Cost of fighting fires eating away at Forest Service's budget
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Just before dawn last week, a red ball of fire streaked across Northwestern skies and exploded midair. The spectacular meteor sent residents in several states running for their phones to report possible forest fires.

Although the land is still blanketed in snow with temperatures below freezing, Westerners are conditioned to expect fire. And by July, their expectations will be met as forest fires roar through their states. Some hoped President Bush's new budget would provide answers to this growing problem, but as usual, little has changed for the Forest Service.

Once again, the majority of the funding will go to wildland fire management and emergency fire suppression. Until budgets effectively address the causes of the fire problem - fuels accumulations and the ever-expanding wildland-urban interface - catastrophic wildfires will continue to ravage both forestlands and nearby communities.

In recent years, the Forest Service's budget for wildland fire management has averaged $1.5 billion a year. But each year, the Forest Service spends all of that budgeted money and then borrows from other programs, like research and restoration, to cover additional firefighting expenses.

After fire season, Congress relies on "emergency supplements" to reimburse the agency about $500 million annually. In effect, there is no budget for fire management; the more money the Forest Service spends, the larger the reimbursement.

For comparison, consider a private timber company that owns forestland and harvests timber. In the event of a wildfire, the company will divert funds to protect its timber.

The losses from fire and the diversion of funds from other valued activities directly impact the bottom line, even if insurance covers some of the losses. The need to preserve profits provides the company with a strong incentive to manage its forests to reduce the risk of damaging wildfires.

The Forest Service is by no means a timber company, and this example is not meant to suggest that it should be managed as one. But, the agency would reap significant benefits if it had incentives to prevent emergency situations.

Budgets should reward managers who address the fire problem before it blows up, rather than reward them when fires burn out of control. For example, in the wildland-urban interface, where wildfire poses great risk to communities, managers should focus on fuels reduction and preparedness.

In more remote areas, managers may choose to allow some wildfires to burn, if they pose no threat to people or property. This approach would have the dual benefit of reducing hazardous fuels accumulations and restoring fire to its historical role in forest ecosystems in these remote areas.

Taking a lesson from private industry, the first step would be to limit federal fire funding to appropriations. Without the cushion of emergency funding, managers will be forced to stay within appropriated budgets.

In addition, cost control would become a higher priority if budgets were strictly followed. Each national forest should be allowed to carry forward any unspent fire funds from one year to the next. Retaining the surplus at the forest level - not the regional or agency level - would encourage management suited to local conditions.

Finally, to prepare for predictable disasters, national forests could have some form of fire insurance, either provided by the government or the private sector. Just like private insurance, each forest would pay a premium from its appropriated budget, and could place claims during years when they face costly catastrophic fires.

Premiums would be adjusted accordingly, so that forests that consistently overspend would pay more toward insurance each year, while forests that stay within their budget would pay less.

The wildland fire problem will not be solved simply by throwing more money at the flames. Instead, new policies should provide incentives for cost control and emergency prevention. With this approach, there is hope that our tax dollars will not go up in smoke.

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* ALISON BERRY is a research fellow at PERC, the Property and Environment Research Center.