Help the Economy: Start a Fire

Help the Economy: Start a Fire

by Jonathan Thompson of The High Country News

Now that wildfire season is (already) upon us, some old-timer will surely start reminiscing about the days when “work fires” were common; when, on hot summer days, locals set forest fires in the hope that they and their buddies would get jobs on the federally-funded fire crews. A few dozen acres of brush gone up in smoke allowed the able-bodied folks in the rural community to get some decent government wages for a week or two. It’s a logical economic exchange. Or at least it was.

In these days of mega-fires that torch not 30 acres, but 300,000, the concept of wildfires as job-creators has lost some of its folksy charm. When Leonard Gregg, a seasonal firefighter, started Arizona’s Rodeo Fire in 2002, it put people to work, sure, but it also burned more than 400 homes and 470,000 acres, and cost taxpayers millions. Suppression efforts for such fires can run $1 million or more per day. Add to that the cost of lost property, and a natural disaster turns into an economic one, too.

Surprisingly, though, even catastrophic fires can have an economic upside. And while a fire will never be profitable for a local community, the old idea of work fires isn’t totally obsolete after all.

Over several days in September 2010, the Fourmile Canyon Fire ripped through the suburban forests outside of Boulder, Colo. It burned a mere 6,181 acres, small by today’s standards, yet the fire was also costly. That’s in part because the flames focused on a section of wildland urban interface that was scattered with homes. According to a study by Headwaters Economics, Boulder County has one of the most heavily developed WUIs in the country, and fighting fires in such areas is far more costly than in undeveloped forests. A 2012 U.S. Forest Service postmortem estimated that $14 million was spent on suppression, management and burned-area restoration. On one especially nasty day, more than $1.5 million was spent in the effort to protect homes. The total bill for fire retardant, alone, was $343,000.

But the biggest expense was from charred homes. Insurers estimated that total losses were more than $200 million, in part because so many homes burned — a total of 168 — but also because they happened to be in one of the nation’s more costly real estate zip codes. Since many of the homes were under-insured (insurance policies were not updated to reflect rising values over the years), the total value of destroyed structures was probably higher. Real estate values and associated property tax revenues took a dive, too. The taxable value of lots where houses had burned dropped 80 percent or more after the fire. Even homes that escaped the flames saw decreases of 30 percent or more in assessed value, which was directly reflected in their respective property tax bills. As a result, the county lost some $800,000 in property tax revenues during 2011 alone, according to estimates by the Boulder County Assessor.

Typically, a fire can also batter the tourist economy. For 36 days in June and July of 2002, smoke billowed out of the hills north of Durango, Colo. as the Missionary Ridge Fire burned 70,000 acres and some 56 homes (insured losses were $18 million). It followed close on the heels of the Hayman Fire, which tore through the foothills of the state’s Front Range, and as word got out that a good portion of the state was aflame, potential visitors stopped coming during the peak of tourist season. In Durango, where tourism makes up nearly one-third of all economic activity, hotel occupancy rates plummeted beginning in mid-June, according to a report from the Federal Reserve Bank of Kansas City, a trend that held all summer. Ridership on the Durango-Silverton narrow gauge train and visitor numbers to Mesa Verde National Park dropped by 33 and 25 percent, respectively. It was one of the worst tourist seasons in the town’s collective memory.

So Durango officials were pleasantly surprised to find, when all the sales tax figures were added up at the end of that devastating year, that the retail economy had weathered the fire relatively well, taking a less than one percent dip from 2001. (Up in Boulder eight years later, the Fourmile Fire’s impact on retail sales was virtually undetectable. In fact, sales tax revenues from September 2010 — the month of the fire — jumped considerably from the year before). Something had apparently offset the devastating losses to the tourism economy. Perhaps it was wildfire-related spending.

A study by the University of Oregon’s Ecosystem Workforce Program backs that hypothesis up, showing that wildfires can, in fact, have a positive impact on various sectors of the local economy.

The study focused on Trinity County, Calif., and the very active 2008 wildfire season. By the time the smoke all cleared, a whopping $156 million had been spent on fighting the fires, with a bulk of it coming from state and federal government. If you’re a federal taxpayer, a figure like that makes you cringe. But viewed from another angle, it’s a sort of government stimulus package. After all, money is flowing into the community from the outside, and is being spent on wages, services and goods. If the locals have the resources to capture some of that cash, it can be a big bonus (if you’ve got an air tanker fleet nearby, you’re golden). Trinity County, it turns out, didn’t have the resources — there are no incorporated towns and not even a stoplight in the entire county — so only 5 percent of the money was dropped locally. Surrounding rural counties fared better, capturing some 23 percent. A sizable chunk of cash was also spent in other parts of the state. Locally, public sector wages and employment shot up, as expected. And in most other sectors wages and employment held steady or increased.

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