A Roadmap for Managing Wildfire Costs

The growing threat and cost of wildfires—which continue to make the news, with fires recently ravaging California and Maui—prompted Congress to create the Wildland Fire Mitigation and Management Commission in 2021. In September the commission released a report with scores of recommendations meant to buffer the financial, environmental, and public health fallout associated with these fires.

The report recommended that the federal government better track spending on wildfires across agencies and ensure that wildfire grant programs are more accessible to communities. It also suggested federal-level investment in wildfire mitigation to reduce risks as well as provide incentives for state and local governments to invest in risk-reduction activities. Several of these recommendations were based on The Pew Charitable Trusts’ research on wildfire spending and budgeting.

For example, Pew found that mitigation activities—such as forest management and fire-resistant construction and landscaping—can reduce the severity and costs of fires and that funding of such activities has risen in recent years, but the scale of the problem requires additional investment to reduce future risks. The commission’s report said that as much as $24 billion in funding has been allocated to forest management and wildfire activities through the Inflation Reduction Act and the Infrastructure Investment and Jobs Act, but the U.S. Forest Service and Department of the Interior estimate that they will need more than triple that amount over the next 10 years to effectively address wildfire risk.

Pew’s research also found that federal, state, and local spending on wildfires is not sufficiently tracked and reported, which creates a data gap for policymakers. This spending can be difficult to track because it involves a complex set of activities undertaken by multiple agencies and entities across federal, state, local, and Tribal governments. Pew’s main recommendation would address this at the federal level through a budget “crosscut” for wildfire spending—a standard method of reporting that shows how much federal agencies are spending, broken down by types of activities and geographic allocation.

The 50-member nonpartisan commission is composed of representatives from federal agencies; state, local, and Tribal governments; and experts from the private sector. Its recommendations include a focus on the impact of wildfires on public budgets and, if implemented, would address fiscal challenges previously identified by Pew research.

“Wildfires are becoming a bigger burden on budgets at all levels of government,” says Colin Foard, who manages Pew’s fiscal federalism program. “Understanding their full costs is key to helping build the case for more sustained funding in mitigation, which could reduce risk in the long term.”