According to STB, the deflator factor is used by the railroads to “adjust their gross annual operating revenues for classification purposes.” This indexing method, STB says, “ensures that railroads are classified based on real business expansion and not on the effects of inflation.”
“Classification is important because it determines the extent to which individual railroads must comply with the Board’s reporting requirements,” according to STB.
STB’s annual deflator factor is based on the annual average of the Producer Price Index (PPI) industry data for line-haul railroads developed by the Bureau of Labor Statistics (BLS) and is used to deflate revenues for comparison with established revenue thresholds.
Application of the annual deflector factors for 2019-2023 results in the following annual revenue thresholds:
