subsample replication technique to estimate variances in occupational employment at the 3-digit industry/size-class level. For additional information on occupational employment estimates and measurements of sampling error associated with the estimates, the reader is referred to http://stats.bls.gov/oes/home.htm.
TABLE 3-21. Average Wage and Salary Accruals per Full-Time Equivalent Employee by Transportation Industry
TABLE 3-23. Total Wage and Salary Accruals by Transportation Industry
The Survey of Current Business (tables 6.3c and 6.6c) published by the U.S. Department of Commerce, Bureau of Economic Analysis, is the source of transportation wage and salary data. These estimates are based on BLS tabulations of employee wages that are covered by State unemployment insurance. As a component of the income side of National Income and Product Account, wages and salaries comprise part of the GDP calculation. These data reflect the monetary remuneration of employees in terms of wage accruals less disbursements. It is defined as the difference between wages and salaries on a "when-earned" basis, or accrued, and wages and salaries on a "when-paid," or disbursed basis. This computation was instituted in 1992 because a significant portion of bonus payments were missed in previous calculations. Readers should also refer to the earlier discussion of GDP methods and reliability for more detail.
TABLE 3-24. Labor Productivity Indices for Selected Transportation Industries
The Bureau of Labor Statistic's (BLS) Industry Productivity Measures is the source of transportation labor productivity data. BLS develops industry productivity measures based on various data sources.
For rail, BLS uses freight ton-mile and passenger miles that are collected by the Surface Transportation Board (STB), the Association of American Railroads (AAR), and Amtrak. BLS also aggregates four different air transportation outputs to form a single productivity index: domestic passenger-miles, domestic freight ton-miles, international passenger-miles, and international freight ton-miles. Air transportation data come from Air Carrier Traffic Statistics and Air Carrier Financial Statistics, published by the U.S. Department of Transportation, Bureau of Transportation Statistics. For petroleum pipeline, BLS relies on data from the Association of Oil Pipelines and derived an output index based on trunkline barrel-miles. A barrel-mile is one barrel of petroleum moved through one mile of pipeline.
BLS generally calculates labor productivity by dividing an index of output (in this case, ton-miles) by an index of hours. Output is derived with a weight adjusted Tornqvist formula that produces an output ratio for one year. BLS then combines these in a series that produces a chained output index. The hour indexes are developed from data in BLS's Current Employment Statistics (CES; see discussion above for table 3-12) and are the results of dividing the annual aggregate hours for each year by a base-period figure. Readers who need more detail, such as mathematical specifications or equations, should refer to Kunze and Jablonski (Kunze and Jablonski 1998) or call the Office of Productivity and Technology at BLS.
BLS provides no measures of reliability. However, BLS makes an assumption that transportation outputs should be measured using the production of passenger-miles or freight-miles. Another school of thought might assume that many transportation firms or facilities are actually providing capacity rather than actual use. Thus, an argument can be made that productivity should be based on capacity rather than use. In fact, this is how BEA measures transportation output. To evaluate the BLS assumption, one study compared the two approaches by examining the different growth rates produced by BLS and BEA and found that in 25 of 35 service industries, the differences are within one percentage point. For transportation, differences in growth rates across BLS and BEA estimates were two percentage points or less (Kunze and Jablonski 1998).
Beginning with 1997 data, the indices for bus and petroleum pipelines did not meet BLS publication standards and are considered less reliable than those for other modes. These industries had between 14,000 and 15,000 employees, far below the 50,000-employee threshold established for transportation industries by BLS. However, they both met a basic test of variability of the annual percent changes in the output per hour measure.
GOVERNMENT REVENUES AND EXPENDITURES
TABLE 3-25a &3-25b. Federal, State, and Local Government Transportation-Related Revenues and Expenditures, Fiscal Year (Current and constant 1996 dollars)
TABLE 3-26a & 3-26b. Federal Transportation-Related Revenues, Fiscal Years (Current dollars and constant 1996 dollars)
TABLE 3-27a & 3-27b. Federal Transportation-Related Expenditures by Mode, Fiscal Year (Current and constant 1996 dollars)
TABLE 3-28. Cash Balances of the Transportation-Related Federal Trust Funds, Fiscal Year
The main sources for federal-level data are the Budget of the United States Government and the Appendix to the Budget. These data are the actual figures as reported for the various transportation-related programs in the appendices of each year's budget document.1 The figures are consistent from year to year and follow the definitional structure required by the Office of Management and Budget (OMB).
Primary sources for state and local transportation-related revenues and expenditures data are censuses and surveys collected by the U.S. Census Bureau. All units of government are included in the Census of Governments, which is taken at five-year intervals for years ending in 2 or 7, and these data are full counts, which are not subject to sampling error.
State and local government data for noncensus years are obtained by annual surveys, which are subject to sampling error. For U.S. totals of local government revenues and expenditures in this report, sampling variability is less than 3 percent.
Federal figures in this report correspond to the federal fiscal year, which begins on October 1, while state and local data are for fiscal years that generally start in July. While this may create a small error in totals for any given year, the data are suitable for illustrating trends in public transportation finance. Programs terminated before 1985 are excluded from the tables. The totals for transportation revenues and expenditures in this report are the sum of the Census Bureau's state and local numbers plus the total of the federal numbers.
The source of the chained dollar deflators is The National Income and Product Account Tables, Bureau of Economic Analysis, table 7.1, "Quantity and Price Indexes for Gross Domestic Product." All inflation-adjusted data are for the base year 1996, instead of 1992 as in previous editions of National Transportation Statistics. Note that deflators used for the federal data differ from those used for state and local data. Thus, if expenditures are totaled across different levels of government in chained dollars before and after federal grant transfers, the totals will not match.
Transportation revenue estimates include transportation-related user charges, taxes, or fees earmarked for transportation-related expenditures. Estimates include transit fares from systems owned and operated by state and local governments, including those systems operated under contract by a private firm under day-to-day financial oversight by government.
Federal transportation revenues generally consist of trust-fund collections from user charges, such as fuel taxes, vehicle taxes, registration and licensing fees, and air passenger ticket taxes. Damage payments made by private parties are deposited in the funds to reimburse the government for related fund expenditures.
The five transportation-related Federal trust funds are established by law:
- Highway Trust Fund (HTF), which includes both highway and transit accounts;
- Airport and Airway Trust Fund (AATF);
- Harbor Maintenance Trust Fund (HMTF);
- Inland Waterways Trust Fund (IWATF); and
- Oil Spill Liability Trust Fund (OSLTF).
The Highway Trust Fund (HTF) was established by the Highway Revenue Act of 1956. Highway Trust Fund revenues are derived from various excise taxes on highways users (e.g., motor fuel, motor vehicles, tires, and parts and accessories for trucks and buses) and interest earned on balances. The Transportation Equity Act for the 21st Century (TEA-21), which was enacted in June 1998, made important changes to the Federal Highway Trust Fund legislations (FHWA, 1999):
- extension of deposit provisions of almost all highway user taxes through September 30, 2005;
- after September 30, 1998, the HTF can no longer earn interest on balances, and the balance in the highway account would be transferred to the general fund;
- TEA-21 keys Federal-aid highway funds to receipts of the Highway Account of the HTF; and
- the Transit Account share of fuel tax rose from 2 cents per gallon to 2.86 cents per gallon.
The Excise tax on gasoline is the most important source of the HTF revenues and has changed five times since 1985. It increased from 9 cents per gallon in 1985 to 9.1 cents per gallon on January 1, 1987; to 14.1 cents per gallon on December 1, 1990; to 18.4 cents per gallon on October 1, 1993; to 18.3 cents per gallon on January 1, 1996; and to 18.4 cents per gallon on October 1, 1997 (FHWA, 1999).
Money paid into the fund is earmarked primarily for the Federal-aid Highway program, which is apportioned to states for planning, constructing, and improving the nation's highway system, roads, and bridges. Effective April 1983, the Highway Revenue Act of 1982 created the Mass Transit Account within the HTF.
Some portion of the HTF is dedicated to budget deficit reduction and the Leaking Underground Storage Tank Trust Fund (LUSTTF). For example, 4.3 cents per gallon of the federal excise tax on gasoline has been assigned to the general fund since January 1, 1996, and 0.1 cents per gallon was apportioned to the LUSTTF since October 1, 1997 (FHWA, 1999). These funds are not considered as transportation-related in this report.
State and local highway revenues include state and local taxes on motor fuels, motor vehicle licenses, and motor vehicle operator licenses, along with state and local charges for regular toll highways and local parking charges. Regular highway charges (revenues) include reimbursements for street construction and repairs, fees for curb cuts and special traffic signs, and maintenance assessments for street lighting, snow removal, and other highway or street services unrelated to toll facilities. Local governments use special assessments and property taxes that may be commingled with other local revenue in a general fund to finance local road and street programs. Consistent with federal revenues, state and local transportation revenues in this report do not include general funds that may be allocated to transportation.
As mentioned above, the Highway Revenue Act of 1982 created the Mass Transit Account within the HTF. Effective April 1983, the act provided one cent per gallon of the federal excise tax on gasoline sales to be set-aside for the Mass Transit Account to help finance transit capital projects. The rate was increased to 1.5 cents per gallon on December 1, 1990; to 2 cents per gallon on January 1, 1996; and to 2.86 cents per gallon on October 1, 1997 (FHWA, 1999). Although highway users pay these taxes, the funds are treated as federal transit revenues.
State and local transit revenues include revenues from operations of public mass transportation systems (rapid transit, subway, bus, railway, and commuter rail services), such as fares, charter fees, advertising income, and other operations revenues. They exclude subsidies from other governments to support either operations or capital projects.
The Tax Equity and Fiscal Responsibility Act of 1982, as amended by Omnibus Budget Reconciliation Acts of 1990 and 1993, the Small Business Job Protection Act of 1996, and the Taxpayers Relief Act of 1997, provides for the transfer of receipts received in the U.S. Treasury from the passenger ticket tax and certain other taxes paid by airport and airway users to the Airport and Airways Trust Fund (AATF). Effective October 1, 1997, the Taxpayers Relief Act of 1997 extends aviation excise taxes for 10 years and includes the following major provisions (FAA, 1999):
- retains existing freight weigh bill, general aviation fuel and gas taxes, and a 6-dollar departure tax on domestic flights to and from Alaska and Hawaii;
- converts the 10 percent ad valorem tax on domestic passenger tickets to a combination of ad valorem and flight segment tax over three years beginning October 1, 1997;
- imposes a new 7.5 percent tax on payments to airlines for frequent flyer and similar awards by banks and credit card companies, merchants, frequent flyer program partners-other airlines, hotels, or rental car companies and other businesses;
- increases the current 6-dollar international departure tax to 12 dollars per passenger and adds a 12-dollar international arrival tax;
- lowers tax rates on flights to certain rural airports to 7.5 percent without a flight segment component; and
- transfers revenues from the 4.3 cents-per-gallon aviation fuel taxes currently dedicated to reduce the national U.S. deficit from the general fund to the AATF.
Most of this trust fund is used to finance the Federal Aviation Administration's (FAA's) capital programs, namely, Facilities and Equipment; Research, Engineering, and Development; and Airport Improvement Program. Within certain limits set by Congress, some of the remaining money is used to cover FAA operation and maintenance expenses. The portion of the FAA's operation and Maintenance expenses not paid from the trust fund revenues are financed by U.S. Treasury general funds.
State and local revenues from air transportation are derived from airport charges. Beginning in 1992, local governments began collecting passenger facility charges and spending these revenues (both subject to FAA approval) to finance capital programs.
The collection of passenger facility charges was authorized by the Aviation Safety and Capacity Expansion Act of 1990.2
Waterway and Marine Revenues
Federal water revenues come from four primary sources: the Harbor Maintenance Trust Fund (HMTF), the Inland Waterways Trust Fund (IWATF), the Oil Spill Liability Trust Fund (OSLTF), and tolls and other charges collected by the Panama Canal Commission.
The Harbor Maintenance Trust Fund was established in accordance with the Harbor Maintenance Revenue Act of 1986. Revenues for this fund are derived from receipts of a 0.125 percent ad valorem user fee imposed on commercial users of specified U.S. ports, Saint Lawrence Seaway tolls. On March 31, 1998, per a U.S. Supreme Court ruling, the tax on exports was terminated (OMB, 2000). This fund is used to finance up to 100 percent of the U.S. Army Corps of Engineers' harbor operation and maintenance (O&M) costs, including O&M costs associated with Great Lakes navigational projects, and the fund fully finances the operation and maintenance of the Saint Lawrence Seaway Development Corp.
The Inland Waterways Trust Fund was established by the Inland Waterways Revenue Act of 1978 and amended by the Water Resources Development Act of 1986. The trust fund has been in effect since fiscal year 1981. The sources for the fund are taxes imposed on fuel for vessels engaged in commercial waterway transportation and investment interest. From this tax of 24.3 cents per gallon, 4.3 cents goes for deficit reduction, and a statutory maximum of 20 cents (raised to that level from the previous maximum of 19 cents at the beginning of 1995) goes to the Trust Fund. The funds are earmarked for financing one-half of the construction and rehabilitation costs of specified inland waterway projects.
The Oil Spill Liability Trust Fund was established by the Omnibus Budget Reconciliation Act of 1989. Revenues for this fund are raised through tax collection of 5 cents on each barrel of oil produced domestically or imported (OMB, 1999). The resources from this fund are used to finance oil pollution prevention and cleanup activities by various federal agencies. For the U.S. Coast Guard, the fund finances oil spill recovery and payment of claims. Beginning in 1997, the fund also finances the annual disbursement to the Prince William Sound Oil Spill Recovery Institute.
The Panama Canal Commission was established by the Panama Canal Act of 1979 to manage, operate, and maintain the Panama Canal under the Panama Canal Treaty of 1977. The treaty period ended on December 31, 1999, when the Republic of Panama assumed full responsibility for the canal. During the treaty period, the commission collected tolls and other revenues, which were deposited in the U.S. Treasury in an account known as the Panama Canal Revolving Fund. Money from this fund was used to finance canal operations and capital programs, which were reviewed annually by Congress. The revenues reported under this category for FY 2000 are for the first quarter (October 1999 - December 1999) of Panama Canal operations.
State and local water revenues are derived from canal tolls, rents from leases, concession rents, and other charges for use of commercial or industrial water transport and port terminal facilities and related services. Fees and rents related to water facilities provided for recreational purposes, such as marina and public docks, and toll ferries are not included.
There are no governmental transportation revenues for rail (Rail generates fuel taxes that are designated for deficit reduction and, thus, are not considered transportation revenues in these tables).
The Pipeline Safety Program is funded by user fees assessed on a per-mile basis. The assessments are made on each pipeline operator regulated by the Office of Pipeline Safety (OPS) of the Research and Special Programs Administration (RSPA) in the U.S. Department of Transportation. There are no state and local revenues for pipeline.
General Support Revenues
General support revenues come from the Emergency Preparedness Fund, which is generated from fees paid by registered shippers of hazardous materials. RSPA administers and distributes the revenues to states, territories, and tribes through the Hazardous Materials Emergency Preparedness (HMEP) grant program, which is authorized by Federal Hazardous Materials Transportation Law.
Expenditures, rather than obligations, are used in these tables because they represent the final, actual costs to the government, by year, for capital goods and operating services required by transportation programs. Obligations suggest government commitment to future transportation expenditures, but do not indicate when the funds will actually be disbursed or even if the amounts obligated will be spent.
It is important to recognize that in some accounts in the Budget of the United States Government, expenditures for a particular year understate total government disbursements. This is because certain offsetting collections of fees and assessments from the public are not treated as government revenues, but deducted from disbursements to determine expenditures. These collections are those mandated, by statute, to directly fund agency expenditures rather than be transferred to the U.S. Treasury. For this reason, expenditures do not necessarily indicate how much the federal government actually spends on transportation each year.
Federal Highway Administration (FHWA) expenditures include funds for Federal Aid Highways (financed from the HTF) and the Interstate Substitution and Railroad Crossing Demonstration (financed from the general fund). The National Highway Traffic Safety Administration (NHTSA) expenditures include: operations, research, and highway traffic safety grants. Federal highway expenditures also include road construction activities managed by the Department of the Interior's National Park Service, Bureau of Indian Affairs, Bureau of Reclamation, and Bureau of Land Management; the Department of Agriculture's Forest Service; the Department of Housing and Urban Development; and other federal agencies.
State and local governments' highway expenditures reported by the Census Bureau are generally slightly lower than those reported in FHWA's Highway Statistics because the FHWA includes some highway expenditure data, such as law enforcement activities and patrols, and policing of streets and highways not included in the Census data. Box 3-1 outlines the major differences in Census Bureau and FHWA calculation of state and local highway transportation financial statistics.
Federal expenditures include grants to states and local agencies for the construction, acquisition, and improvement of mass transportation facilities and equipment and for the payment of operating expenses. Several other items are also included: Federal Railroad Administration (FRA) commuter rail subsidies related to the transition of Conrail to the private sector; research and administrative expenses of the Federal Transit Administration (FTA); and Federal interest payment contribution to the Washington Metropolitan Area Transportation Authority (WMATA).
Federal expenditures reported here consist of all FAA expenditures, such as those associated with constructing, operating, and maintaining the national air traffic system; administration of the airport grant program; safety regulation; and research and development. NASA expenses related to air transportation are also included.
State and local expenditures for air include the operation and maintenance of airport facilities, as administered by local airport and port authorities quasigovernment agencies with responsibilities for promoting safe navigation and operations for air modes.
Waterway and Marine Expenditures
Federal expenditures comprise those parts of the U.S. Coast Guard's expenses that are transportation-related, such as aids to navigation, marine safety, and marine environmental protection. All expenses of the U.S. Maritime Administration are included, such as subsidies for construction and operation of vessels by U.S.-flag operators, research and development, and training of ship officers. Also included are those expenses of the U.S. Army Corps of Engineers for construction and operations and maintenance of channels, harbors, locks and dams; protection of navigation; the salaries and expenses of the Federal Maritime Commission; and the expenses of the Panama Canal Commission. Expenditures of the Panama Canal Commission for FY 2000 include outlays for the first quarter of operations, including severance pay and accumulated leave. FY 2001 expenses are for the settlement of remaining accident and contract claims against the Commission.
State and local governments incur water transportation expenditures by operating and maintaining water terminal facilities within ports and harbors.
Federal rail transportation expenditures include:
- expenses for rail safety enforcement;
- inspection and program administration;
- railroad research and development;
- financial assistance to states for planning, acquisition, rail facility construction, and track rehabilitation with respect to low volume freight lines;
- grants to Amtrak, including funds to upgrade the high-speed line between Boston, Massachusetts, and Washington, DC, owned by Amtrak (the Northeast Corridor Improvement Program); annual appropriations to cover operating losses; and funds to invest in new equipment and facilities;
- the purchase of redeemable preference shares for track rehabilitation and line acquisition; and
- loan guarantee defaults for railroad rehabilitation and improvement and Conrail labor protection.3
The local rail freight assistance program, a program of FRA grants to state governments, has had a 70:30 percent federal-state funding share since 1982.
The Office of Pipeline Safety (OPS) reimburses state agencies up to 50 percent of their costs to carry out state pipeline safety programs. Federal expenditures are for the enforcement programs, research and development, and grants for state pipeline safety programs.
General Support Expenditures
General fund expenditures include all of the expenses of the following agencies: Office of Inspector General, National Transportation Safety Board, all expenses of the Research and Special Programs Administration, (except pipeline expenditures) and the Office of the Secretary of Transportation (except for payments to Air Carriers and the Commission on Aircraft Safety).
Limitations of the Source Data Sets
The database covers civilian transportation-related activities of government agencies including those of the U.S. Army Corps of Engineers and U.S. Coast Guard.
As mention earlier, federal government data are compiled for the federal fiscal year, which begins on October 1, while state and local data are for fiscal years that generally start in July except for four states with other starting dates (Alabama and Michigan in October, New York in April, and Texas in September). While this may create a small error in totals for any given year, the data are suitable for illustrating trends in public transportation finance.
Readers should note that state and local governments data for census years are full counts and not subject to sampling errors, whereas the data for noncensus years are estimated from annual surveys of the Bureau of the Census, which are subject to sampling variability of less than three percent. The Census Bureau's database also does not include detailed modal information on interest earnings and bond issue proceeds on the revenue side nor bond retirement and interest payments on the expenditure side
Transportation-related revenues like local government property taxes on vehicles, equipment, and streets, and state income taxes to support rail and intercity bus services are not covered because they are not shown in the source materials used to compile the database. In addition, taxes collected from users of the transportation system that go into the general fund are not included. For example, rail generates fuel taxes that are designated for deficit reduction and hence are not considered as transportation revenues. The portion of the Highway Trust Fund (HTF) that goes to the general fund is not considered as transportation revenues.
It is important to recognize that in some accounts in the Budget of the United States Government, expenditures for a particular year understate total government disbursements. This is because certain offsetting collections of fees and assessments from the public are not treated as government revenues, but deducted from disbursements to determine expenditures. These collections are those mandated, by statute, to be applied directly to finance agency expenditures rather than being transferred to the Treasury.
In addition, the Census Bureau's highway expenditures data do not include highway law enforcement expenditures, which form a part of the state and local highway expenditures published in the Highway Statistics. To maintain consistency between the different modes regarding the types of expenditures included, these additional data from the Highway Statistics report have not been used.
Revisions and corrections to previously published data have been made in most cases. The base year for chained dollar estimates for current data sets is 1996, while the earlier version was presented in chained 1992 dollars. Moreover, the following adjustments have been incorporated.
Transportation-related revenues of the Aquatic Resources Fund have been added to water transportation revenues. In this case, only the excise tax charged on motor boat fuels for the Boat Safety Program is assumed to be transportation-related.
The preceding data series did not account for revenues of Pollution Fund, Off-Shore Oil Pollution Fund, and Deep Water Port Liability Fund prior to FY 1990. The current data sets includes revenues for these funds prior to FY 1990.
Not all expenditures for the U.S. Coast Guard (USCG), as reported by the Office of Management and Budget, are considered transportation-related. A new approach has been used to arrive at more accurate USCG transportation-related expenditures. Similar to the previous approach, the current approach includes all expenditures for Environmental Compliance and Restoration, Alteration of Bridges, and Oil Spill Recovery. Part of the expenditures for Operations, Acquisition, Construction and Improvement, Research & Development, and Test and Evaluation are considered as transportation. Within these program areas, only Aids to Navigation, Marine Safety, and Marine Environmental Protection activities are included in the earlier data sets. In the current version, more activities like Search and Rescue and Ice Operations have been included. In addition, Boat Safety Program expenditures have also been included.
Trust fund share of pipeline safety was added to the Research and Special Programs Administration expenditures since FY 1994. This item was not covered in the previously published data.
Federal grants to state and local governments for the Boat Safety Program have been included. These were not included in the previously reported data.
Data for federal transit grants are obtained from the Office of Management and Budget public budget database. In the previous data series, they were estimated by deducting direct federal transit expenditures grants from the total federal transit expenditures.
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1 The federal budget is broken down into 20 functional categories, of which one is transportation (function 400). Function 400 is not tied to any one department or agency, but instead aggregates transportation functions wherever in the federal government they occur. Thus, the transportation function may include many activities, such as highway construction and safety, airways and airports, maritime subsidies, U.S. Coast Guard operations, railroads, and mass transit. It also covers grants-in-aid programs to support state and local activities. A good summary of the federal budget process can be found in Stanley E. Collender, The Guide to the Federal Budget, Fiscal Year 1996 (Washington, DC: Urban Institute Press. 1995).
3 Funds in the Conrail Labor Protection Program were provided for benefits to Conrail employees deprived of employment because of work force reductions and other actions. This program no longer exists since Conrail has been returned to the private sector. In 1988, the unobligated balances available from this program were transferred to the USCG, and in 1990 they were returned to the U.S. Treasury.