Arizona State and Local Government Documents Collection

This document is intended to give an overview of the Federal-Aid Program and its impacts on Arizona. There are four major sections in the report: (1) Overview of the Federal-Aid Program; (2) Arizona Federal funding highlights for the fiscal year; (3) Federal-aid Highway Program Characteristics; and (4) Federal-Aid Highway Program descriptions. The first section gives a general overview of how the Federal-Aid Program is financed, the authorization process and a discussion of the apportionment, allocation and obligation authority processes. The second section deals with Arizona Federal funding highlights the for fiscal year. The last two sections are devoted to characteristics of the core programs, including eligibility, limitations, apportionment formulas and descriptions of the funding categories.

Since 1986, the Arizona Department of Transportation has used a comprehensive regression-based econometric model to estimate Transportation Excise Tax revenues for Maricopa County. These revenues, which flow into the Regional Area Road Fund (RARF), are the major funding source for the Maricopa County Freeway Program. This document contains the official forecast of expected values for the Maricopa County Transportation Excise Tax as developed by the Arizona Department of Transportation in cooperation with the Maricopa Association of Governments, Valley Metro and Valley Metro Rail.

The Maricopa County Transportation Excise Tax, often referred to as the “1/2 cent sales tax” is levied upon business activities in Maricopa County, including retail sales, contracting, utilities, rental of real and personal property, restaurant and bar receipts, and other activities. Transportation excise tax revenues are deposited in the Maricopa County Regional Area Road Fund (RARF) which is administered by the Arizona Department of Transportation. These revenues were the principal source of funding for the Regional Freeway System in Maricopa County and were dedicated by statute to the purchase of right-of-way, design and construction of new freeways, widening of existing freeways and highways, improvements to the arterial street system, regional bus service and high capacity transit services such as light rail.

The State of Arizona taxes motor fuels and collects a variety of fees relating to the registration and operation of motor vehicles in the state. These collections include gasoline and use fuel taxes, motor carrier fees, vehicle license taxes, motor vehicle registration fees, and other miscellaneous fees. These revenues are deposited in the Arizona Highway User Revenue Fund and are then distributed to the cities, towns and counties of the State and to the State Highway Fund, which is administered by the Department. These taxes and fees represent a source of revenues available to the state for highway related expenses.

The State of Arizona taxes motor fuels and collects fees relating to the registration and operation of motor vehicles. These taxes and fees include gasoline and use fuel taxes, motor carrier fees, motor vehicle registration fees, vehicle license taxes, and other miscellaneous fees. Revenues are deposited in the Arizona Highway User Revenue Fund and are then distributed to the cities, towns and counties and to the State Highway Fund. These taxes and fees are a major source of revenue to the state for highway construction, improvements, and other related expenditures.

Marketing research in consumer packaged goods shows that consumers’ brand choices, category choices, and purchase volumes are all affected by different factors and in different ways by pricepromotions
and advertising. Research also suggests that brand-loyalty, purchase rates, and inventory behavior are important determinants of category choice. These findings are likely to be true of apples as well.

The Fuji apple variety is relatively new in the U.S. As a new product, questions concern the relative impact of consumer learning by experience, by variety-specific promotion, or by generic apple promotion. A two-stage (LES/LAIDS) model incorporating both types of promotion is used to estimate the effect of generic and variety specific promotion, as well as consumer experience, on the demand for Fuji apples. Estimates show each to have a positive impact, and also show new or specialty apple varieties to be relatively price inelastic, but income elastic. Grower returns to promotion are calculated with an equilibrium displacement model of price changes and producer surplus. Changes in producer surplus provide a base-scenario benefit:cost ratio of 14.73.

A structural latent variable model of apple variety demand is used to analyze the effect of variety specific newspaper advertisement characteristics on variety attraction (preferences), and in turn on variety demand. The influence of advertisement size, the use of color and the Washington apple logo were analyzed. The estimated variety attraction variable is important in explaining demand. Model specifications which exclude this variable tend to understate demand elasticities. Advertisement size has a positive impact on Granny Smith, Fuji, and Gala sales. Red Delicious sales are positively influenced by color ads, but negatively affected by ads with the Washington apple logo.

Proposals for reform of the federal multiple-peril crop insurance program for specialty crops seek to change fees for catastrophic insurance from a nominal fifty-dollar per contract registration fee to an actuarially sound premium. Growers argue that this would cause a significant reduction in participation rates, thus impeding the program’s goals of eventually obviating the need for ad hoc disaster payments and worsening the actuarial soundness of the program. The key policy issue is, therefore, empirical one - whether the demand for specialty crop insurance is elastic or inelastic. Previous studies of this issue using either grower or county-level field crop data typically treat the participation problem as either a discrete insure / don’t insure decision or aggregate these decisions to a continuous participation rate problem. However, a grower’s problem is more realistically cast as one of simultaneously making a coverage level / insurance participation decision. Because the issue at hand considers a significant price increase for only one coverage level (50%), differentiating between these decisions is necessary both from an analytical and econometric standpoint. To model this decision, the paper develops a two-stage estimation procedure based on Lee’s multinomial logit-OLS selection framework. This method is applied to a county-level panel data set consisting of eleven years of the eleven largest grape-growing counties in California. Results show that growers choose among coverage levels based upon expected net premiums and the variance of these returns, as well as the first two moments of expected market returns. At the participation-level, the mean and variance of indemnities are also important, as are several variables measuring the extent of self-insurance, such as farm size, enterprise diversity, or farm income. The results also show that the elasticity of 50% coverage insurance is elastic, suggesting that premium increases may indeed worsen the actuarial soundness of the program. These increases will also cause a significant adjustment of growers among coverage levels.