Colin Foard and Peter Muller: Wildfires are wilting state budgets—but there is a solution

By Colin Foard and Peter Muller

The alarming rise in the size, number and intensity of wildfires in the U.S. is wreaking havoc on more than land, property, wildlife, and human lives: It’s also scorching the budgets of state governments that must pay to fight and recover from these blazes. For example, the five-year average of Washington state’s annual spending on wildfire suppression more than tripled between 2010 and 2019, from $24 million to $83 million. As these expenditures have increased in states, many of them have entered a cycle of underfunding wildfire activities in their annual budgets, only to seek additional emergency money when expenses inevitably outpace what policymakers have allocated. This approach, in turn, redirects both funding and attention from efforts to lower the risk, severity, and costs of wildfires before they start.

The driving force behind this cycle is both obvious and startling: From 2017 to 2021, the average annual acreage burned by wildfire nationwide was 68% greater than the annual average from 1983 to 2016. Climate change is making wildfires bigger and the wildfire season longer, according to the U.S. Global Change Research Program. Additionally, wildfires are becoming more dangerous and expensive as communities in fire-prone areas grow. Today, about 24 million homes are at high risk of fire. And experts warn that wildfires will become more frequent and intense in the coming years.

A new report from The Pew Charitable Trusts–Wildfires: Burning Through State Budgets–looked at fire management in six states and found that these states often underfund wildfire management. As a result, the states are forced to use after-the-fact allocations to pay the cost of fighting wildfires, a funding practice that obscures the true cost of fire suppression. Alaska, for example, bases its appropriation for managing wildfires on the least expensive year of the previous 10, and then relies on supplemental funding to cover any additional costs.

Determining who is responsible – and who will foot the bill – for managing wildfires further complicates the state budget decisions. Where a fire starts matters: Generally, responsibility for suppressing a fire rests with the government entity that owns the land where the fire begins. For example, the federal government, which owns 28% of lands in the U.S., plays a direct role in managing fires that start and burn on these federal-owned properties – primarily through the U.S. Department of the Interior, the U.S. Forest Service, and other land management agencies. States and local governments have similar responsibility over their lands.

However, because fires don’t obey political boundaries, the federal government, states, localities, and other entities have developed hundreds of wildfire cooperative agreements across the country to facilitate and coordinate suppression activities. These agreements are organized through the National Interagency Fire Center (NIFC), the National Wildfire Coordinating Group, and regional partnerships known as Geographic Area Coordination Centers. The intertwined nature of these agreements and the time associated with repayment makes the costs borne by each level of government a challenge to track.

Meanwhile, states are increasingly relying on emergency and supplemental funding mechanisms to make up for initial appropriations that are too small. Although flexible budgeting tools are essential to ensuring that sufficient and timely funding is available for even the most costly fires, Pew’s research found that states are overly reliant on post-fire funding mechanisms such as emergency spending authority and supplemental appropriations. These practices remove from the regular state budget process decisions about the appropriate level of funding for wildfire suppression – an approach that can give a misleading picture of the fiscal impact of fires by hiding their true cost, while also making it more difficult for states to develop long-term investment plans to reduce the cost of fires.

Fortunately, the report found that federal and state investments in cost-saving mitigation activities are growing – and should continue to rise as federal funding from the infrastructure and inflation reduction laws are passed through to states and localities. Those funds are coming from states, too: Responding to growing spending on fire suppression, for example, Washington state plans to allocate $500 million over eight years on efforts that can manage costs long term. This investment includes setting smaller, controlled fires that reduce fuel for larger ones, and making homes, buildings, and other infrastructure less susceptible to fires.

Here’s what states can do to help ensure more transparent accounting of wildfire costs and adequate funding for mitigation:

Evaluate budgeting practices to account for growing risk. By comparing actual versus expected spending and accurately assessing the threat of future fires, state leaders can better estimate how much to budget for wildfire management.

Maximize investments in evidence-based mitigation. Lawmakers should ensure that the immediate need for suppression funding does not divert money from mitigation investments, which can help manage wildfire costs in the long term. Additionally, lawmakers can assess barriers that states and localities face when applying funds to mitigation projects – and make the process of using mitigation funds more manageable for communities.

Better track and share data on wildfire spending. States have surprisingly little data on how much they spend to prevent and fight wildfires, and should take steps to make their wildfire spending data more accessible, transparent, and comprehensive. The same holds true for federal and local agencies. Better data could help improve intergovernmental coordination and provide policymakers with evidence to help determine how to allocate funds for wildfire mitigation.

States today have an opportunity to improve the complex intergovernmental system of wildfire management by modernizing their budgeting practices, reducing costs through investment in mitigation, and increasing the availability of spending data. These are not easy tasks. But careful, accurate, and data-driven budgeting and investment for fire suppression and mitigation is a necessary first step to keep lands, wildlife, property and people safe from the growing threat of wildfires.

Colin Foard is a manager and Peter Muller is an officer with the Pew Charitable Trusts’ fiscal federalism initiative in Washington, D.C.