A Taxpayer's Guide To Wildfires: Part 1

A Taxpayer's Guide To Wildfires: Part 1


In 1908 a Congressional legislative rider created the Forest Fires Emergency Act that gave the U.S. Forest Service the authority to engage in deficit spending for fire suppression. The USFS could spend unlimited amounts of tax dollars in the heat of battle, fighting fires without any real fiscal constraint. During the “Big Blowup” of 1910 when 3 million acres burned in the northern Rockies, the fledgling agency exercised this authority when it spent over $1.1 million attempting to suppress the fires. Today, $1 million is the average daily cost of a typical large fire suppression incident. Federal agencies now spend over $1 billion annually on firefighting while the number of burned acreage continues to grow.

Up until the 1950s, an average 30 to 40 million acres burned annually in the national forests of the West, but there was no sense of “crisis” during this time—American society had other fiscal problems to confront and other wars to fight. Following World War II, the number of acres burned nationwide plummeted to around 3 million acres per year, and that became the new “normal” to most people. The convergence of prolonged cool, moist climatic conditions, a growing federal workforce ready, willing, and able to serve as a firefighting “militia,” and an aggressive road-building program that enabled convoys of firefighters and heavy equipment to be sent into formerly remote wildlands all helped to keep the number and size of wildfires unnaturally low. The agency had plenty of incentive to aggressively attack all wildfires and put them out as quickly and cheaply as possible in the post-War period because its budget appropriations centered on its commercial logging program, and wildfires were perceived as threats to the timber resource and the agency’s revenue.

Then a sudden shift occurred in the late 1980s beginning with the “Siege of ‘87” in California and Oregon, followed the next year by the massive Yellowstone Fires. These large-scale, long-duration wildfire events marked the beginning of significant changes in the size of individual wildfires, the total number of acres burned, and the costs of fighting fires.1 The 1994 fire season shocked fire management agencies with another huge increase in the costs of firefighting, along with the ultimate cost of 34 firefighters killed in action. A full-blown crisis over the risks, costs, and impacts of wildfire suppression had arrived.

Beginning with the 1995 Federal Wildland Fire Management Policy and Program Review, a number of studies, reports, and policy initiatives were offered to both improve firefighter safety and reduce the rising costs of fire suppression. There have been a multitude of other reports over the last 15 years attempting to understand why the size of wildfires and number of acres burned continues to increase, and above all, trying to figure out why the costs of suppression continue to rise even during years when wildfire activity temporarily declines. Each year of high suppression costs prompts a new series of cost reviews, with new rules and guidelines intended to contain or reduce suppression costs, but most of these reports and recommendations are overlooked, ignored, or forgotten, only to be repeated with each “bad” fire season in a continuing “boom and bust” cycle of Congressional funding.2 Despite spending billions of tax dollars and deploying thousands of firefighters, for the foreseeable future we will see the size and duration of wildfires continue to grow along with the costs and impacts of fire suppression.

This report will review some of the major social and environmental factors causing fire suppression costs to keep rising. Some of the lesser-known and often overlooked explanations such as the “human dimensions” of wildfire management will be highlighted. The paper will conclude with recommendations for changing the ways we manage wildfires, beginning with a paradigm shift in the way we relate to forest fires in general and a strategic shift in the specific ways we plan and prepare for their annual appearance.

Most official reports and analyses of the causes of suppression cost increases can be grouped into three general categories. Part Two will discuss the most popular category of socioenvironmental explanations: 1) excess fuels accumulations from past fire exclusion policies and fire suppression actions; 2) the growth and pattern of housing development in the wildland/urban interface (WUI); and 3) climate change that is causing wildfires to burn larger and fire seasons to last longer.

Part Three discusses another category of explanations that focus on institutional factors related to budgets and financing for wildfire suppression: the “perverse incentives” for wildfire suppression created by the budgetary structure of the Forest Service, giving it a Congressional “blank check” for emergency firefighting, and enabling it to “borrow” funds from other land management programs to fund firefighting. Additionally, there are unequal cost-share agreements between the federal and state governments for firefighting on multi-jurisdictional wildfires. Another perverse incentive flows from the growing use of expensive private contractors to supply crews, equipment, and supplies that is fast turning fire suppression from a public service into a private, for-profit business.

Part Four presents the least discussed set of explanations: the human dimensions of managing wildfires. These human dimensions involve four compounding factors that have huge implications for the size of fires and the costs to manage them. First, unrealistic expectations of the public, politicians, and the newsmedia assume that all wildfires can and should be aggressively fought. Second, the lack of agency accountability diminishes options for limiting suppression spending. Third, risk-adverse managers face no negative consequences for engaging in high-cost suppression actions and also have few positive incentives for choosing alternative “fire use” strategies that could contain costs. Fourth, the operational strategies and tactics selected by fire managers help determine the costs of suppression. This paper will briefly review all of these explanations while emphasizing the issues that rarely enter public or policy debates.

Soaring Suppression Costs are Consuming Agency Budgets

Before investigating some of the specific causes underlying the rising costs of fire suppression, it is worth examining the scope of the problem to understand how firefighting is creating a real fiscal crisis in the Forest Service. Different reports have come up with different dollar amounts, but the overall trend is the same: suppression costs are soaring both in actual dollar amounts and as a portion of the Forest Service’s total budget.

Beginning in the extreme wildfire seasons of the late 1980s, Forest Service suppression costs grew to an average of $300 million per year.3 From 1995 to 1999, costs rose to $500 million annually, then from 2000 onward, they averaged over $1 billion annually. In 2000 suppression costs broke a record by spending $1.3 billion, then this record was broken again in 2002 with $1.6 billion spent. Over $500 million that year was spent on just four wildfires as four states had the largest wildfires in their states’ recent history.4 The 2006 fire season had 20 wildfires that cost a combined $500 million out of another $1.6 billion total spent that year.5 Then the 2007 fire season broke all previous records with a whopping $1.8 billion spent fighting fires.

Firefighting costs are closely but not entirely related to the number of acres burned, and wildfire activity is highly variable both on an annual and regional basis. However, the clear trend is a rapidly increasing cost in fire suppression, even when wildfire activity temporarily declines. In Fiscal Year 1970, fire management expenditures amounted to $61 million but by 1994 they rose to almost $1 billion. Indeed, a total of $11.8 billion were spent on fire-related programs over this 25 year period.6 According to an in-depth analysis by NAPA,7 the average costs of wildfire-related expenditures (includes both suppression and pre-suppression activities) were the following:

YearsAnnual Costs
1970s$420 million
1980s$460 million
1990s$700 million
2000s$1.4 billion

In addition to a rapid growth in total expenditures, firefighting has taken a bigger portion of the Forest Service’s overall budget. For example, in FY1991 fire management activities (the largest component being fire suppression) was a mere 13% of the Forest Service’s total budget, but in FY2009 that had grown to 48%.8 From 1996-2000, the average annual appropriation for fire management programs was $1.2 billion, but from 2001-2007 this grew to $3.1 billion appropriated each year for fire management activities, with over 70% of this amount going to the Forest Service.9 Despite these huge and growing appropriations, firefighting expenses have caused the Forest Service to exceed its budget for suppression nearly every year over the last decade.10 With nearly half of the agency’s budget consumed with firefighting-related activities, this is causing some critics to label the Forest Service as the “Fire Service” in reference to its apparent transition from a land management to a fire management agency.11

While the ecological effect of increasing wildfire activity is subject to debate, there is no question that the economic costs of fighting fires is causing a fiscal crisis in federal land management agencies, particularly the Forest Service. So what are the reasons fueling the escalation of firefighting expenses? The rest of this report reviews the major factors underlying the growing costs of firefighting.

Fighting Large Wildfires Costs the Most Money

One of the most direct reasons for escalating suppression expenditures is that wildfire activity is increasing in terms of the size of individual wildfire incidents and the annual number of total acres burned nationwide.12 Forest Service economists have determined that total suppression expenditures are strongly correlated with total acreage burned; consequently, large annual costs are associated with large wildfire events and long fire seasons.13

The reasons why wildfire acres are going up will be examined in more detail below, but the issue is more complex than the simplistic quantitative statistics of “acres burned” and “suppression costs” can convey. First, the vast majority of both acres burned and dollars spent result from just a few very big fires. From 1980-2002, 98.6% of all fires were successfully contained at less than 300 acres in size, and all of these fires used only 6.2% of total suppression expenditures. However, the remaining 1.4% of the wildfires consumed 93.8% of all suppression dollars!14 This kind of extreme disparity between fire size and suppression costs were found in individual fire seasons, too. For example, in 2006, the 20 biggest wildfires accounted for 11.2% of the nearly 10 million acres that were nationwide, but they cost nearly 30% of the $1.5 billion expended for firefighting by the USFS.15 In 1999 this disparity was even more extreme when the Forest Service spent over 30% of its total appropriated suppression budget on just two lightning- caused wilderness fires in California. In short, it is the largest 2% of all wildfires that are the real budget busters consuming vast amounts of tax dollars in apparent futility as these wildfires grow to great size despite all that is spent on suppression efforts.

This connection between wildfire size and firefighting cost is nothing new—that is one of the prime reasons the Forest Service continues its de facto “10 am policy” of aggressive initial attack on nearly every wildfire. Keeping fires small is the principal way the agency attempts to minimize suppression costs, and total cost is how suppression “efficiency” is defined.16 Yet, this focus on minimizing short-term suppression costs ignores other long-term economic and ecological issues that should be considered. For one thing, acres burned and dollars spent are clear, unambiguous quantitative measures for assessing the economic efficiency of fire management actions, but this measure is flawed because it assumes that each dollar spent or acres “lost” are compensated by dollars and acres “saved” from burning and firefighting outside the given wildfire perimeter. Spending huge amounts of tax dollars attempting to suppress a large wildfire is thus justified by the assumption that if the fire had not been fought, both the wildfire and the economic impact of destroyed resource values would have been even larger. This rationale can lead to a “siege mentality” on large wildfires that consumes more and more money trying to control wildfire in conditions that defy human control.17

This type of thinking simply ignores fire ecology principles and the multiple benefits of burning for many ecosystems. A more ecologically-based assessment might reveal that alternative “fire use” strategies or tactics could gain more of these benefits of burning while avoiding the expenses of “fighting” the fire. If, in fact, overall resource values are actually enhanced by the effects of fire, then this essentially negates the rationale used to justify expensive suppression efforts—there is no “saving” of unburned resource values, only counterproductive “spending” of suppression dollars.

Firefighting is arguably the most expensive kind of management action on a per-acre basis than anything else the agency does (e.g. logging, road-building, etc.), and this is especially true compared to alternative fire management actions such as wildland fire use. For example, the Forest Service determined that over a 20 year period it cost an average $582 per acre for suppression actions, but only $51 per acre for fire use actions.18 But averaging costs per acre obscures the fact that firefighters typically only work on the outermost edges of a wildfire, so if a wildfire gets very big, the proportion of acres where suppression action occur gets smaller compared to the total number of burned acres in the large interior of wildfires where no actions are taken. When suppression acres are averaged across the total area of a wildfire, this causes the cost-per-acre of suppression to go down, especially on large fires.19 This economic effect is used by some of the agency’s defenders who counter that suppression costs are not “spiraling out of control” because the trend for average costs-per-acre is not increasing.20

The reduction in average cost-per-acre, however, is rendered meaningless by the actual increase in costs when managers select a full suppression strategy aiming for complete perimeter control. Whereas a full suppression effort requires managers to keep ordering more crews and equipment as the wildfire perimeter grows, thereby raising total costs, if managers select a fire use strategy, then a relatively small force is capable of monitoring and managing a large blaze without the equivalent need to keep increasing the number of crews and equipment as the fire grows. Thus, large fires offer the potential to manage them relatively inexpensively with an economy of scale if alternatives to total suppression and full perimeter control are employed.21 This brings up one of the issues rarely addressed by the numerous reports over the years that have examined the factors raising suppression costs—the fact that fire management strategies and tactics have the most direct impact on suppression costs—an issue that will be discussed later in this paper.

In sum, at its most simplistic statistical level, the reason suppression costs are rising is that individual wildfire sizes and the total number of burned acres are rising. The question now must be asked, why are wildfires and acres burned growing despite billions of tax dollars and thousands of firefighters used to fight them? The three most common explanations for the current trend in larger wildfires and higher suppression costs are: 1) excessive fuel loads resulting from past fire suppression actions and fire exclusion policies; 2) the continuing expansion of new housing development adjacent to fire-prone public lands, called the wildland/urban interface (WUI); and 3) prolonged droughts, increased storm activity (e.g. lightning, high winds), and more frequent severe fire weather episodes (e.g higher temperatures, lower humidities) caused by ongoing climate change.22 Although these three socioenvironmental factors are interconnected, it is worth examining each of these phenomena individually to understand their specific effects on wildfire suppression costs.

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